Boom in ethanol increases demand for rail service
Posted: Thursday, June 01, 2006
DES MOINES, Iowa (AP) -- The boom in the state's ethanol industry is spurring an increase in demand for rail service to ship the fuel across the country.
The state is expected to produce 1.3 billion gallons of ethanol this year. Union Pacific and Burlington Northern Santa Fe have seen shipments soar and they, along with other rail companies, are hustling to keep pace.
Jim Glawe, controller for the Corn LP ethanol plant in Goldfield, said fuel produced at the north-central Iowa plant is being shipped to gas stations across the country, from California to Virginia.
Glawe said shipping ethanol by rail is less expensive than by truck.
"You can ship some by truck, but the freight economics of it mean that St. Louis is about as far as you want to go," he said.
It's simply less expensive to transport ethanol over longer distances by railroad, Glawe said.
At Pine Lake Corn Processors, in Steamboat Rock, the lower cost of shipping ethanol by rail has allowed the company to create its own short-line railroad.
The line will connect to both the Canadian National Railway in Ackley and the Union Pacific in Marshalltown.
Pine Lake now transports its ethanol by track to Ackley, where it is transferred to railroad tank cars.
The state currently has 25 ethanol plants, making it the country's largest ethanol producer.
The Iowa Department of Transportation has been providing financial assistance to help new ethanol plants build rail spurs to provide connections to railroad lines.
Five ethanol plants have received a total of $485,000 in state grants. Two others have received state loans totaling $650,000.
"Rail is a very integral part of the delivery of ethanol currently to the East and West coasts, and potentially down to Texas ..." said Larry Mesenbrink, IDOT rail development manager.
Officials with Union Pacific and BNSF said they are working to accommodate the ethanol industry.
Union Pacific is helping to speed the flow of ethanol by investing in track projects near several Midwest ethanol plants, said Mark Davis, a Union Pacific spokesman.
"I can tell you that ethanol is an ever-increasing commodity group for us," said Mark Davis, a Union Pacific spokesman.
On the Net:
Iowa Renewable Fuels Association: http://www.iowarfa.org/
Union Pacific Railroad: http://www.up.com/
Burlington Northern Santa Fe: http://www.bnsf.com/
The state is expected to produce 1.3 billion gallons of ethanol this year. Union Pacific and Burlington Northern Santa Fe have seen shipments soar and they, along with other rail companies, are hustling to keep pace.
Jim Glawe, controller for the Corn LP ethanol plant in Goldfield, said fuel produced at the north-central Iowa plant is being shipped to gas stations across the country, from California to Virginia.
Glawe said shipping ethanol by rail is less expensive than by truck.
"You can ship some by truck, but the freight economics of it mean that St. Louis is about as far as you want to go," he said.
It's simply less expensive to transport ethanol over longer distances by railroad, Glawe said.
At Pine Lake Corn Processors, in Steamboat Rock, the lower cost of shipping ethanol by rail has allowed the company to create its own short-line railroad.
The line will connect to both the Canadian National Railway in Ackley and the Union Pacific in Marshalltown.
Pine Lake now transports its ethanol by track to Ackley, where it is transferred to railroad tank cars.
The state currently has 25 ethanol plants, making it the country's largest ethanol producer.
The Iowa Department of Transportation has been providing financial assistance to help new ethanol plants build rail spurs to provide connections to railroad lines.
Five ethanol plants have received a total of $485,000 in state grants. Two others have received state loans totaling $650,000.
"Rail is a very integral part of the delivery of ethanol currently to the East and West coasts, and potentially down to Texas ..." said Larry Mesenbrink, IDOT rail development manager.
Officials with Union Pacific and BNSF said they are working to accommodate the ethanol industry.
Union Pacific is helping to speed the flow of ethanol by investing in track projects near several Midwest ethanol plants, said Mark Davis, a Union Pacific spokesman.
"I can tell you that ethanol is an ever-increasing commodity group for us," said Mark Davis, a Union Pacific spokesman.
On the Net:
Iowa Renewable Fuels Association: http://www.iowarfa.org/
Union Pacific Railroad: http://www.up.com/
Burlington Northern Santa Fe: http://www.bnsf.com/
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