Joint Finance blocks Doyle ethanol measure

Madison, Wis. - Throughout the opening sessions of the 2006 Fuel Ethanol Workshop & Expo, which is being held in Milwaukee, speakers criticized the State Senate for rejecting a proposed ethanol mandate earlier this year. Now, the Joint Committee on Finance has given them one more reason to be disappointed.

The committee's majority Republicans took no action on an ethanol incentive proposed by Governor Jim Doyle. The proposal would have provided grants to encourage Wisconsin gas stations to install more E-85 pumps and make available to consumers a fuel that is 85 percent ethanol.

Doyle has made development of the state's ethanol industry a central part of his Biofuels Initiative, and Rod Nilsestuen, his secretary of Agriculture, Trade, and Consumer, Protection, expressed disappointment that lawmakers seemed disinterested in advancing a growing industry.

The state now has five ethanol plants that are expected to produce a combined 300 million gallons of the blended fuel this year, with two more plants set to open by year's end. In a keynote address at the Fuel Ethanol Workshop, Nilsestuen called the earlier Senate vote a "bump in the road," and had a similar reaction to the committee's objections.

"It's another action that impedes the growth of renewables in Wisconsin," he said. The committee stalled action to provide $335,000 to fund projects under the Promoting Our Wisconsin Energy Resources (POWER) Initiative announced by Doyle in March. The projects would promote the use of E-85 fuel by increasing the number of E-85 fueling stations and increasing the use of E-85 in local government vehicle fleets. Grants totaling $175,000 would have been distributed to local gas stations.

Doyle ridiculed the Republican's assessment that the money eventually would go to big oil companies. He said no gas stations in Wisconsin are owned by one of the six leading oil companies, and virtually all gas stations in the state are independently owned. Far from helping Big Oil, he said legislative inaction helps the oil industry by reinforcing its monopoly over Wisconsin consumers.

"We have an opportunity to allow our farmers, our environment, and our economy to benefit from greater use of ethanol in our state, but Republicans missed it," Doyle said.

WTN attempted to contact several Republican committee members, but they could not be reached for comment. The committee is comprised of eight members of the State Senate (six Republicans and two Democrats) and eight members of the State Assembly (six Republicans and two Democrats).

Supplying demand

During the same month Doyle announced his POWER Initiative, the state Senate voted 17 to 15 to table legislation that would require all regular unleaded gas to contain 10 percent ethanol. Among the objections cited by critics was that ethanol should stand on its own and not be forced upon consumers.

There are ample signs, however, of a growing consumer interest in alternative fuels. Three years ago, Nilsestuen said the state couldn't get gas stations to install ethanol pumps, but now more than 200 are ready to install ethanol gas equipment, including those situated along Interstate highways.

He called bio-fuel development the next great chapter in U.S. economic history. "It's moving," he said. "It's a hot market."

And it's getting hotter. With worldwide demand driving the cost of gasoline to $3 per gallon, the signing of a national energy bill that encourages ethanol use, and successful IPOs for ethanol producers like VeraSun, the industry has moved well beyond the fringe stage. Nationally, there are 101 ethanol plants with a combined five billion gallons of capacity, and ground has been broken on 22 more.

And like every other industry, technology is helping the ethanol industry evolve. At the Fuel Ethanol Workshop, opinion varied as to how long it would take to develop next-generation cellulosic ethanol - five years is the standard guess - but nobody doubted that it can be made in large enough volumes to seriously challenge gasoline in the marketplace. Unlike corn-based ethanol, the feedstock most commonly used, cellulosic ethanol will be made with a variety of organic matter.

While there still are doubters who think recent investor interest is creating a "bubble" that could burst if gas prices subside, industry insiders are brimming with confidence. "China's demand for energy is growing rapidly," noted Bob Dinneen, president and CEO of the Renewable Fuels Association. "Those fundamentals are not going to change, and I think most analysts understand that."

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