DCCA, IDOA and USDA Rural Development to Fund Ethanol Production Study

SPRINGFIELD -- Governor George H. Ryan today announced that the Department of Commerce and Community Affairs (DCCA), the Illinois Department of Agriculture (IDOA) and the U.S. Department of Agriculture Rural Development are funding a study to evaluate the potential for additional ethanol production capacity in Illinois.

The study will develop information to encourage and guide public and private investment in building new ethanol plants. It also will serve as a resource for organizations and farm groups who are considering such development.

"With the expectation that demand for ethanol will increase significantly in the near future, there is a tremendous opportunity for Illinois' ethanol industry. This study will help our state evaluate what steps we need to take to maintain our position as the leader in ethanol production," Governor Ryan said.

The Illinois Corn Growers Association will conduct the study using state and federal funds totaling $80,000. DCCA is contributing $16,000 from the Illinois Biomass Energy Program and the Illinois Department of Agriculture is awarding $8,000 from the AgriFirst Program. Last month, DCCA received a $56,000 grant from the USDA Rural Development to fund this study.

The study will review the current ethanol industry, project future ethanol demand through 2012, evaluate corn and other feedstock resources, and analyze Illinois' infrastructure, transportation, utilities and labor market needed to support additional ethanol production. The study also will compare the tax and incentive structure in Illinois with those in bordering states, and identify banks and financial institutions interested in backing new ethanol production facilities and farmer cooperatives.

"The study will aid current and future ethanol producers to select sites, develop business plans and obtain financing to build or expand production facilities in Illinois," said Illinois Department of Commerce and Community Affairs Director Pam McDonough. "It also will assist policy makers to compare potential ethanol production capacity in Illinois to other states."

State and national energy policies emphasize using renewable fuels such as ethanol. During the next decade, the ethanol market nationwide is expected to grow to about five billion gallons annually from 1.8 billion. Illinois currently leads the nation in ethanol production.

"Choosing Illinois for this study demonstrates a federal recognition of the importance of Illinois ethanol to the nation and the state's commitment to expanding ethanol production," said Illinois Department of Agriculture Director Joe Hampton. "This study will help us determine whether current programs and policies are adequate to meet future production demands."

"Increasing ethanol production is a tremendous economic opportunity for rural Illinoisans," said Doug Wilson, Illinois State Director for USDA Rural Development. "Developing renewable energy sources improves our quality of life and is a great example of value-added agriculture."