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Posted on  

February 26, 2003

Demand for ethanol grows

Associated Press

SIOUX FALLS, S.D. AP) - A new ethanol plant that opened last week at Chancellor and several others under construction, show South Dakota is benefiting from increased demand for the corn-based fuel, industry officials say.

"The market for ethanol has been growing around the country," said Trevor Guthmiller, executive director of the American Coalition for Ethanol, based in Sioux Falls.

In states such as California, where MTBE (methyltertiary-butyl (ether)- is being phased out, ethanol is becoming the replacement of choice, Guthmiller said.

Production since 1999 has increased rapidly as six new ethanol plants have opened in South Dakota, he said.

One of the new plants, Great Plains Ethanol, LLC in Chancellor, received its first bushels of corn last week.

Additional plants are in various stages of construction.

Sioux River Ethanol, LLC announced plans this week for a plant near Hudson. It is expected to produce 45 million gallons of ethanol a year when construction is completed by the summer of 2004.

A groundbreaking has been held by VeraSun Energy of Brookings for a plant about 80 miles north of Brookings. The VeraSun plant will have capacity to produce 100 million gallons a year.

And another plant under construction in Groton will produce another 45 million gallons.

With the Great Plains plant going online, the state has the capacity to produce about 220 million gallons of ethanol.

"In 2003, one out of every three rows of corn will be used for ethanol production in the state," said Lisa Richardson, executive director of the South Dakota Corn Growers' Association.

Before ethanol plants geared up operations in South Dakota, a lot of corn was shipped out of the state, said Richardson.

"We used to export about two-thirds of our corn because we didn't have the market here," she said.

Steve Kary, a spokesman for the Chancellor plant, said increasing demand also means higher prices for farmers.

"It's another market for their product, which will ultimately create higher prices and a better agricultural situation for them," Kary said.

Ethanol-blended gasoline can also save consumers money because it typically costs less than regular unleaded, Guthmiller said.

During December, ethanol-blended gasoline accounted for about 55 percent of the market in South Dakota, he said.



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