News Releases for November 2002
November 22, 2002
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Hoeven Announces Ethanol Initiatives
BISMARCK, N.D. - Governor John Hoeven today unveiled a new four-part initiative designed to enhance production and consumption of ethanol and other renewable fuels in North Dakota. The Governor’s ethanol initiative calls for ethanol-incentive funding of up to $3 million annually for a new ethanol plant built in the state.
“It’s important to increase production of ethanol, and equally important to increase public awareness of its benefits to boost consumption,” Hoeven, said. “Enhanced ethanol production is a win for our farmers and rural areas, and a win for our economy.”
The concept calls first for ethanol production payments based on a formula keyed to the price of corn relative to the price of ethanol. When the price of ethanol is higher relative to the price of corn, and manufacturers are able to realize a profit in the market, they would receive no incentive payment. The incentive would pay up to $3 million dollars a year to help new plants get up and running.
The Dakota Renewable Fuels group, a group of farmer-investors, advanced the formula concept as an effective way to structure a new industry incentive. The same group is currently reviewing the potential for a new 30 million gallon ethanol plant in North Dakota, according to Hoeven. A plant of this size would use about 12 million bushels of corn annually and have a $44.5 million annual economic impact on the state.
“We’re increasing the incentive in an effort to bring additional ethanol production online in North Dakota,” Hoeven said. “We plan to work closely with our Legislature to establish the most effective means to deliver the plan.”
The second leg of the initiative provides up to $500,000 for a statewide renewable-fuels marketing campaign to enhance public awareness and consumption. The plan creates a marketing program to provide retail fueling stations with incentives to promote and advertise ethanol blends and other renewable fuels, such as biodiesel. The goal is to nearly double consumption in the state, from 26 percent currently to 50 percent within five years.
“We have been working closely with the Corn Growers Association and the Retail Petroleum Marketers to create a thoughtful and effective customer-awareness program,” Hoeven said. “Once consumers are aware of the multiple benefits of ethanol, we believe it will create demand for the product.”
The third leg of the plan encourages the availability of E-85 fuel by providing six matching grants of up to $5,000 each for stations willing to help complete a statewide network of E-85 fuel. E-85 is a blended fuel with 85 percent ethanol and 15 percent gasoline. Currently, the state has E-85 retail stations only in Bismarck and Grand Forks; the initiative will help to make the product available statewide.
The fourth part of the plan increases directly the state’s commitment to ethanol consumption. Hoeven is directing the state Department of Transportation (DOT) to include flexible fuel vehicles (FFV) in new purchases for the state fleet. FFVs are able to run on E-85 fuel or gasoline. Last spring, the Governor directed the state DOT to use a blended fuel with 10 percent ethanol in all state vehicles.
Ethanol production adds up to 30 cents to every bushel of corn and produces a nutritious livestock byproduct, according to the U.S. Department of Agriculture. Farmers can benefit not only from higher corn prices, but also from collective enterprises to build ethanol production facilities, according to Hoeven.
“Value-added agriculture and energy are two of our targeted industries for North Dakota,” Hoeven said. “Production of ethanol-based fuel creates new jobs, helps our farmers add substantial value to their crop and contributes to our overall plan to develop all of our state’s energy resources. It’s good for our farmers, good for our environment and good for our economy.”
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