Dave Claborn

November, 2003

It's harvest time.  Soybeans, for the most part, have been harvested.  Next, grain farmers will be trading heads on their combines to bring in the corn crop.  Marion, of course, has a close association with corn already.  We're known, at least by the civic boosters among us, as the "popcorn capital of the world."  We host an annual popcorn festival.  We package billions of packages of microwave popcorn.  Wyandot, Inc. makes millions of pounds of corn chips a year, as well as the world's supply of Cracker Jack.  The Ohio Corn Growers Association is based here.  So, perhaps it's inevitable that we would be talking to another corn-based industry.

Recently, we've had the occasion to entertain two different groups interested in building an ethanol production facility.  Ethanol is, essentially, 200-proof moonshine made undrinkable by the addition of a denaturant like unleaded gasoline.  Used as a fuel, it raises the octane level of gasoline. 

Interest in ethanol is increasing rapidly for several reasons--almost all of them driven by government action.  First are environmental regulations requiring gasoline to be blended with an oxygenated fuel additive so it will burn more efficiently, reducing air pollution.  The petroleum-based oxygenate MTBE (methyl tertiary butyl ether) had been the predominant oxygenate used by the oil companies but is rapidly being banned by most states because it is carcinogenic and has the nasty habit of entering the water table when it is spilled or leaks out of storage tanks.

Ethanol is the only other commercially viable alternative that does not carry the environmental baggage of MTBE.  The energy bill now under consideration in Congress will require ethanol usage to double by 2015 to five billion gallons a year.  Most of that is used on the West Coast or in the Eastern U.S.  However, now, most ethanol is produced in the middle of the country, in the Corn Belt.  There are 73 ethanol plants in the United States, clustered in Minnesota, Iowa, Nebraska, and Illinois.  Ohio, though, has the advantage of being on the eastern edge of the Corn Belt and the western edge of the eastern people belt.  Producing ethanol here reduces transportation costs. 

Marion has several sites that are well suited for production of this product.  The right site needs a unique mix of attributes, including ample water, rail service and natural gas availability.  Marion's Dual Rail Industrial Park is one such site.  There are several others. 

A 50-million gallon per year ethanol plant will cost upwards of $50 million.  It will employ a skilled workforce, but not a very large one.  Thirty-five to fifty jobs would be produced at the plant.  However, it's expected there would be more in local support industries.  The groups looking to build the plants are looking for more than a site.  They are trying to raise the necessary equity to get one of these plants financed.