The ethanol industry is increasing at a rapid rate, bringing in promises of a healthy economy for Iowa.

Lucy Norton, director of marketing for Iowa Corn Growers Association, said ethanol is becoming a big industry in Iowa because corn is the main ingredient. Ethanol is a high-octane renewable fuel additive produced by fermenting plant sugars, she said, and, in the United States, 95 percent of the plants used are corn.

Ethanol has the added bonus of reducing tailpipe emissions, and it is recognized by the Environmental Protection Agency as being clean-burning, Norton said. She said the demand for ethanol has increased since another fuel additive, methyl tertiary-butyl ether, was found to be harmful to the environment.

“The competing additive, MTBE, is being banned, and that’s creating a huge demand and market,” Norton said.

She said auto manufacturers’ warranties cover a 10 percent level of ethanol in fuel, but some fuels are being made with as much as 85 percent ethanol. She said manufacturers like General Motors, Chrysler, and Ford are making flex-fuel vehicles that can accept either percentage, thanks to special sensors.

“The models being offered [with flex-fuel capabilities] are growing. It’s not standard. You have to do a special order,” Norton said.

Dan Otto, professor of agricultural economics, and Paul Gallagher, associate professor for the Center of Agricultural and Rural Development, conducted a study on the amount of ethanol being produced at the request of the Iowa Renewable Fuels Association.

“They were just looking to pull together their data,” Otto said.

New technology and knowledge have increased the speed of construction for ethanol plants, Norton said. It now takes only 12 to 18 months for a plant to start producing, she said.

Otto agreed the new plant construction is very fast.

“A year ago, we did a version [of the study], but some new plants opened, so we updated information,” Otto said.

Norton said even with just the current plants, Iowa is a major producer of ethanol each year.

“In Iowa, we are a big producer of ethanol — about 700 million gallons a year,” Norton said.

Norton said this amount has made it possible for Iowa to become a major exporter.

“Iowa is supplying 23 percent of the national market,” Norton said.

Otto said a benefit of having cooperatively-owned ethanol plants is the money flow.

“A large share of [the plants] are farmer-owned. The farmers sell their corn there. They’re widely dispersed [throughout Iowa], so money is being put back into the rural economy,” Otto said.

Sam Cogdill, an ISU alumnus, is chairman of Amazing Energy, a company that plans to open a plant in Denison that could produce 40 million gallons of ethanol each year. The company is owned by a cooperative of about 385 investors, most of whom are farmers, Cogdill said.

“I’m an ag businessman and a farmer, and I’m into economic development,” Cogdill said.

Cogdill said he doesn’t currently sell any of his corn to ethanol-producing plants because they’re aren’t any nearby. He said once the plant opens in Denison, it’s part of co-op contracts to sell corn to the ethanol plant. Cogdill said this new market gives him the chance to expand his farming operation.

Norton said the increase in ethanol production will also have a positive effect on the Iowa job market through temporary jobs for construction of the plants to permanent jobs for the manufacture of the ethanol.

“We are talking about the creation of 4,200 jobs that are either directly or indirectly related to the ethanol industry,” Norton said.