Ohio Rides The Boom In Ethanol Production

State embraces biofuels for economic development

Cox News Service, Gerry Shih
Published May 27, 2008

WASHINGTON — Whenever money got tight, Roberta Grippon used to tell her nine children to air-dry their clothes or use fewer sheets of toilet paper or pump the hand soap just once, and somehow their working-class Dayton family would make ends meet. Now, with food and fuel prices smashing records and few nonessentials left to cut, Grippon has turned to the East Dayton Food Pantry. "What we make isn't enough to feed everybody," she said. "It's being used to feed the gas tank instead." Consumers pay price But while Ohio families like the Grippons struggle to stretch their grocery budgets, the state is steaming ahead in an area many blame for boosting food prices: corn-based biofuels. This year, domestic ethanol producers are set to consume a third of the corn produced in the United States, which is the world's biggest exporter. The U.S. Department of Agriculture said last week that expected low harvests and ballooning demand from ethanol producers will push corn prices to record highs this year. To date, the United Nations puts ethanol's contribution to food price hikes at 10 percent to 15 percent, while the International Food Policy Research Institute blames 25 percent to 33 percent of the rise in corn prices on biofuels. "It's not negligible," says Michelle Perez, a senior analyst at the Environmental Working Group. "Anybody crying that biofuels has nothing to do with the increase (in food prices) doesn't understand simple economics." Despite these concerns, Ohio is pushing into the burgeoning market. Ohio No. 7 in ethanol Having produced its first drop of ethanol just two years ago, Ohio now ranks seventh in U.S. ethanol production with 500 million gallons a year. More refineries are expected to open in coming months, and state officials are hoping the upturn could lure even more investors. "We have all the pieces here to make this work," said Kimberly Gibson of the Ohio Department of Development. The state government is also enthusiastic, offering job creation tax credits and helping to build rural roads surrounding new plants, which generally add several dozen jobs each.