Illinois Pumps Out More Ethanol

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Trucks come and go from the metallic cluster of pipes, distillation towers and warehouses that rise above the fields here in the state's northwestern corner — arriving with corn and departing with ethanol.

A half-dozen ethanol plants have sprouted in Illinois, most located outside small, rural towns such as Lena. But their sparse numbers and out-of-the-way locations mask the significant role the corn-based gasoline additive plays in agriculture in the state, which is No. 2 behind Iowa in ethanol production.

Backed by unswerving home-state political support and with an extra nudge from high oil prices, ethanol is an Illinois "crop" enjoying solid growth. One of every six rows of corn is now converted to the fuel.

Ethanol is used as an additive that reduces vehicle emissions and improves performance. Although it can be distilled from a variety of plants, corn is among the cheapest and most efficient. Each bushel of corn can be distilled into about 2.8 gallons of alcohol, and the grain residue can be sold as high-quality livestock feed.

Its boosters hope to seed the landscape with a dozen or so more ethanol facilities in the future, emulating neighboring Iowa, where there are 15 plants in operation and another seven under construction.

Critics argue that the ethanol industry is heavily subsidized and survives only through the clout of the farm lobby.

Nationwide, production of the fuel is rising fast because of sky-high oil prices and the decision by several states, including Illinois, to ban a competing gasoline additive called MTBE for health and environmental concerns. Output is expected to reach 4 billion gallons in 2005, up from 3.4 billion gallons last year and 2.8 billion in 2003.

Illinois produced 775 million gallons in 2004, valued at more than $1.2 billion. That was up only 3 percent from a year earlier but totaled 23 percent of U.S. production.

"It's a strong market right now," said Mark Lambert, a spokesman for the Illinois Corn Growers Association. "Illinois is lagging slightly behind the growth in the rest of the Midwest and High Plains. Still, I think most Fortune 500 companies would be happy to see this kind of growth."

The Chicago Board of Trade announced Tuesday that ethanol futures trading would begin next week.

Politicians in Illinois and throughout the Midwest have been uncharacteristically united in their support of ethanol.

"The Illinois congressional delegation doesn't agree on a whole lot, but that's one thing they do agree on — support for ethanol," said Adam Nielsen of the Illinois Farm Bureau.

Two of Illinois' newer plants, Lincolnland Agri-Energy in Palestine and Adkins Energy in Lena, are farmer-owned cooperatives. But the real power remains Archer Daniels Midland Co., the Decatur-based agribusiness giant that produces a third of all U.S. ethanol and has two of its seven ethanol plants in the state.

"Ethanol also provides a vital value-added market for corn and other commodities, providing an economic boost to rural America," ADM spokeswoman Karla Miller said.

The price is certainly right for Illinois farmers at the moment, adding an estimated 20 to 40 cents to every bushel of corn, according to ADM.

But ethanol's opponents question the strong support and demand, contending it would not be sustainable without federal tax subsidies that have totaled billions of dollars over the past 25 years and are the reason for cheaper Midwest pump prices. In a 1997 study, Congress' General Accounting Office said ethanol had fallen short of its promises to help the environment and reduce dependence on imported oil.

Nicholas Hollis, president of the Washington-based nonprofit Agribusiness Council, called ethanol "the greatest snake oil of the 21st century" and pointed to a study concluding that it requires more energy to produce than it saves.