Biodiesel, Ethanol May Be State's Future, Economic Development Reps Say
Legislators In 2007 May Consider Ethanol Incentives; Farmers Must Find Right Crops
Last updated Thursday, March 2, 2006 10:44 PM CST in Business
By Lana F. Flowers
The Morning News
Arkansas companies could produce ethanol and biodiesel with the right crops and some economic incentives, according to representatives of the Arkansas Department of Economic Development.
The Arkansas Economic Development Commission met Thursday at John Brown University in Siloam Springs to discuss how to attract more biodiesel and ethanol industries.
Brad Greenway, the department's technology business director, said state companies and the economic development agency can work with technology incubators at state universities.
There may be some bills proposed for the 2007 General Assembly to get ethanol production incentives, Greenway said, but no bill is drafted yet.
The state's paper producers, including Potlatch Corp. in Pine Bluff, could also produce ethanol, Greenway said. Ethanol can be made from plant material containing cellulose, a perfect new niche for paper companies with factories and employees in the state, Greenway said.
Mitch Chandler, economic development department spokesman, said Greenway was hired in February 2005 and earns $74,500 per year.
"This is a start for us. It is a new position to expand jobs in the state and help bring new companies to the state," Chandler said.
He said technology jobs often pay higher wages and require more skills, creating a more stable job base for the state.
Production of ethanol and biodiesel, a fuel made from used fats and vegetable oils, may turn the state's farm economy into a higher tech farm economy, economic development representatives said.
Michael Popp, associate professor in the Department of Agricultural Economics and Agribusiness at the University of Arkansas, said a biodiesel plant in Batesville produces 3 million gallons per year.
"We have another plant that is supposed to open its doors in Stuttgart, Patriot Fuels, with a capacity of 3 million gallons per year," Popp said.
Biodiesel averaged $2.82 per gallon in 2005, Popp said. The U.S. Department of Energy reported traditional diesel prices nationwide ranged from just more than $2 per gallon in March 2005 to more than $3 per gallon in September and October. Traditional diesel prices dropped to approximately $2.50 per gallon in late winter, a price that remains today, according to the Department of Energy.
Popp said there are federal government incentives to help make biodiesel costs and usage competitive with traditional diesel. Using biodiesel will help the United States reduce its dependence on foreign oil and provide another marketplace for soybeans and corn, according to Popp.
There are some hurdles. Larry Walther, director of the economic development department, said farmers must produce the right crop for ethanol or biodiesel.
Walther said there are some fears that newer hybrids or genetically engineered crops could contaminate existing soybean and corn crops.
Popp said switch grass, a tall-growing grass, could be used to produce ethanol.
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jack Russell wrote on Sep 14, 2006 10:27 PM: