The Herald Bulletin

Evening Update

Big Story

November 16, 2013

Special report: Ethanol's growing impact

ALEXANDRIA, Ind. — A trail of white steam floats lazily above the frozen farmland surrounding the ethanol plant in northern Madison County as a line of semitrailers prepare to deposit golden loads of grain at the facility.

The plant, POET Biorefining, 13179 N. 100 East, has made a distinct impression on both the landscape and the community for more than five years. Annually, the plant consumes more than 20 million bushels of corn from local farmers and then turns out an estimated production level of about 65 million gallons of ethanol fuel.

“Everyone in Madison County benefits from ethanol, as does all of the U.S., because ethanol is keeping the cost of gasoline at the pump 50 to 80 cents lower,” said Dave Hudak, general manager of POET. “Ethanol burns cleaner than fossil fuels which makes it better for the environment.”

But a recent investigation by the Associated Press claims the repercussions for ethanol outweighs its benefits.

Special report: Ethanol's growing impact

Federal standards, which started in 2005, require a percentage of renewable fuels such as ethanol to be blended into gasoline and diesel, but government officials are considering a reduction in those mandates. Environmental experts are urging legislators to take a closer look at the impact of ethanol production.

Impact is far-reaching

According to the Indiana Transportation and Agricultural Infrastructure report by the Indiana Soybean Alliance, Madison County produced 11,450,000 bushels of corn compared to 4,402,000 bushels of soybeans and 70,000 bushels of wheat in 2012. Local farmers also purchased more than 8,612 tons of nitrate fertilizer in 2012 to grow their crops, according to the Indiana State Chemist’s office.

Thomas Hertel, a professor and the executive director of the center for Global Trade Analysis for Purdue University’s Department of Agricultural Economics, has been studying the environmental impacts of biofuels since 2008.

He said there was a crucial piece of the ethanol puzzle that had not been initially apparent, but is becoming clear with new research.

In his research, Hertel says, “The environmental impacts of biofuels are far-reaching and not limited to land use change. Some of the environmental impacts may be positive, such as increased wildlife habitat provided by perennial biomass crops, but others, such as increased chemical runoff and soil erosion are not.”

Voices of neighbors

The issue of environmental hazards that could be connected to ethanol production are faced every day by Jasmine Kemp who lives across the road from POET.

“In our opinion, we live across the street from an atomic bomb,” Kemp said. “I hate it.”

Kemp said the highly flammable ethanol, which is both produced and stored on the property, poses a constant threat to her family.

“If it blows up, I would rather not live across the street from it,” she said. “And I would be terrified to test my water.”

Living next to the plant also creates a unique set of nuisances for Kemp who says the value of her property since the company moved in next door makes it impossible for the family to sell and relocate.

“The sound that comes out of there is constant and sounds like a leaf blower,” she said. “It also stinks. It was supposed to smell like baking bread because of the yeast they use in their process. To me, it smells like stale beer.”

Local supporters

Other neighbors, however, welcome the business generated by the plant which employs 43 people.

Jeff Bryan, executive director for the Alexandria Chamber of Commerce, said POET has become an important business.

“They have a very big impact on our community,” he said. “They support the local business, in my eyes, more than I had ever expected.”

By supporting local charities to using small mom and pop businesses for catering events, POET has shown that its owners care about the community, he said.

“It’s just the little stuff they do and they are very supportive of our local economy,” he said. “We are very lucky to have someone like that in the community.”

Although POET is not in the Alexandria city limits, Mayor Jack Woods said the facility is a welcome addition.

“There have not been any issues that we know of and they have been great to work with,” Woods said of POET. “There are two perspectives to consider in all this - who the people are, and what is the product. For us, we are not concerned with the product, we are concerned with the people out there and how they conduct their business - and they do it well.”

One farmer’s view

Local farmers also say they appreciate the business opportunities POET has created.

On average, Mike Shuter, a Frankton farmer, devotes more than half of his corn crop to ethanol production.

“It varies,” Shuter said of his workings with POET. “About 75 percent of my corn is sold there, sometimes more, sometimes less — it just depends on the markets.”

Shuter said POET has had a very positive impact on Madison County by creating a domino effect.

“When the farming community has a profitable year it’s good for the whole community,” he said.

The investigation by the AP is “a bunch of baloney” and reeks of the oil industry’s involvement, Shuter said.

“They are going after the renewable fuel standard,” he said. “The oil industry is trying to kill the ethanol industry.”

The viability of the market

Greg Noble, chief operating officer of the Indiana Corn Marketing Council, said ethanol production creates a viable marketplace for Indiana farmers.

“That is especially important to the rural economy,” he said. “As farmers have increased markets that means they have an opportunity to grow their business and spend their money locally.”

Noble said the AP investigation focuses on land conservation and too many factors must be considered before a determination is made on why there have been changes to farmland. He said lumping various factors together and making conclusions from that information is unfair.

“The farmer will sell to the best market and it could be ethanol, livestock feed, starch or into the export market,” he said. “The price impact will drive where they will go with their corn. It’s not really practical to measure land coming out of so many individual decisions.”

Environmentalists, however, say the market created through federal mandates is artificial.

“Midwestern farmers have responded, as they always have, to policy signals,” said Jesse Kharbanda, executive director of the Hoosier Environmental Council. “And federal requirements on ethanol production have indisputably led to more acreage of Midwestern farmland falling under corn production.”

Kharbanda said that as farmers expand or plant corn on land adjacent to, or near, bodies of water there is a temptation to convert surrounding land or buffer property into corn production. The danger of this conversion is that more water bodies across the state could be exposed to fertilizer run-offs, he said.

“While Indiana has developed a national reputation in the field of cover cropping and conservation tillage, the scale of that effort needs to be even greater, for U.S. Geological Survey research has concluded that fertilizer run-off from Indiana and other corn-intensive states are important contributors to the Gulf of Mexico’s dead zone.” Kharbanda said.

Like Traci L. Moyer on Facebook and follow her @moyyer on Twitter, or call 648-4250.

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