Ethanol plant starts in Kentucky
If it does spread, farmers say the Commonwealth Agri-Energy plant could help reduce air pollution and lessen dependence on foreign oil.
But there are a few challenges. Among them is that states in the southeast don’t require ethanol in gasoline, so little of it is used.
About 30 percent of the nation’s gasoline is blended with ethanol, according to the Renewable Fuels Association, an industry trade group. Ethanol is one of several oxygenators that can be added to gasoline to limit pollutants.
“Raw economics is what’s the story for us in the long haul,” said plant general manager Mick Henderson, who is in charge of trying to make the project work where other small operations in the ’80s and ’90s failed. “If we can’t get a good price” for ethanol, “we can’t make the plant successful either.”
The plant that started operating last week will use 7.5 million bushels of corn per year, about one-third of Western Kentucky’s supply, Henderson said. The farmer cooperative-owned plant also will get corn from northern Tennessee. It can make 20 million gallons of ethanol per year.
Nationwide ethanol production was about 2.8 billion gallons last year. With 15 new plants coming online, ethanol production is expected to grow to 3.6 billion gallons.
There are federal tax incentives for small ethanol producers, such as government grants. The Hopkinsville plant, for example, got a $6 million grant.
The plant is giving some farmers hope that there will be an increased demand for corn, the major ingredient in ethanol.
Randy Riley and his brothers farm close to 5,000 acres near Adams, Tenn., along the Kentucky-Tennessee border. He is a member of the farmer’s cooperative, the Hopkinsville Elevator, making him a partial owner of the ethanol plant.
He doesn’t expect the plant to raise the price he gets for corn because local prices are determined by world markets, but he said having the plant can’t hurt.
“You’ve got to keep the demand up,” Riley said. “That’s the most important thing.”
———
Information from: The Tennessean