SD sen. seeks increased ethanol use

SD sen. seeks increased ethanol use

	Published : Thu, 18 Oct 2007 17:11 By : Agencies Print this Story

SIOUX FALLS, S.D. (AP) - Ethanol prices have plunged, so Sen. John Thune, R-S.D., says he has a meeting scheduled with the director of the president's economic council to stress the need to use more of the corn-based fuel additive.

Thune said it's important for the ethanol industry to increase the percentage of ethanol in gasoline.

'I raised this with the president a few weeks ago in a meeting that we have got to get beyond E-10,' Thune said of the 10 percent ethanol blend.

The industry has been hit by rising corn prices and tumbling ethanol prices as a result of ethanol overproduction and limited capacity to blend the product with gasoline. The price of ethanol has slid by 30 percent in recent months.

Bob Dinneen, president and chief executive of the Renewable Fuels Association, has said ethanol prices are at or near bottom but that an increased renewable fuel standard is likely to be included in a new energy bill in Congress.

Some ethanol plants are shutting down and some existing plants are running at lower volumes, Thune said. 'The market would double if you went from an E10 to an E20 blend,' he said.

Auto makers and oil companies are resisting that, but those issues are inconsequential in light of the goal of reducing U.S. dependance on foreign oil, the South Dakota Republican said.

A bigger percentage of ethanol would 'continue to grow this market for renewable energy,' he said.

'If we don't change the way we do things today, the production that's coming on line, we are going to have more supply than we have demand for, and we can't afford to have that happen to this industry,' said Thune.

Dinneen said last week that ethanol capacity additions are being delayed as a result of an overabundance of ethanol. He also said he believes there soon will be strong demand from new markets and increased blending requirements.

Shares of ethanol-maker VeraSun Corp., based in Brookings, have dropped about than 38 percent since the start of the year.

Early this month VeraSun, one of the nation's largest ethanol producers, announced it was halting construction of a 110 million-gallon-per-year biorefinery in Indiana.

Also, Glacial Lakes Energy of Watertown said it was temporarily suspending construction of a plant in Meckling.

The Renewable Fuels Association says there are 129 ethanol plants, up nearly 50 from 2005.