Ethanol industry called sound

Feb 27, 2009
by DTN

The state of the ethanol industry is decidedly different than it was just months ago, but Renewable Fuels Association President Bob Dinneen told industry representatives last Tuesday at the National Ethanol Convention that despite the tough economic times, he believes the ethanol industry will emerge better for it. His message represents a sharp departure from two years ago at the convention when Dinneen was greeted by thousands of industry representatives excited by the lure of a rapidly expanding and profitable industry.

Back then, Dinneen gave the crowd a rock-star-like delivery of what has become the annual state of the ethanol industry address, pounding the podium, delivering his message boldly.

In 2009, the mood has changed. Ethanol plants are shutting down, companies are filing bankruptcy, and employees are losing jobs. “We are approaching a critical crossroads for our industry,” Dinneen said. “One road leads to 36 billion gallons of ethanol and more production from cellulosic feedstocks, higher level blends, E85, and an incred- ibly brigh bright future for etha- nol as a low-carbon fuel source. An Another road takes us through division and fail- ure.” Despite Despit the economic struggles in the industry, Dinneen said the industry has to fin find a way to come together.

“The road we choose is up to us. Winston Churchill once said, ‘If you’re going to go through hell, keep going.’

I know it feels like hell right now. Believe me, I feel the heat, too,” he said, wiping the sweat from his forehead. “But But I m I’m going to keep going because I kno know the state of the ethanol in industry, while divided and angst-ridden and challenged challeng today, is fundamentall fundamentally sound. And I know that iif we stick to- gether, do ou our work, and stay focused oon the future, our bbest ddays are still ahead.”

Though ethanol’s national impression is of an industry in turmoil, Dinneen disagrees: “I look at what we’re up against and see an industry with perseverance and determination to succeed.” Despite the reported hard times in the industry, he said that in many respects, 2008 was a good year overall. Though the national economy started its down turn and commodity price volatility hurt many ethanol producers, Dinneen pointed out that the industry sold a record 9 billion gallons of ethanol in 2008. And while the nation’s economy was “careening toward recession,” he said the ethanol industry grew by about 34 percent, opening 31 new plants and expanding total production capacity to more than 13 billion gallons.

Today, Dinneen said, the ethanol industry continues to grow, with 21 plants under construction, including the world’s first commercialscale cellulosic ethanol plant.

Last year, he said, the U.S. ethanol industry added 240,000 jobs to bring the total number of jobs in the industry to about 500,000.

Dinneen said that while the manufacturing sector in general is operating at about 70 percent capacity as a result of the recession, ethanol is still operating at around 85 percent of capacity. Despite the economic hardships of the day, he said the ethanol industry continues to “make a difference in people’s lives and is revitalizing rural America.”

In 2008, Dinneen said, the industry contributed about $65 billion to the nation’s gross domestic product, added about $20 billion to household income, and displaced the need for some 321 million barrels of oil. Dinneen added that the use of 9 billion gallons of ethanol in 2008 reduced carbon dioxide equivalent greenhouse gas emissions by about 14 million tons—or the equivalent of removing 2.1 million cars from the road. “These stats do not reflect an industry in crisis,” he said. “These stats reflect an industry that is facing these very challenging economic times with a resolute commitment to addressing the economic, environmental, energy and national security crises facing the world today.” — DTN