A Call to Action

Although the ethanol industry is currently facing numerous challenges in both public perception and economics, speakers at this year's International Fuel Ethanol Workshop and Expo encouraged attendees to take action - address the challenges head on and look to the future of the industry and the potential benefits of cellulosic ethanol.
By Hope Deutscher and Erin Voegele | July 08, 2009
The 25th annual International Fuel Ethanol Workshop and Expo was held June 14-18 at the Colorado Convention Center in Denver. For the first time in its history, the event was co-located with the Advanced Biofuels Workshop and International Distillers Grains Conference. Together, the three events featured more than 200 speakers representing all aspects of the ethanol and advanced biofuels industries. More than 300 businesses and organizations participated in the 2009 FEW Expo, which attracted approximately 2,100 attendees.

BBI International CEO Mike Bryan opened the FEW by addressing the negative press that has plagued the ethanol industry in the past year. Noting that ethanol has been characterized as a "hoax" and "scam" by major news organizations, Bryan acknowledged the past year has been a difficult one. Although the economy has played a role in the industry's recent challenges, Bryan said that public perception has played a role as well.

"I believe the current economic conditions are really only a bit player in the woes of the ethanol industry over the past year," Bryan said. "I think that much of it had to do not as much with the economy, but far more with the image that ethanol has." In fact, Bryan said the root of the problem was - and still is - ethanol's image, and the way that image has been affected by the debates over food versus fuel, land use, starving people, high food prices and the marginalization of women in third world countries.

"For those of you who are in the business, you know that we couldn't get plants financed a year before the economy took a dive," Bryan continued. "It had nothing to do with the economy being bad. It had everything to do with the image this industry had within the financial institutions. Bankers, lenders, equity people lost faith in this industry. They lost faith that they would get their money back if they invested in the ethanol industry. All of those things led to an equity freeze, and a freeze in the construction of new plants."

Although some have said the industry was building too fast, Bryan dismissed the notion that a slowdown is positive. "Tell that to the hundreds of communities out there who desperately need new business," he said. Contrary to what many believe, Bryan said the market for ethanol is not saturated. "We have a 150 billion gallon a year gasoline market," he said. "I don't think we have reached market saturation with ethanol. We can build hundreds of more plants, and we ought to be doing that, and we ought to be doing that now."

The thing that has been holding the industry back, Bryan said, is that those in the ethanol industry have lost control of the message. Outsiders have been allowed to set the research and political agendas for the ethanol industry. "It's time we take back control of our image," Bryan said. "We can no longer let others outside of our industry set our agenda, set our message, set our political objectives, set our research objectives. We need to take back control of our industry once and for all."

The way to accomplish this, Bryan said, is for those in the ethanol industry to take action, educate themselves, and be prepared to address false information. "We need to stop being reactionary, and we need to start being proactive," he said. "When you do that, you are going to empower yourself, you are going to empower your community and you are, in fact, going to empower the industry."

In his keynote address, Growth Energy co-chairman Gen. Wesley Clark echoed Bryan's call to action. "You are the frontline soldiers in this fight, and you've got to take that fight back in your local communities," he said.

Clark encouraged attendees to remember the vital role they play in America's national security. "Let's be honest," he said. "This is not really just about business. This is really about national security. That's why I'm here. I'm a national security guy."

"From every aspect, what [the ethanol industry] is doing is about national security," Clark continued. "I know you are here [at the FEW] for business, and we want you to make a profit, but I don't think there is any industry in America in which the good sense of making a profit is any more closely related to the good work of national security than this industry of ethanol."

Clark spoke about the national security implications of being dependent on foreign sources of energy. "If you have a vital resource that is coming from abroad - and you can't run your economy without it - then it becomes vital to your national security interests to protect access to it," he said. Alluding to conflicts in the Middle East, Clark stressed that
America's motivation is not just an abstract dispute over political philosophy. "This is about America's need for imported oil," he said. "The difference between the Middle East and Africa is very simple. Where is the oil?"

According to Clark, the need for foreign sources of energy distorts national foreign policy actions. Every dollar we spend on ethanol stays in the U.S., Clark said. "It's not going to the Middle East - to Iraq or Saudi Arabia - or some other country that may or may not share America's real interest," he continued. "It gives us flexibility to have the kind of foreign policy that we want; based on good judgment, good values and what's in the long-term interest of America."

Clark also spoke of the national security implications of climate change. Change in rainfall patterns, the melting of glacial ice, rising sea levels, crop failures and the outward spread of pests and disease from tropical areas all contribute to dislocation of the world's population. "Dislocation economically, dislocation socially, and dislocation politically means conflict," he said. "And conflict means national security."

The ethanol industry has the ability to take the nation into the 21st century the nation forward into the 21st century, Clark said. "But, to do it, we are going to have to take this fight to the public and we are going to show them how good this industry is - how good you are and how important we are to the future of the United States of America. That's the mission - that's where we are going - and we need you."

"This audience is the heart and soul of the ethanol industry," echoed Bob Dinneen, president and CEO of the Renewable Fuels Association. "You are the people that make it happen. You run the plants, supply the services, and provide the technology that is driving this industry to new heights, even in the face of unprecedented challenges."

Despite the deepening economic downturn last year, Dinneen said the U.S. ethanol industry grew by 34 percent - opened 31 plants, added 240,000 jobs and produced more ethanol than ever before. "As the world and nation look at regulating carbon - through taxes, cap and trade or assigning a greenhouse gas profile to biofuels in the renewable fuel standard - Dinneen said the industry will need to ensure that "the bureaucrats get it right - that they recognize the carbon benefits of biofuels like ethanol and do not unfairly and with no scientific foundation penalize biofuels for the carbon footprint of other industries or other countries."

Ethanol producers must work with scientists and environmentalists to answer the question of ethanol's carbon footprint, he said. "We can't legislate the criticism away, and we can't ignore it," he said. "We need to answer the critics with sound science and facts. And the facts are on our side. Our carbon footprint is improving with every new plant and each new technology. [The oil companies'] carbon footprint is getting worse with every gallon of tar sands and every new deepwater well they dig. For that reason, carbon regulation need not be something to fear. It should be something to embrace. I suggest that every plant manager and every employee that cares about this industry should be thinking about ways to reduce their plant's carbon footprint."

While the industry may have troubles, Dinneen said it also has a great story to tell. "If we stick together, do our work well, and stay focused on the future, our potential is unlimited - in the near-term, the long-term, and as far as our eyes can see and our minds can imagine."

One way the industry is growing is by adding cellulosic ethanol opportunities. Many U.S. ethanol producers are rapidly developing technologies that use biomass feedstocks, such as corn cobs, switchgrass or municipal solid waste.

"One of the things I've said many times over the years is that the bridge from energy dependence to independence is not a single span bridge, it's a sectional bridge," ICM Inc. CEO Dave Vander Griend said. "Fuel ethanol from corn is one of those sections and it is not like we are passing the baton from generation one to generation two; there are opportunities for all renewable energies to thrive and work together."

Vander Griend was one of eight industry representatives who participated in an opening session panel to discuss the future research and technology of ethanol production.

Over the past 18 months, Poet LLC CEO Jeff Broin has become a believer that cellulosic ethanol will be a reality. "I invested in it 18 months ago with high risk, but today I'm very confident that it will become a reality and we will see combined ethanol plants, a grain-based facility next to a cellulosic facility, using the waste energy to power both facilities," he said.

However, there is a stumbling block to making cellulosic ethanol a reality, some of the panelists said. Pure and simple - political will and support is needed to further the cellulosic industry, said Neal Briggi, Global Head of Enzymes with Syngenta Biotechnology Inc.

A U.S. energy policy will transform into investment that will move the industry forward, Vander Griend added. "If there is not a long-term policy, there's not going to be a long-term industry," he said.

In the short term, Broin said the industry and government need to address the blend wall, increasing the percentage of ethanol in gasoline and creating a flexible fuel mandate to encourage the use of more flexible fuel vehicles. "We can all talk about the future 10 years down the road but if we don't get our politics in order and our public relations in order, I don't think the future looks too bright," he said.

However, Troy Hobbs, corn biofuels strategist at Monsanto Co. disagrees. "I think if the political will is there, if we've got any business climate at all, things will take shape but we need to advance that political will and move it to the next level," he said.

Wes Bolsen, chief marketing officer and government affairs director for Coskata Inc., said political will is good for the country but the cellulosic industry is currently hampered by economics. "The biggest thing is the production costs," he said. "When we can sell ethanol cheaper than a gallon of gasoline, even on a Btu basis, people will demand that product. We don't need government involvement because we have a superior product." EP

Hope Deutscher and Erin Voegele are Ethanol Producer Magazine associate editors. Reach Deutscher at hdeutscher@bbiinternational.com or (701) 373-8046. Reach Voegele at evoegele@bbiinternational.com or (701) 373-8040.