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Producers outside corn states look to ethanol as a possibility
Producers outside corn states look to ethanol as a possibility

BILLINGS - Walt Siewert would love to get better prices for his wheat and barley. Ethanol, he says, may be one way to do that.

"This may be the way to go and help the farmer in the meantime," the Huntley-area grower says.

High fuel prices and concerns with the gasoline additive MTBE continue stirring interest in ethanol, an additive most often made from Midwest corn.

But interest is growing outside of traditional corn states, and researchers and supporters say there is substantial production potential in the West, where wheat, barley, potato waste and even cheese whey can be used to make ethanol.

But uncertainty surrounding a potentially huge California market may be making it difficult for plant organizers to get financial backing or to ensure long-term viability, some industry officials say.

"Financing would be easier once this uncertainty is out of the marketplace," said Monte Shaw, spokesman for the Washington, D.C.-based Renewable Fuels Association.

California and other states have moved to phase out the natural gas-based MTBE, which is criticized for contaminating some water supplies.

But California has asked the federal government to let it opt out of an oxygenate requirement for gasoline once the ban is in place. It remains unclear when a final decision will be made.

Still, organizers continue working on a number of proposals and plans in the Northwest that could help meet local, state and regional needs for ethanol.

"It's going to take one plant to … be successful for this really to get going," said Bill Wells, who is helping develop a plant near Clatskanie, Ore.

"We're hoping the demand for ethanol will keep growing and growing," added David Uchic, a spokesman for the National Corn Growers Association. "We don't see why there wouldn't be demand, whether from corn or barley or what have you."

More than 1.6 billion gallons of ethanol were produced last year in this country. Most of it came from corn.

"People have to think outside of the box. They have to think of (ethanol) beyond it being a corn product," said Shirley Ball, executive director of Montana's Ethanol Producers and Consumers.

Near Conrad, north of Great Falls, Henry McGonigle said there originally was some skepticism surrounding plans for a plant using wheat and barley to make ethanol. But that has changed to excitement, said McGonigle, managing director of The HTM Group, LLC, which is developing the site.

Organizers hope to have the ethanol plant running by late next year.

The plant planned near Clatskanie, Ore., hopes to ship in raw materials from the edge of the Corn Belt, the Upper Great Plains and Montana, and to sell products regionally.

Wells said the business plan is sound and an analysis of it showed that even in a worst-case scenario, the facility should make money.

Shaw, of the Renewable Fuels Association, said he believes what happens in California will be a huge factor. If the state is not allowed to opt out of the oxygenated fuel requirement, it could lead to dozens of new plants across the West, he said.

Demand in California alone eventually could reach 1 billion gallons or more, he said.

Ball, of Montana's Ethanol Producers and Consumers, said if that happened, "I don't think we would have to muscle our way in. … I think we'd be welcomed."

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