Bringing together small towns
Dozens of ethanol plants have sprung up in small farm communities throughout the Midwest. And those plants have provided jobs and economic growth.
Consider Cambridge, in south-central Nebraska, where on a cold December day a steady stream of semis hauling corn drove onto large weight scales outside an ethanol plant. Earlier this year there was no line of trucks. The plant sat desolate after the locally owned company that built it just last year went belly up.
The abrupt bankruptcy and shutdownput the just under 1,000-person city in a bind.
“We were starting to get nervous about the consequences and what that would mean to the community,” said Mark Harpst, the mayor of Cambridge.
He said to get the original ethanol plant into the community, the city stepped up and built an electric substation to provide power to the plant. When the company shut down, the city lost that revenue stream to make those bond payments. Harpst said Cambridge is still working to pay off the $100,000-a-year bond.
Ethanol at a glance
- The 2007 Renewable Fuels Standards Program requires 12.95 billion gallons of renewable fuel production for 2010, rising to 13.95 billion gallons in 2011.
- Almost half of the gasoline sold in the U.S. contains a low-level blend of ethanol.
- Though the end product is the same, making ethanol from cellulosic feedstocks such as grass, wood or old newspapers includes a challenge not associated with corn. These kinds of materials have to initially be broken down to sugar before being processed into ethanol. The extra expense associated with this part of the process is one of the reasons corn is the primary source of ethanol today.
“We were concerned about the instability of the ethanol industry as a whole and that’s why we set up our bond so we could get it paid off as soon as possible if the industry took a turn for the worst. There’s still some nervousness yet,” Harpst said.
The Cambridge plant, which can produce 44 million gallons of ethanol a year, is now owned by Nebraska Corn Processing.
Area farmer Jan Tenbensel said he and other farmers feel like they’re more a part of the plant's operations under the new ownership.
“They are doing a wonderful job … they are concerned about community, very community-oriented and realize what’s good for the community is good for them,” he said.
But just because a plant is community minded doesn’t mean it will save its nearby town’s economy should the industry fall apart – which some argue could happen if Congress eventually does away or reduces the 45-cents-per-gallon blender’s credit.
Cliff Meuwsenis president of Zeeland Farm Services, the Michigan-based parent company of Nebraska Corn Processing.
“Our company would survive, but that ethanol plant in Cambridge Neb., they probably wouldn’t,” he said, pointing to the Zeeland’s diversity.
Farmer Tenbensel has tracked the plant’s impact on Cambridge.
“Every dollar for the ethanol plant turns over seven times, there’s a lot of jobs people have been able to come back home, work at the plant, side jobs, trucking end of it it’s allowed me to hire two more individuals to truck with the plant and keep grain going in and out,” Tenbensel said.
There are 24 active ethanol plants scattered throughout Nebraska in small towns.
For some of these ethanol-influenced towns, though, the impact is not as profound as it might be in Cambridge.
Blair, for example, is just over 20 miles north of the Omaha metro and has a population around 8,000. There, the large food and ag company Cargill has an expansive campus. Among its diversified industries is an ethanol plant.
Blair Mayor Jim Realph said the big company along with the town’s location shelters the community from ethanol’s ups and downs.
“The location is very important for Blair on the eastern Nebraska, we have river right next to us, abundance of water, we have transportation, we have (the Union Pacific) main line expanding to double track,” Realph said.
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