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Ohio is on the cusp of making its own ethanol from corn.

Seven ethanol plants are under construction statewide, with three expected to open by the first quarter of 2008. Two of those three are within an hour's drive of Dayton:

• Greenville's ethanol plant is a joint venture between Maumee-based The Andersons and Marathon Oil Co.

• AS Alliances Biofuels is building an ethanol plant in Fayette County near Bloomingburg that will receive corn from a Cargill facility next door.

Only a fraction of more than 20 ethanol projects under consideration in Ohio will be built, said Dwayne Siekman of the Ohio Corn Growers Association. While the state conceivably could produce up to 900 million gallons of ethanol, industry watchers predict Ohio's annual ethanol production will top off in about a decade at 660 million gallons, he said. Twelve ethanol facilities that supplied data to the state Department of Development would have a combined capacity of 874 million gallons.

"With the projects proposed, we've gone over that cap," Siekman said.

Higher corn prices have made ethanol plants less profitable. Corn accounts for about 70 percent of an ethanol plant's costs.

Ethanol's proponents say production of the corn-based fuel is sound rural development. The Andersons ethanol plant in Greenville, for example, said it will pay its 45 employees $20.25 an hour when it begins operations in the first quarter of 2008. And farmers within 30 miles of an ethanol plant should receive a premium of 5 cents to 10 cents per bushel of corn, said Matt Roberts, Ohio State University Extension agriculture economist.

Corn: Fuel vs. food

Ethanol now uses 20 percent of the nation's corn crop, nearly doubling corn prices in recent years and driving up feed costs for livestock farmers.

"Our members are obviously very concerned," said Jim Chakeres, executive vice president of the Ohio Poultry Association. Feed is the largest single cost on poultry farms.

Ohio produces more eggs than any state but Iowa, and Mercer and Darke counties are the nation's top egg-producing counties. Ohio also is home to meat chicken and turkey farms.

Each chicken consumes about one bushel of corn a year, Chakeres said. For farms housing 100,000 laying hens, the cost of a feed bill goes up $100,000 in a year if the price of corn increases from $2 to $3 a bushel.

Consumers are paying more for dairy products and meat, and higher corn prices are often cited as a reason for those increases. And at Cargill in Dayton, the price of high-fructose corn syrup — used to make soft drinks and many food products — is up about 20 percent in the past year. Higher corn prices are a "major contributor," Cargill spokesman Bill Brady said.

But higher costs also can reflect higher wages and health-care costs for workers in food processing, the Ohio Corn Growers' Siekman said.

And he said corn growers sold their crop for less than it cost to produce for several years, relying on federal subsidies for their only profit, Siekman said. Now, he said, they're simply selling corn at a fairer price in lieu of billions of dollars in federal subsidies.

"What that means is the consumer would pay more at the supermarket, but less tax money would be going for subsidies," said Ralph Dull, a farmer and environmentalist whose family farm near Brookville is home to the Future Energy Center, the environmental arm of the Dayton Peace Museum.

Ethanol a net plus?

Ethanol's critics note the corn-based fuel alone barely puts a dent in America's so-called "oil addiction," and is too heavily subsidized.

"Ethanol is misleading us," said David Pimentel, a Cornell University professor emeritus. "There's no free lunch, and ethanol is a long way from being that free lunch."

But others say ethanol is taking a bum rap.

"There seems to be a very large effort to discount one energy source without focusing on a solution," Siekman said.

Pimentel acknowledges he's in the minority among academics arguing that ethanol won't help cure the nation's energy ills: "It takes (43 percent) more energy to produce a gallon of ethanol than you get out of it." He claims conventional gasoline is more energy-efficient.

Roberts said Pimentel's research is too pessimistic, and shouldn't include certain input costs. He said ethanol actually nets a small energy gain, not a net loss. More meaningful, he said, is that ethanol releases fewer greenhouse gases than gasoline.

Dull said a looming oil shortage makes the ethanol vs. petroleum argument moot. The United States can't become energy independent without conservation, he said.

"Americans have been spoiled by cheap food and cheap fuel," Dull said. "People don't like to hear that, but that's the way I see it. Conservation has to be a major part of the solution, and we're not there yet."

Contact this reporter at (937) 225-7457 or bsutherly@DaytonDailyNews.com.

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