Delegates OK ethanol subsidy

On The Farm

On The Farm

April 03, 2005|By Ted Shelsby | Ted Shelsby,SUN STAFF

THE RISING price of gasoline and growing concern over the use of a cancer-causing chemical as a gasoline additive could lead to the development of a new industry for Maryland farmers.

The House of Delegates has given unanimous approval to a bill that would subsidize the production of ethanol in the state, a move that takes farmers' dreams of a production plant to produce a gasoline substitute from grain closer to reality.

The legislation would help make a plant more viable by contributing 20 cents a gallon in state funds to the first 15 million gallons of alternative fuel produced from barley, with a maximum of $3 million a year. The subsidy would be similar to those provided by other states to the more than 80 ethanol plants around the country.

Maryland farmers want to build a $70 million plant that would produce 30 million to 40 million gallons of ethanol a year.

The ethanol would serve as a fuel additive accounting for about 10 percent of a gallon of gasoline. It would increase the octane rating of gasoline and could be used as a substitute for methyl tertiary butyl ether, or MTBE, an additive to gasoline sold in Maryland.

MTBE is known to cause cancer in laboratory animals in high doses.

A leak at a gasoline station in the Upper Crossroads section of Harford County last year has been blamed for contaminating the drinking water in wells of nearly 180 homes.

"This could create a whole new industry for state farmers," said Robert Hutchison, a Talbot County grain farmer and a leader in the agriculture community's efforts to build an ethanol plant. "That is why I feel that state participation is justified."

Hutchison listed numerous advantages of ethanol. "It would be a home-grown fuel. It doesn't contaminate wells like MTBE. If you didn't put it in gasoline, you could drink it. It's good for the consumer. At today's gasoline prices, it is very competitive."

Lynne Hoot, executive director of the Maryland Grain Producers Association, said that if the legislation is passed by the Senate and signed by the governor, a plant could be on line in 2007.

Hutchison said it is too soon to say where it would be located. "It needs to be close to our feed stock -- that's barley on the Eastern Shore -- or close to the users, and that would be in Central Maryland."

According to Hoot, 30 percent of the gasoline sold in the United States contains ethanol.

@SUBHEDMissing plan deadline may cost some farmers

Maryland farmers who missed the March 1 date for filing nutrient management plans for their farms face fines of up to $10,000 a day, according to the state Department of Agriculture.

So far, plans have been filed covering only about half the farmland in the state.

The plans, designed to prevent nutrient runoff from fields into the Chesapeake Bay, are a requirement of the Water Quality Improvement Act passed by the General Assembly in 1998.

Runoff from farms was suspected of causing outbreaks of Pfiesteria piscicida in the bay during 1997 that caused fish kills and human illnesses. The Pfiesteria scare resulted in the closure of parts of three rivers, triggered public concern over the safety of state seafood and disrupted tourism.

Louise Lawrence, chief of the Maryland Department of Agriculture's Office of Resource Conservation, said farmers who have not filed plans would be sent warning letters this month. After that, she said the department could levy fines of $250 for a violation, up to $100 a day for continued violation for a maximum of $2,250.

After three violations, Lawrence said, the Agriculture Department could refer farms to the Department of the Environment, which can impose a fine of $10,000 a day.

Farmers with sales of $2,500 a year or more or livestock producers with 8,000 pounds or more of live animal weight must use a nutrient management plan that controls the amounts of nitrogen and phosphorus on their fields.

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