Mr. Ethanol Fights Back

Truth About Trade & Technology
Friday, 07 November 2008
Forbes.com

October 30, 2008 At the Poet ethanol plant in Chancellor, S.D. two things stand out: the sheer scale of the six corn-storage bins--each 90 feet tall, together capable of holding five weeks' worth of corn for the plant--and the nearly overpowering smell, a yeasty aroma, with hints of something slightly rotten. Even Jeffrey Broin, the chief executive of Poet LLC and an old hand when it comes to fermenting corn, comments on the unusual odor. "It's not normally like this. There must have been some wet distillers grain left out," he says.

Stale odors are the least of Broin's challenges these days. Ethanol companies, of which the privately held Poet is the largest, went from being hailed in the media as green energy heroes in 2007 to being widely blamed for the summer surge in global food prices. Critics, including many Republicans, have lambasted U.S. tax subsidies for ethanol blenders as well as federal mandates for ethanol production.

Broin, 43, dismisses the criticism and the tough economic conditions and denies that ethanol is to blame for higher food prices. "Incentives to produce ethanol have cost the government $4 billion [a year] but saved $8 billion in farm aid," says Broin. "There's a tremendous amount of misinformation being put out by people who want to protect the status quo."

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