Investments in ethanol plants are growing across the nation to areas with larger populations, according to a new report, “U.S. Ethanol,” by Rabobank.
Grainnet reports by the first quarter of 2009, more than 200 ethanol plants are expected to be in production, which represents a capacity increase of more than 91 percent during a three-year time frame.
Much of this growth in ethanol production is largely driven by demand created by government support.
In fact, “government support for ethanol production, and increasing demand for ethanol in all states, will continue to foster growth of destination plants,” said Jennifer Cole, Food & Agribusiness Research Associate.
The first ethanol plants – in the Corn Belt – are often referred to as origination plants, whereas plants outside the Corn Belt are often referred to as destination plants.
Investors are finding that the traditional areas for ethanol plants, in the Corn Belt, are becoming saturated, and are looking elsewhere.
“One of the main advantages to building plants outside of the Corn Belt is the ability to ship ethanol shorter distances,” said Cole.
“It is more practical and less costly to transport corn compared to ethanol.”
By moving the final product closer to consumers, investors are able to keep costs in check.
Because ethanol is a highly flammable substance it incurs higher insurance rates than shipping raw corn.
So the focus of investments in ethanol plants has shifted from corn producing states – Iowa, Illinois, Nebraska and Minnesota – to areas such as New York, Texas, Oregon, Arizona and Washington.
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The recent opening of the 
Dallas-based 
Missouri Governor Matt Blunt has joined the ranks of the chosen few who are test driving the Ford Escape Hybrid. Ford has produced just 20 of its hybrid-electric, flex-fuel Escapes that can run on E85 fuel and Ford Manager Tony Reinhart made the presentation to Blunt last week at the Missouri State Fair. Blunt says the specially-equipped Escape will help promote his Missouri Renewable Fuel Standard, which outlines that all fuel sold in the state will have to contain 10% percent ethanol by January of 2008. The Governor pointed out that Missouri is the fourth state to have such a requirement. The hybrid, flex-fuel also meets Blunt’s executive order that requires at least 70% of new vehicles purchased by the state to be flex-fuel vehicles.
Illinois Senator and Democratic presidential hopeful Barack Obama made a stop in Charles City on his five day tour of Iowa last week to help cut the ribbon at the grand opening of the third ethanol plant for 
Other dignitaries at the event included 
The U.S. House’s version of the Farm Bill includes a provision where the federal government buys surplus sugar and sells it to ethanol producers to be used with corn.
The chairman of the House Agriculture Committee, Minnesota Democrat Collin Peterson, inserted the sugar-to-ethanol provision in the farm bill. Minnesota is the nation’s largest producer of sugar beets, and Peterson represents the state’s sugar beet-growing Red River Valley. U.S. sugar is made from beets in some Northern and Western states, and cane in a few Southern states and Hawaii.
The U.S. Senate is expected to take up the bill when it comes back in after the August recess. And this current provision has the endorsement of the chairman of the Senate Ag Committee, Sen. Tom Harkin (D-Iowa):
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