Regional Report Eastern April 2010
In “Up on Cripple Creek,” The Band had another kind of distilled corn in mind — and maybe down the gullet — when it sang of “a drunkard’s dream if I ever did see one.” That might also apply to the Tar Heel ethanol industry’s flight of fancy. The dream hasn’t died, but problems inherent in making it come true have been sobering.
Next month, Clean Burn Fuels LLC will crank up its plant near Raeford, the first in the state to mass-produce ethanol. But North Carolina has a long row to hoe before it lives up to the nickname some ethanol boosters bestowed — “the Saudi Arabia of biomass” — for its potential to produce the gasoline alternative, not only from corn but grass, wood and animal waste.
The Hoke County refinery is designed to produce about 60 million gallons of ethanol a year, just a smidgen of the nation’s 13 billion gallon annual capacity. Most ethanol plants are in the upper Midwest’s corn belt, and North Carolina is no cornucopia: It doesn’t grow enough maize to meet the demands of its cattle and poultry industries. That didn’t daunt those rushing to cash in after a federal law mandated use of renewable fuels in the gasoline supply.
High gas and low corn prices made ethanol profitable for people who got into production early, says Kelly Zering, associate professor of agricultural economics at N.C. State University. The number of plants nationwide zoomed from 81 in early 2005 to 189 in January — most of them in the upper Midwest. Meanwhile in North Carolina, the failures of ethanol speculators sometimes have been literally criminal.
Soon after the Raeford plant began receiving its first corn for testing in February, two investors in an unrelated project in Beaufort County were fined and sentenced to 30 months in prison after pleading guilty to bribing a public official and conspiracy to commit extortion. They had agreed to pay a field officer for the state Department of Environment and Natural Resources about $196,000 to help them get permits.
Other efforts simply petered out. Highly touted projects in Cumberland and Martin counties were abandoned. A proposed plant in Northampton County isn’t dead, but the county’s economic-development director, Greg Brown, says the principals are still arranging financing and evaluating the project.
North Carolina still has appeal, even compared with the big corn-producing states, says Steven Burke, president of the nonprofit, Oxford-based Biofuels Center of North Carolina. Not only does the state have a milder climate but also more variety in fuel stocks. He expects more refineries to follow. He just isn’t sure when or where.