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The right thing: GROWMARK's Kelley says time is right for renewable fuels to gain larger share of market.

There are many reasons why agricultural cooperatives have made a significant commitment to renewable fuels, but they all come down to a central theme: It's the right thing to do. Dan Kelley, chairman of the board and president of Bloomington, Ill.-based GROWMARK Inc., says the cooperative system he serves has nearly 30 years of commitment to the distribution, use and promotion of renewable fuels.

The right thing for U.S. farm industry

"As a farmer, it's imperative to build additional markets for the crops I grow. Our safe and abundant food supply depends upon the continued existence and success of the U.S. farmer," Kelley notes. "Renewable fuels help in this regard. For example, nearly 1 billion bushels of corn will be used for ethanol in 2004. That helps generate farm profitability."

According to the U.S. Department of Agriculture, ethanol production adds 30 cents to the value of a bushel of corn. The Renewable Fuels Association notes that ethanol production adds $4.5 billion to U.S. farm income annually.

Kelley cites three primary reasons GROWMARK is supporting the distribution of renewable fuels:

* It's the right thing to reduce dependence on foreign oil. The U.S. has the products, technology, and distribution systems to make America less dependent on foreign sources of oil, according to Kelley. "What's needed now is a federal energy policy that endorses renewable fuels as not only good for our environment, but as an added measure of homeland security," he adds.

* It's the right thing for the environment. Biodiesel is the only renewable fuel to have fully completed the health effects testing requirements of the Federal Clean Air Act. The use of biodiesel in a conventional diesel engine results in substantial reduction of unburned hydrocarbons, carbon monoxide and particulate matter when compared to emissions from diesel fuel. Ethanol-blended fuel substantially reduces carbon monoxide and volatile organic compound emissions. The corn-based substance is added to gasoline to meet oxygenate level requirements mandated by the 1990 Clean Air Act amendments and to raise octane level.

* It's the right thing for the U.S. economy. In the past 15 years, the ethanol industry has built nearly 75 plants. Plus, there are almost 100 new ethanol projects being discussed all over the United States, according to the National Corn Growers Association. "Investments being

made in ethanol production translate into significant numbers of jobs in largely rural areas," Kelley notes. "This growing industry is literally helping to fuel our economy."

GROWMARK early biofuels proponent

GROWMARK was a pioneer in making ethanol-blended gasoline available to the public in the 1970s. Today, nearly 70 percent of all gasoline the cooperative and its members sell in Illinois, Iowa and Wisconsin contains an ethanol blend. Sales of ethanol-blended gasolines have increased from 4 million to 70 million gallons during the last 10 years.

"FS member cooperatives were the first in Illinois to offer biodiesel statewide, starting in 2002. Today, 40 percent of GROWMARK'S diesel fuel sold throughout the Midwest contains soy-based biodiesel. Plus, it is available in many locations at our gas station operations, in addition to delivery to the farm," Kelley says.

The GROWMARK System's efforts to increase use of renewable fuels come under an umbrella called the "Home Grown Fuels" campaign. The central message is focused on energy independence. The campaign's launch in January 2002 coincided with the coop's push to make soy-based biodiesel available throughout the Midwest.

"With the 'Home Grown Fuels' campaign, we wanted to introduce biodiesel and reemphasize our efforts in the development and testing of ethanol products," says Mike Lockart, GROWMARK marketing manager of alternative fuels.

"With biodiesel, our member cooperatives started hand-mixing and loading the product on trucks like it was done when ethanol was first introduced," Lockart says. "it shows the cooperation and determination of our sales force. Without them, it would not have worked. The logistics will remain challenging until we reach the sales volume that supports delivery and storage of mass quantities of biodiesel. But that will come faster than it did with ethanol, because of the lessons we learned through its introduction."

According to Lockart, who also serves on the National Biodiesel board, biodiesel is one of the most widely accepted renewable fuels in the United States. "You can pick up a paper in Phoenix, Albuquerque or Peoria and see stories about school districts or other companies using the product," he adds

Extensive testing efforts underway

GROWMARK member Evergreen FS Inc., in Bloomington, Ill., recently conducted emissions tests on two of the city's mass transit buses using a 5 percent biodiesel blend. The buses were first tested while using No. 2 diesel fuel. Then, they ran on the biodiesel blend for two months. The Illinois Department of Transportation conducted an opacity test to measure the density of smoke coming from the exhaust of the buses. In one bus, a 10-percent reduction in particulates was found. The other bus had particulates reduced by 5 percent.

GROWMARK also tests and markets E-85, a blend of 85 percent ethanol and 15 percent unleaded gasoline in conjunction with the Illinois Corn Growers Association, Illinois Department of Commerce, National Corn Growers Association, National Ethanol Vehicle Coalition, Governor's Ethanol Coalition, Archer Daniels Midland (ADM), Aventine Renewable Energy Inc., Ford Motor Co., Chrysler Corporation and General Motors.

"We are a major supplier of E-85 in the U.S.," Lockart says. "For 10 years, we've marketed E-85. Recently, the U.S. Postal Service began phasing in E-85-compatible vehicles in locations that have created a sales spark."

The GROWMARK System sells E85 to state and federal fleet operators in 12 states.

Another promising renewable fuel is E-diesel, a blend of 15 percent ethanol, 5 percent additive chemistry and 80 percent diesel fuel. GROWMARK, along with the Illinois Department of Commerce, ADM, Pure Energy, Illinois Corn Growers and the Chicago Transit Authority has tested E-diesel fuel.

"We are trying to demonstrate the viability of an alternative to diesel fuel for the heavy- duty engine fleet," Lockart notes.

Testing to-date has included labora tory engine trials, a commercial trucking fleet, 15 Chicago Transit Authority buses and on-farm machinery trials. The final stage of testing has begun in different geographies in different climates during harvest and tillage operations. GROWMARK is blending and arranging delivery of the fuel to various sites. Emissions will be certified on various sizes of equipment and flammability will be tested. Findings will be submitted for final approval of the fuel, which should take approximately two years to complete.

Challenges of bringing renewable fuels to market

"The benefits of renewable fuels are many, but marketing the products can be a challenge," Lockart adds. "Turning points will be if and when Congress adopts a renewable fuel standard and if tax incentives are offered at the state and federal levels."

He remembers well the late 1970s and the process of gaining public acceptance for ethanol.

"We splash-blended one order at a time until distributors had enough demand to make it economically feasible to store ethanol blends in bulk," Lockart notes. "It wasn't until the early '90s that ethanol was available pre-blended at the rack for mass distribution. Farmer cooperatives like GROWMARK stood in the gap to get ethanol off the ground and to push for it to be in place at the retail pump. Today, a 10 percent blend is standard at gas stations.

Biodiesel is taking a similar, but accelerated path, according to Lockart.

"Developers of biodiesel learned from ethanol's history. They received approval earlier from equipment manufacturers, marketing efforts are better developed and coordinated and distributors are sitting up and taking notice of demand potential," he explains. "Farmers have stepped up to the plate to use biodiesel and that has helped acceptance to grow across the agricultural industry as well as transportation fleets.

"I'm looking forward to seeing how it takes off from here. The time is right. The product is right. And we can rally around biodiesel as an answer to some of the challenges facing our country, our co-ops, and our farmer-members."
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Title Annotation:Special Section: Co-ops and Biofuels
Author:Hastings, Ann
Publication:Rural Cooperatives
Geographic Code:1USA
Date:Jul 1, 2004
Words:1333
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