Economy and Government and Transportation, Distribution & Logistics

Surge in ethanol plants means transit adjustments: Study predicts increasing truck traffic, road issues

June 11, 2007

The road Indiana is traveling to help the nation reduce its dependence on foreign oil could be in for a bumpier ride than even the worst Hoosier highways.

Indiana is at the epicenter of the renewable fuels movement and has provided economic incentives for the construction of a dozen new ethanol plants, four of which should be operating by the end of the year.

Annually, the 380 million bushels of corn that will be used to make more than 1 billion gallons of ethanol by 2009-or 10 percent of the nation's total-translate into huge dollar signs for the state's corn farmers. But it's the delivery of the grain that has Purdue University agriculture professor Frank Dooley particularly concerned.

"As these plants come online, they're going to consume an awful lot of corn, and we'll see a very dramatic increase in truck traffic," he said. "It's going to change the traffic flow. More road usage will lead to more damage."

Dooley concentrates on transportation and logistics and evaluated the impact of the plants in a four-page synopsis titled "The Effect of Ethanol on Grain Transportation and Storage." His research led the Indiana Department of Transportation to accept a proposal from members of Purdue's Agriculture Department to assist the agency on its biofuels report that should be finished in January.

The INDOT study that examines the correlation between the ethanol plants and the state's roadways and railways is similar to another of its probes that looks at the new Honda plant in Greensburg.

"We're trying to look at the bigger impact of transportation on the economy and how it affects businesses locating and remaining in Indiana," said Barry Partridge, INDOT's director of research and development. "As part of that, we want to know what they're looking at in a transportation system."

Solutions to curtail potential problems caused by corn-hauling trucks might not mean more roads but perhaps better ones, Dooley said. Eight inches of asphalt might be necessary instead of 6 inches, for instance. Or they might need to be widened to accommodate the semis.

Indeed, as many as 200 trucks a day could be traveling to and from the plants, most of which operate non-stop, 365 days a year. The increased traffic expected to invade the country landscapes throughout the state will cause disruptions that could have far-reaching implications, Dooley said.

A surge in ethanol production from 100 million gallons a year to 1 billion gallons could reduce outbound rail shipments of corn up to 90,000 rail cars annually.

Given that half of Indiana's corn crop is shipped overseas, the reduction in rail reliance should reduce the industry's transportation costs, said Chris Novak, executive director of the Indiana Corn Growers Association.

"Transportation has been an issue and threat for corn producers regardless of the ethanol development," he said. "That actually is going to be a fairly significant savings from an economic standpoint."

Conversely, the Virginia-based American Trucking Association is concerned the demand for more trucks will further underscore existing capacity constraints and driver shortages.

By any measure, truck traffic will increase, Novak said, given that each acre produces three times the amount of corn than soybeans-150 bushels to 50.

In Indiana, two facilities-one in South Bend and the other in Rensselaer-already are processing corn. Three more plants should be in action by the end of the year. They are near Marion in Grant County, Linden in Montgomery County, and Clymers in Cass County.

Linden's population is about 700. Clymers, southwest of Logansport, is merely a blip on the map. Other proposed plants are in such bucolic locales as Cloverdale in Putnam County, Harrisville in Randolph County, and Montpelier in Blackford County.

"In some of these smaller communities, you've created a pretty big presence that they haven't had to deal with in the past," Dooley said. "That's going to be a challenge for some of these places."

He predicts thousands more trucks carrying corn to ethanol plants will travel state and local roads, creating potential potholes for the communities eager to capitalize on the economic opportunities expected to follow.

Not only will there be more traffic, but the trucks will be traveling farther as well, Dooley said. Corn typically moves from a farm to a grain elevator at a distance of maybe 10 miles. But with the large ethanol plants, the radius likely could expand to 75 miles.

Even so, Partridge at INDOT isn't sounding the alarm bells yet. Local governments should see their tax base increase and, therefore, be able to fund road improvements easier, he reasoned.

"We have a pretty good road system in Indiana," Partridge said. "There will be some truck traffic, but it will be more of a nuisance, perhaps, than a detriment."

The uncertainties surrounding the onslaught of the ethanol plants raise an even greater concern. The high demand for corn could cause Indiana to become a corn-importing state-a scenario Dooley said seems unthinkable given the state's stature as the fifth-largest producer of the crop.

But to the applause of Indiana's corn farmers, the state has pledged incentives worth more than $10 million, not to mention a tax credit of 12.5 cents per gallon of ethanol they produce, to lure new plants. The federal government already provides a 52-cent tax credit for every gallon of pure ethanol that plants refine.

In contrast, smaller volumes of corn and soybeans will be exported by barge from Indiana ports along the Ohio River to terminals on the Gulf of Mexico.

Soybeans are used to make biodiesel, a renewable form of energy fit for diesel engines. Indiana is the fourth-largest producer of soybeans and has four biodiesel plants operating or under construction. They are expected to churn out 100 million gallons annually.

Together, the 12 new ethanol plants and four biodiesel plants are expected to create 620 jobs, $1.5 billion in investment and $29.5 million in income for farmers, according to the state Department of Agriculture. There are a total of 20 ethanol and biodiesel plants planned so far in Indiana.
Source: XMLAr02000.xml
ADVERTISEMENT

Recent Articles by Scott Olson

Comments powered by Disqus