Ethanol joins the race at Indy
Kevin Diaz, Star Tribune Washington Bureau Correspondent
March 3, 2005

WASHINGTON, D.C. -- Indy racers are out to prove that performance can be Earth-friendly at 220 miles per hour.
Backed by a consortium of Midwestern ethanol companies, including Fagen Inc. of Granite Falls, Minn., the Indy Racing League will announce today that its 17-race IndyCar Series, including the Indianapolis 500, will use ethanol-blended fuels next year.
The announcement is fueling excitement among corn growers in Minnesota, where 13 of the nation's 98 ethanol plants are clustered.
"It lends credibility to ethanol as a viable fuel for any use," said Minnesota Agriculture Commissioner Gene Hugoson, a Martin County corn farmer. "One of the things that's always raised about ethanol is that it affects performance," he said. "This is an organization that thrives on top performance, so I think this will help dispel that problem."
Indy officials say their target for the 2006 season is a maximum blend of 10 percent ethanol, the same blend mandated for cars in Minnesota. But starting in 2007, they say, the fuel will be 100 percent fuel-grade ethanol.
The Indy racing decision won't significantly affect ethanol sales as much as it will be a helpful marketing tool.
Hearts racing
From a racing perspective, the industry's not-so-green environmental image could benefit from a connection to ethanol.
Indy officials are promising racing fans that they won't notice the switch to ethanol from methanol, a natural gas-based racing fuel that has been used since the 1960s.
"Our cars won't sound differently, smell differently or run differently," said Phil Casey, the Indy Racing League's senior technical director.
That kind of talk gets hearts racing in the ethanol industry, where advocates have been struggling for retail acceptance in the face of public skepticism over engine fuels derived from corn, sugarcane stalks and other plant matter associated more with vodka and moonshine than internal combustion.
'A coup'
The announcement, planned outside Washington's Union Station near Capitol Hill, underscores the political significance of the move, which could have ripple effects in the national and Minnesota debates over ethanol.
"It's a coup for them," said Frank O'Donnell, president of Clean Air Watch, an environmental group that recently protested the use of leaded fuel in NASCAR racing.
Congress is currently deliberating a nationwide energy bill with controversial ethanol mandates that are unpopular with some legislators from California and the East Coast, as well as with those from the oil- and gas-producing regions of Texas and Oklahoma.
In Minnesota, Gov. Tim Pawlenty has proposed that the state double the required ethanol in gasoline to 20 percent by 2012. The Senate has approved the measure and it is advancing in the House.
Ethanol has been promoted as a clean, renewable, home-grown alternative to imported oil. But critics -- including some environmentalists such as O'Donnell -- argue that its virtues are oversold. They say it causes smog, generates little more energy than it takes to produce, and is not economical without substantial federal and state subsidies.
"They have been trying to make ethanol accepted for 25 years, and frankly they haven't been that successful," said Frank Maisano, an energy industry lobbyist in Washington. "When they have been successful, it's only been when farm state senators have tried to jam it down our throats."
But ethanol proponents hope that the sight of ethanol-branded cars zipping around the Indianapolis Motor Speedway will do more for ethanol's image than tax credits and national production mandates.
"We're talking about expanding the market and educating the public," said Ron Fagen, president and CEO of Fagen Inc., the Minnesota partner in the Indy project. "It's 114 octane. It's great performance."
'Great billboard'
Ethanol remains a small fraction of overall world fuel consumption, but U.S. production, based chiefly on corn, has tripled since 2001.
"The ethanol industry is the fastest-growing energy business in the world," said Fagen, whose company is the largest designer and builder of ethanol plants in the nation. "It's just booming."
Agriculture experts say the ethanol industry has added about 10 cents to the value of an average bushel of corn in the Midwest.
Although ethanol companies have been eager to do a deal with the Indy Racing League, the talks have been ongoing for years.
Fagen, who also sponsors funny cars and dragsters, said he was approached three years ago by Indy racer Paul Dana, who will drive an ethanol-powered demonstration car in this year's season, which begins Sunday at the Homestead-Miami Speedway in Florida.
Apart from Dana's racing prowess, Fagen said he's one of the best salesmen he's ever seen.
As Fagen recalls, "He approached us and said, 'An Indy car would be a great billboard for your industry, and I'm a good driver.' "
Kevin Diaz is at kdiaz@mcclatchydc.com