Today's ethanol industry is unrecognizable from the industry of just five years ago, and will be unrecognizable to the industry of five years from now. Renewable Fuels Association, Industry Outlook 2006

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There are over 114 ethanol biorefineries nationwide with 80 under construction, nearly half of them owned by local farmer co-ops or local investors in cooperatives. At the federal level, the Energy Policy Act of 2005 gives a tremendous boost to the nation's small ethanol producers. The Renewable Fuels Association president, Bob Dinneen, said about this landmark legislation, "This bill is likely the most profound rural economic stimulus package since the New Deal." Not only does the bill include strong biofuels tax provisions that ensures and enhances the production and use of ethanol and biodiesel, but it expands the small producer definition from 30 to 60 million gallons per year.

Ethanol production plants have more than doubled since 2001, with production capacity of more than 5.6 billion gallons annually. Ethanol pumps are being installed in record numbers. Ethanol production will continue its upward surge as consumers continue their demand for competitively-priced alternative fuels and vehicles, and as policy makers respond with incentives that encourage both businesses and consumers.

States with a relatively large number of ethanol plants are generally major producers of corn. Historically, ethanol production has been located in the Midwest corn belt (Illinois, Iowa, Nebraska, Minnesota and Indiana) due to the the low cost of natural gas which has typically fueled the ethanol plants and the close proximity of the plentiful and, until more recently, the inexpensive supply of corn. Recently, with the upsurge in the demand for ethanol, farmers have enjoyed higher prices for their corn crops.

With increasing gasoline and natural gas prices, new legislative incentives, and innovative technologies for producing ethanol, new avenues are opening up for the production of ethanol and additional locations for ethanol biorefineries and ethanol stations are appearing in other parts of the nation, including Texas.

In April 2007, the Environmental Protection Agency (EPA) gave the ethanol fuel industry a boost when it set emissions rules for the ethanol fuel plants equal to those for facilities producing ethanol for consumption. Facilities that use carbohydrate feedstocks in producing ethanol will not be required to count fugitive emissions of regulated pollutants when determining if they meet or exceed their emissions limits. Fugitive emissions are emissions that do not come from process stacks or vents. This change may allow some plants to expand production. The rule also allows new ethanol facilities to emit up to 250 tons of regulated pollutants per year in areas that are not known to be exceeding EPA's air quality standards and that are not in an Ozone Transport Region, a region where ground-level ozone is a pervasive problem.

Texas Ethanol Plants

Ethanol in Texas is a win for everyone - producers have another market for their product, the environment gets a break from pollution and rural communities get a shot in the arm from value added production. Bill Kubecka, Texas Grain Sorghum Association

Locating an ethanol biorefinery or installing an ethanol gas station in a rural area is seen as a major boost to local communities in terms of employment and the tax base. An outstanding example is a recent economic boon that came to the Texas city of Hereford as it welcomed one of the largest ethanol plants in the nation. The $120 million Hereford plant will refine corn and milo into the clean-burning fuel for vehicles and is expected to produce 100 million gallons of ethanol fuel each year from corn and milo. About 500 to 600 workers will be employed during construction of the plant. Once the plant is completed it will employ about 60 people.

Approximately half of the U.S. ethanol biorefineries are farmer-owned cooperatives, with many growing their own crops for the ethanol processing. These co-ops pool resources to raise the equity needed to build an ethanol plant in their regions. Several Texas plants are owned by co-ops. The following are plants announced or under construction in Texas. Industry experts project that by 2008 these plants will be producing 500 million gallons of ethanol per year. Texas corn and sorghum producers and cattle owners will be major contributors to these new markets.

	Levelland/Hockley County Ethanol, LLC Levelland (Panhandle) 40 million gallons/year Feedstock: corn and milo Operational 2008 Levelland/Hockley County Ethanol, LLC is a privately-held company, a group consisting of over 135 local farmers, business owners and individuals. The plant is being constructed on a 223 acre site. This dry mill refinery will have an annual capacity to process approximately 15 million bushels of corn and milo (much of it provided by local farmers) into 40 million gallons of ethanol per year. The facilities have access to the rail line for shipping ethanol to marketers outside the local area. The Levelland plant will add approximately $64 million in capitol value to the tax rolls of Hockley County, South Plains College and Levelland Independent School District. Additionally, the plant will distribute approximately $20 million into the Levelland economy through a flow-down effect. The Levelland plant will begin with 35 jobs with an annual payroll of approximately $2.5 million, and will maintain at least 30 employees for the following 5 years. See photos of the groundbreaking in 2004 and the construction phases.
	White Energy Holdings Hereford (Panhandle) 100 million gallons/year Feedstock: corn and milo Operational 2008 The plant will add 38 full-time jobs to the local community and support an additional 650 jobs. Plant construction is anticipated to provide an additional $18 million in spendable income to the local economy. It also will inject more than $100 million into the construction economy the first year alone. Hereford is the "Cattle Capital of the World," providing a built-in market for distillers wet grain (DWG), the primary by-product of the ethanol production process, which is a high-protein feed supplement used by the beef and dairy industries.
	White Energy Holdings Plainview (in the Panhandle, 70 miles from Hereford) 100 million gallons/year Feedstock: corn and milo Operational 2008 The plant will add approximately 70 full-time jobs to the local community. Both the Hereford and Plainview plants share the same rail line and have nearly identical, state-of-the-art designs. And both are strategically located near key markets for ethanol and distillers wet grain.

Additional Resources

An Economic Examination of Potential Ethanol Production in Texas
SECO commissioned this 2003 report by Texas A & M University's Department of Agricultural Economics to provide a broad overview of ethanol production and to evaluate its potential as an economic development strategy for Rural Texas. This abbreviated version of the full report includes the Executive Summary and the Summary and Conclusions, Chapter 5 of the full report.

Ethanol Industry Outlook 2007
A Renewable Fuels Association publication.

Ethanol Industry Scrapbook 2007: Tales from the Heartland
A Renewable Fuels Association publication.

The U.S. Ethanol Industry: Where will it be located in the future?
This is a November 2005 study performed by the Agricultural Issues Center at the University of California.

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