Welcome to the archives for NewsTalk, an IBJ blog published from November 2007 through December 2010.

Showdown for ethanol

April 19, 2010

Ethanol has grown to play a big part in Indiana energy production. The state had only one plant just a few years ago; now there are a dozen and one under construction. Those plants consume the equivalent of one-third of the state’s corn production.

Whether those plants continue humming is an open question. Ethanol has needed subsidies to survive, and those subsidies are up for renewal at the end of the year.

To that end, the ethanol industry has ramped up lobbying through a new trade group, Growth Energy.

Growth Energy is pushing back against another new trade group, the Grocery Manufacturers Association, that’s composed of food companies, environmental groups, livestock producers and oil companies—all of them hit in the pocketbook in one way or another by ethanol.

Growth Energy is worried that public sentiment is swinging against ethanol. Why, the public is beginning to ask, can’t the industry survive on its own after decades of government support?

Ethanol producers counter that their product is relatively clean, doesn’t rely on imports and doesn’t fuel hostile regimes.

Ironically, domestic ethanol producers also are under fire from Brazilian ethanol concerns that want Congress to lower trade barriers.

All of this comes as the domestic industry asks the Environmental Protection Agency to increase the ethanol blend in gasoline to 15 percent from the current 10 percent. The agency is taking additional time to see how more ethanol would affect engines and anticipates making a decision this year.

Expect to see the public relations war continue over television ads and other forums.

How do you feel about ethanol? Should the subsidies be continued?

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