Iowa Public Television


Ethanol Races into the Fast Lane at Iowa Corn 250

posted on June 13, 2008

Record corn prices caused, in part, by this week's floods are curtailing profits for the U.S. ethanol industry and could cause production to decline.

While ethanol producers enjoyed a relatively thin profit margin of about 20 cents per gallon two weeks ago, the surge in corn prices equates to a loss of about 8 cents per gallon. And experts say 2-to-5 billion gallons of ethanol may be put on hold due to high corn prices.

Though once hailed as the silver bullet for America's energy woes, critics now blame ethanol for rising food prices and cast doubt on its performance.

However, one proving ground where the latter of those concerns is being laid to rest is the speedway. High performance engines are put to the test every weekend somewhere across the U.S. -- many relying on tricky mixtures of this or that petroleum distillate.

But one sector of auto racing has committed to "homegrown" fuels in its dash for cash. John Nichols explains how an aggressive marketing campaign is helping ethanol race into the fast lane.

Last summer, a capacity crowd of 35,000 people witnessed the inaugural the inaugural Iowa Corn 250 IndyCar Race. And thanks to a live broadcast on ABC Television, the eyes of the racing world focused on Newton, Iowa

The Iowa Speedway's progressive banking system allowed drivers to run their machines wide open the entire race. And top drivers like Helio Castroneves, Tony Kanaan and 2007 Indy 500 winner Dario Franchitti roared around the track at speeds in excess of 180 miles per hour.

While IRL is new to Iowa, the fuel powering the 650 horsepower cars has grown here for centuries. That's because the 2007 IndyCar Series was the first in auto racing to power its vehicles with 100 percent ethanol.

Tony Kanaan: "In Brazil we've been running the ethanol for years, for 25 years so I would say it's great. I think that this is a better concept, it's cheaper, doesn't harm your engine, it's better for the environment. I mean, it's a win-win situation.

Despite ethanol's ability to make cars go fast, the industry's evolution from value-added commodity to preeminent alternative fuel has taken some time.

U.S. ethanol production grew slowly in the 1980s and '90s. But at the dawn of the new millennium, America entered the age of renewable fuels. Corn is the predominant feedstock of U.S. ethanol, and the Agriculture Department estimates nearly 3.5 billion bushels of last year's crop was used to produce the high-octane fuel.

President Bush: "America is addicted to oil..."

Much of the growth is attributable to policy changes in Washington like the 2005 Energy Bill which created a Renewable Fuels Standard, or RFS. The RFS established a national minimum usage requirement of 4 billion gallons in 2006 and increases the mandate to 7.5 billion gallons in 2012.

Now, just two years after the original RFS became law, proponents believe it wasn't ambitious enough and Congress recently passed a measure increasing the production mandate to 36 billion gallons by 2022.

Demand for ethanol also has grown thanks to aggressive marketing.

Ethanol Commercial

The Ethanol Promotion and Information Council, or EPIC is a nonprofit alliance of industry leaders who work on increasing demand for ethanol through targeted marketing.

According to EPIC, ethanol currently is blended into almost 50% of America's fuel supply, replacing 600,000 barrels of oil every day.

In 2007, America's 110 bio-refineries produced nearly 6.5 billion gallons of ethanol. 75 more facilities are either under construction or expanding to bring annual production to nearly 8 billion gallons.

And while ethanol is growing fast, it's also going fast -- and there's no better example of that than the 17 car sponsored by ethanol and driven last year by Jeff Simmons.

Jeff Simmons: "We've seen a lot of great things in the car this year with out switch to 100% fuel grade ethanol and more torque and broader power band and we're getting better mileage than we were last year as well. So, all those things are great and the crew and the fans in the stands are breathing easier too because it's cleaner burning."

While the 17 car is probably the most eye-catching form of ethanol marketing, promotion of alternative fuels isn't limited to four wheels.

To encourage the use and development of renewable energy, the Iowa Farm Bureau commissioned Orange County Choppers to build America's first custom bike capable of running on 85 percent ethanol. And the stars of "American Chopper," the Teutils, unveiled their flex-fuel creation at the Iowa Corn 250.

Paul Teutil Jr.: "Green huh? You know, this is a cool project and the best thing is that it's the first bike we've built that runs on 85 percent ethanol."

The one-of-a-kind machine was raffled last summer with gross proceeds supporting renewable power initiatives. And the rapid growth of alternative energy is fueling optimism in farm country.

Larry Alliger, Gowrie, Iowa: "The ethanol boom in the state has been good for a couple reasons. I think its, it's been a good opportunity for young people to come get started in farming with either two livestock, or just 'cause there's opportunity to for profit. in the farming part. If there's profit in farming, young people will come back."

By selling their corn to the local ethanol plant and feeding dried distiller's grains to their livestock, the Alligers capitalize on the entire production cycle. And officials claim livestock plays a pivotal role in the future of ethanol.

Craig Lang, President, Iowa Farm Bureau: "The livestock industry is very important for the growth and the overall health of the renewable fuels industry because they use a co-product that is, that is created out of the energy production."

Despite yielding a byproduct containing 80 percent of its original nutritional value for livestock, pure ethanol is the highest-performance fuel on the market, with an octane rating of 113.

And that was enough to power Dario Franchitti to victory lane at last year's Indianapolis 500 and the Iowa Corn Indy 250.

Dario Franchitti: "I've got nothing but positive things to say about ethanol. We put it in the cars, you know, we ran a percentage last year, we went to 100% this year, it's like no problems at all. I think we've gained a little bit of horsepower with it so I think it's great and you've got to plug Indy car series for taking the lead on that and the guys from ethanol for supporting the series. So, it's positive all the way around."

For Market to Market, I'm John Nichols.

Dario Franchitti: "Awesome!"

Tags: agriculture biofuels cars corn ethanol industry Iowa news Newton racing renewable fuels