EthalolinNJ

...The Star-Ledger New Jersey corn farmers want to build ethanol plant $40 million facility would require 11 million bushels each year
12/09/01
BY JEFF DIAMANT STAR-LEDGER STAFF

New Jersey's corn farmers want to build an ethanol plant that would let them sell billions of their yellow kernels to help fuel cars.

The state's 1,500 corn growers, plagued by declining prices, see an opportunity to cash in on the expected increase in demand for corn-based ethanol, a gasoline additive. Farmers think ethanol's demand will rise because the rules governing gasoline oxygenates are changing and because of a national goal to decrease U.S. reliance on foreign oil, especially after the Sept. 11 attacks.

Oxygenates, which help fuel burn cleaner, have been required additives to most gasoline refined since the 1990 Clean Air Act. But the U.S. Environmental Protection Agency wants to phase out the most widely used oxygenate, methyl tertiary butyl ether -- commonly called MTBE -- because of environmental concerns. Ethanol fuel, now used mostly in the Midwest, is considered by many to be an obvious replacement for MTBE.

Garden State Ethanol, a company formed to oversee the New Jersey plant effort, is considering sites in Salem, Gloucester, Burlington and Hunterdon counties that allow for shipping and rail access, said Ed Stahl, the company's coordinator.

The proposed plant, which would be run as a cooperative, would sit on a 20-acre piece of land and cost $40 million. The group expects to need about $10 million up front to acquire financing, Stahl said.

"We hope the agriculture community will be heavily invested in this project," Stahl said. "We also want other, non-(farmer) investors. Most states with successful ethanol industries in them have some form of state support."

Stahl said the plant would be profitable, pay its debt, and hopefully pay a dividend to stockholders. If financing and permits come through, construction could begin at the end of 2002 and would last about a year.

The plant would not subsist on New Jersey corn alone. Garden State Ethanol has consulted farmers in Pennsylvania, Delaware and Maryland because New Jersey farmers don't grow enough corn to feed the envisioned plant.

The group hopes its plant could produce 30 million gallons of pure ethanol a year, enough for 300 million gallons of gasoline, an output that would require 11 million bushels of corn a year. New Jersey's farmers grow about 10 million bushels.

One bushel equals 56 pounds of shucked corn.

It's unclear how many farmers will buy into the cooperative. A group of 10 farmers who first discussed the idea now forms Garden State Ethanol's operating board and is pitching the idea in New Jersey and surrounding states.

"Even if every farmer doesn't participate in the (plant), it'll provide a new corn market for the area," said Steve Jany, a West Windsor farmer and member of the operating board who plants about 1,000 acres of corn each year. "Right now, Purdue (Chicken, in Delaware) buys corn for chicken feed, and there are feed mills in the Lancaster (Pa.) area. They're the major markets now."

A plant would thrust New Jersey into the periphery of a national debate on the value of ethanol-based gasoline.

Advocates say ethanol produces a powerful, environmentally friendly fuel that also helps farmers by increasing demand for corn. Nationwide, 600 million bushels of corn are used for ethanol, raising prices 30 to 35 cents a bushel, according to the National Corn Growers Association.

The Sept. 11 attacks led ethanol supporters to further boost their cause, saying more widespread use could help decrease U.S. reliance on foreign oil. Articles in the New Jersey Farmer newspaper have even referred to ethanol as "patriot fuel.

" But critics have called the ethanol industry -- there are 57 plants nationwide, mostly in the Midwest -- a sham, saying significant federal tax breaks for its production are the only reason the industry survives.

They also say last decade's automobile fuel-burning technology has made ethanol, and other oxygenates, unnecessary. They say politicians support ethanol tax breaks only to win farmers' votes.

New Jersey farmers see little purpose in contributing to the debate. Instead, they're focusing on a new market for their corn.

"What's really important," said Robert Fulper, a farmer in West Amwell, "is what the government has dictated. And they require an oxygenate."

Here's how an ethanol plant works: Machines grind corn and run it through a cooker. Enzymes are added to break down starch, which is converted to sugar. The entire mash enters a fermentation tank, where the sugar ferments into alcohol. The alcohol is put into storage tanks and sold to be used in gasoline.

One part ethanol combines with nine parts oil.

The remaining mash can be sold as animal feed. Carbon dioxide formed from the process also can be sold, often to soda companies.

"You're inputting corn, processing it and coming out with three products: ethanol, carbon dioxide, and dried grains (for feed)," Stahl said. "It's very productive."

© 2001 The Star-Ledger. Used by NJ.com with permission. http://www.nj.com/business/ledger/index.ssf?/business/ledger/153fcb7.html