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East Kansas Agri-Energy

Ethanol Industry

Ethanol is a clean-burning fuel source made from renewable biomass sources such as corn and grain sorghum. Ethanol is sold to petroleum marketers who add it to ordinary unleaded gasoline in order to increase octane, reduce exhaust emissions and meet clean air standards.

When added to ordinary unleaded gasoline, ethanol increases the oxygen content of the fuel-leading to more complete combustion and reduced tailpipe emissions. The major automakers in the world approve the use of E-10 Unleaded (a blend of 10% ethanol and 90% ordinary gasoline). Additionally, thousands of flexible fuel vehicles (FFVs) are on the road that can operate on any blend of ethanol and gasoline up to 85% ethanol-or E85.

U.S. Ethanol Demand
(000 Gallons)

 

Since ethanol is made from renewable resources that we produce here in the United States, it also helps America reduce its reliance on imported oil. Ethanol helps extend gasoline supplies and reduce the amount of oil required to make a gallon of fuel. All of the gasoline sold in Minnesota contains ethanol-and ethanol-blended gasoline is helping cities such as Denver, Phoenix, Las Vegas and Albuquerque meet federal clean air standards. Hawaii and Montana have also adopted policies requiring the use of ethanol in all gasoline sold in those states.

Ethanol production in Kansas

Kansas has been producing ethanol since 1939. There are currently six other ethanol production plants in the state, ranging from 1.5 million gallons to 40 million gallons in annual capacity. EKAE plans to be one of the largest ethanol production facilities in Kansas.

Ethanol Facility Distribution
  1. ESE Alcohol, Leoti, 1.5 MGPY - seed corn
  2. Reeve Agri-Energy, Garden City, 12 MGPY - corn/grain sorghum
  3. U.S. Energy Partners, Russell, 40 MGPY - grain sorghum/wheat starch
  4. Abengoa Bioenergy Corporation, Colwich, 25 MGPY - corn/grain sorghum
  5. MGP Ingredients Inc., Atchison, 9 MGPY - corn/wheat starch
  6. East Kansas Agri-Energy, LLC, Garnett

Ethanol industry growth

The record growth in ethanol demand and production continued in 2004. Demand for fuel ethanol in the United States reached a new high in 2004 of 3.57 billion gallons. A record of 3.41 billion gallons of ethanol was produced in the United States-a 21% increase from 2003 and 109% since 2000.

The new Volumetric Ethanol Excise Tax Credit (VEETC), signed into law in 2004, improves the flexibility for petroleum companies in blending ethanol-and extends the ethanol tax incentive at 5.2ยข per gallon through December 31, 2010.

In August 2005, President George W. Bush signed a comprehensive Energy Bill which includes a Renewable Fuels Standard (RFS). The RFS requires that 7.5 billion gallons of ethanol be included annually in the nation's transportation fuel supply by the year 2012.

Ethanol's chief competitor in the oxygenate market has been MTBE, an ether derived from petroleum. However, MTBE has been found to contaminate groundwater and several states, including Kansas and Missouri, have banned its use. In 2004, California, New York and Connecticut discontinued the use of MTBE in reformulated gasoline (RFG), and ethanol filled the void. As MTBE is phased out, ethanol is perfectly positioned to become the oxygenate of choice to replace it.

For more information on the ethanol industry, visit these sites: