Barley backers see cheaper fuel

On The Farm

On The Farm

April 17, 2005|By Ted Shelsby | Ted Shelsby,SUN STAFF

MARYLAND grain farmers think they have the solution to easing the country's dependence on imported oil and high gasoline prices that are only expected to increase as the summer travel season swings into high gear -- a fill-up of fuel made from home-grown barley.

During the legislative session that ended Monday, the General Assembly passed a bill to create a state subsidy to support the production of ethanol.

Ethanol is an alcohol made from barley or other grains, such as wheat or corn, that serves as a gasoline extender. Gas stations in New York, Connecticut and Minnesota sell fuel that is a blend of 10 percent alcohol and 90 percent gasoline. California requires gasoline sold there to contain 5.7 percent ethanol.

Industry sources say that 30 percent of the gasoline sold in the United States contains ethanol.

The General Assembly's action gives a big boost to the efforts of grain farmers to build an ethanol plant in Maryland. It also offers potential financial benefits to motorists, as well as farmers.

For motorists, it could ease the county's dependence on high-priced oil that last week pushed the average price of a gallon of gasoline sold in the state to $2.25. Across the country, motorists were paying an average of $2.26, according to AAA.

But in Minnesota, where Gov. Tim Pawlenty is pushing to have all gasoline contain 20 percent ethanol, motorists are filling up at an average price of $2.11 a gallon, said Amanda Knittle, a spokeswoman for AAA Mid-Atlantic.

"We have got to look at more alternative fuels in this country," said state Agriculture Secretary Lewis R. Riley, "and if this ethanol plant works out it could be a big boon to the grain industry in Maryland."

There is another potential benefit of ethanol that has captured the fancy of homeowners across the state, particularly those in the Upper Crossroads section of Harford County. It can replace a toxic gasoline additive, methyl tertiary butyl ether, or MTBE.

It is suspected that a leak of MTBE from a gas station is the source of the contamination of well water at nearly 180 homes surrounding Upper Crossroads.

While its risk to humans is uncertain, MTBE is known to cause cancer in laboratory animals in high doses.

"Ethanol can totally eliminate the MTBE problem," said Robert Hutchison, a Talbot County grain farmer and an organizer of farmers who want to build an ethanol plant in the state. "It doesn't make sense to use MTBE when we can make ethanol right here."

Del. Norman H. Conway said the recent increase in the price of oil and the big jump in gasoline prices gave the General Assembly all the incentive it needed to pass the alternative-fuels bill. Conway, an Eastern Shore Democrat, was the lead sponsor of the ethanol bill.

"Our membership realized that they had reached the point and place in the process where it was time to do something to reduce our dependence on imported oil, rather than just think about it," Conway said.

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 ethanol produced from barley, with a maximum payout of $3 million a year.

The subsidy is similar to those provided by other states to the more than 80 ethanol plants operating around the country.

According to Lynne Hoot, executive director of the Maryland Grain Producers Association, the plan is to construct a $70 million plant that would produce up to 40 million gallons of ethanol a year.

The legislation "brings the plant a big step closer to reality," she said, "but there is still a lot of work to be done. We still need to get investors.

"The state is not going to pay a penny until we come up with a group of investors, including farmers, who can put up $60 million to pay for the plant and another $56 million annual expenditure to run it."

Hoot said a plant could be online in 2007. A site has not been chosen.

The plant would produce ethanol from a new variety of hull-less barley. It would be the first plant of its type in the nation.

Hoot said the barley could be planted after the corn is harvested, grown through the winter and harvested the next summer in time for a second planting of soybeans.

Riley said the ethanol plant "would create an additional market for barley, and anytime you have an additional market it benefits farmers. The price is usually higher.

"There could be a real economic benefit to farmers," Riley said, "along with a big benefit to the environment." He said that the barley draws nitrogen and other nutrients from the soil reducing the chance of runoff from fields polluting the Chesapeake Bay and other waterways.

"There can be a lot of benefits of having an ethanol plant here," he said.

The legislation also authorizes a state payment of up to $1 million a year to subsidize a second plant that would make diesel fuel from such things as soybeans, animal fat or restaurant waste.

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