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Thursday, November 01, 2007

Environment. - BioTown, USA. Remember little Reynolds, Indiana? Population 500

The most recent ILB entry on BioTown USA is dated Oct. 6, 2005 -- two years ago. It quoted from a story headed "Questions linger over BioTown project".

Today the WSJ bring us up to date in a story on page B-1 ($$$) headlined "An Ethanol Glut Hits Home In BioTown, USA." It begins:

Two years ago, Indiana Governor Mitch Daniels came to the small farm town of Reynolds in northwestern Indiana corn country to christen it BioTown, USA. The goal: to attract bioenergy companies and set an example by fueling the town's cars, homes and businesses with cheap, environmentally friendly energy.

"This is America's first BioTown in the making," Gov. Daniels declared in front of about 300 people at Reynolds's fairgrounds. But like dozens of U.S. farm towns counting on bioenergy to revitalize their economies, Reynolds is now learning a tough lesson about the difficulties alternative fuels face. Last month, VeraSun Energy Corp. announced it was stopping construction on an ethanol plant nearby.

Two related stories of interest from the Journal:

An Oct. 1 story that begins:

Ethanol's frenzied growth over the past year is coming to a halt -- at least for now.

The price of ethanol has fallen by 30% over the past few months as a glut of the corn-based fuel looms, while the price of ethanol's primary component, corn, had risen. That is squeezing ethanol companies' profits and pushing some ethanol plants to the brink of bankruptcy.

An Oct. 17 column titled "Ethanol's Water Shortage" that echos concerns the ILB has posted recently. Some quotes:
If the Senate's new "renewable fuels" mandate becomes law, get ready for a giant slurping sound as Midwest water supplies are siphoned off to slake Big Ethanol. * * *

Ethanol plants consume roughly four gallons of water to produce each gallon of fuel, but that's only a fraction of ethanol's total water habit. Cornell ecology professor David Pimentel says that when you count the water needed to grow the corn, one gallon of ethanol requires a staggering 1,700 gallons of H2O. Backers of the Senate bill say that less-thirsty technologies are just around the corner, which is what we've been hearing for years.

Some corn-producing regions are already scrapping over dwindling supply. The Journal's Joe Barrett recently reported that Kansas is threatening to sue neighboring Nebraska for consuming more than its share of the Republican River. The Grand Forks Herald reports local opposition to a proposed ethanol plant in Erskine, Minnesota, with anti-refinery yard signs sprouting up and residents concerned about well water. Backers of a proposed plant in Jamestown, North Dakota, recently withdrew their application when it became clear that the plant's million-gallon-a-day appetite would drain too much from a local aquifer. In Wisconsin, new ethanol plants are encountering opposition in Sparta and Milton.

"There are going to be conflicts," says Iowa State hydrogeologist Bill Simpkins, "and there are going to be lawsuits." Even in Iowa, which enjoys abundant rainfall, there are no guarantees that supply can meet the new demand. "The problem is we don't know enough about some of these areas to say whether people can pump out a lot more water," Mr. Simpkins says.

Posted by Marcia Oddi on November 1, 2007 06:56 PM
Posted to Environment | Indiana Government | Indiana economic development