Oil Spill Could Help Ethanol Industry

Mason City, IA- Crews are working desperately to try and contain the massive oil leak in the Gulf of Mexico.

Thursday they attempted to cap and funnel the spill to ships waiting on the surface.

British petroleum is in charge of the clean-up. They lowered a contraption to the sea floor hoping to cover the gushing oil. An estimated 210,000 gallons are leaking into the gulf every day.

The disaster is wreaking havoc on people who rely on the gulf for business, but the ethanol industry is hoping the spill makes people more aware of the lowered risk and cost of producing renewable fuels in the US.

I talked to Golden Grain Energy President and CEO Walt Wendland about the leak in the gulf, and what affect it might have on the future of renewable fuels.

It's only natural for drivers to see the massive amount of oil filling the gulf and think it might cause gas prices to go up. Mary Hamil has other worries.

"I'm more concerned that they get it cleaned up because I'm concerned about the animals the fish, the turtles, all nature getting affected by it," she said.

She is also worried about her vacation plans on the gulf coast next week.

"I can't change my tickets you know, so if it does you know maybe we'll just have to stay at the pool instead of going down to the gulf but you never know we'll see," said Hamil.

AAA says the spill shouldn't affect gas prices in the short term, but it is dealing a big hit to the seafood industry.

Walter Wendland is using the spill as an example.

"American agriculture and ethanol production in the U-S has become far more efficient and less costly than oil, and oil production in the US has become far costlier and riskier proposition," he said.

Wendland says accidents involving ethanol have a smaller environmental impact.

"You'll never see an ethanol slick in the ocean."

He and other industry leaders hope the disaster will help them in their fight to get extra ethanol into a gallon of gas in the US. More than 40 organizations are opposing their effort.

"One of those was the coastal association, and to think, would they say that today, would they oppose us today knowing what's eminent to the coastline?" asked Wendland.

Right now the federal government limits the required blend to ten percent. Wendland would like to see a requirement of double that amount like in Brazil.

"I've always said if we're serious about reducing our dependence on foreign oil we're not going to do it with 10 percent ethanol," said Wendland.

And if the spill has a long term affect on oil prices, he says the cost at the pump will also benefit ethanol.

"Ehtanol right now is about half the price of gasoline after the blender's credit."

AAA says there could be some long term affects on oil prices if tankers are diverted in the gulf.

Gas prices are at an 18 month high now, but analysts say prices usually rise this time of the year anyway.

Members of the petroleum industry are worried the disaster in the gulf could hurt their chances of expanded off-shore drilling in the future.

source: kmit