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Ethanol business downturn only temporary, industry leader says

Agriculture.com Staff 02/24/2009 @ 2:46pm

The troubled ethanol industry's current woes are a reflection of the general economic crisis and not an indication of more troubles for the business in the future, the head of a large ethanol industry organization said Tuesday at the National Ethanol Conference in San Antonio, Texas.

Bob Dinneen, president and CEO of the Renewable Fuels Association (RFA), said in his remarks at the meeting that the industry, though hampered by what's happening on a national and global economic scale, is ultimately on solid footing.

"I see an industry with 171 plants in operation and 21 more under construction. To me, that's an industry in ascension," Dinneen said Tuesday. "And while I also see the 23 that are currently idled and know that more may well follow, I firmly believe that is a temporary misfortune that will be corrected when the economy turns around and the market rebounds. It will."

Dinneen sees the ethanol industry continuing what he says is an "evolution" in the coming years -- both in terms of production efficiency and altogether new feedstocks, namely cellulose.

"With new technologies like low-heat fermentation and fractionization, we are becoming even more efficient while increasing the value of our co-products. I defy anyone to show me an industry that is making this kind of investment in its future in this economic climate," he continued. "I am also a proud witness to the emergence of a dynamic cellulosic ethanol industry that promises to revolutionize our motor transportation fuel system more quickly than most currently appreciate."

Dinneen also pointed to the economic and environmental benefits of ethanol (the latter comprising a 14-million-ton reduction in atmospheric carbon) and lauded the policies in place that further both. Speaking of the current Renewable Fuels Standard, which will mandate between 11 and 15 billion gallons of renewables into the fuel complex in the next three years, he said "That foundation provides our industry with an unequivocal and growing demand base that will always provide a ray of hope in a sea of despair."

The troubled ethanol industry's current woes are a reflection of the general economic crisis and not an indication of more troubles for the business in the future, the head of a large ethanol industry organization said Tuesday at the National Ethanol Conference in San Antonio, Texas.

Other examples of the industry's positive economic impact, Dinneen added, are the tax credits and incentives for ethanol consumers and contributions to rural household incomes, which he said totaled $20 billion in 2008. The industry also added $65 billion to the GDP in '08, he adds.

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