Fuel from farm: Indiana's bold biofuel goal: one billion gallons of ethanol and biodiesel annually.

• Author: Hromadka, Erik
• Position: AGRIBUSINESS

THERE'S MORE TO DO with corn in Indiana ... and soybeans too. In fact, those Hoosier staples of agribusiness are on the leading edge of the state's rising profile as a leader in biofuel production.

As oil prices have risen to record levels and political uncertainties threaten the availability of foreign supplies, the United States has turned to its heartland to seek fuel from its farms. And Indiana has answered that call with one of the most aggressive biofuel initiatives in the country.

Last month Gov Mitch Daniels announced that Louis Dreyfus Agriculture Industries plans to build the world's largest biodiesel plant near Claypool in northeastern Indiana. The new facility, two other biodiesel and six ethanol plants are currently under construction in the state, joining an existing ethanol plant in South Bend and creating a new industry that may reshape Indiana agribusiness.

"It's been a hectic year of dramatic progress in renewable fuels development in our state," Daniels said in announcing the new biodiesel plant at the second National Agriculture/Forestry Renewable Energy Summit in Washington, D.C. "In just one year, we're growing from one alternative fuels plant to nine, with more to come. We said our ag sector would be a big part of our economic comeback, and here's the proof."

Daniels was one of only two governors to speak at the summit and he is charting an aggressive course for Indiana's biofuels. Recent federal legislation requires the blending of 7.5 billion gallons of ethanol and biodiesel into motor fuel by 2012 and the nation is currently estimated to have only half the production capacity to meet that amount.

It makes sense that Indiana is stepping up to the plate. The state is the fourth-largest producer of soybeans and the fifth-largest produce of corn in the country. Soybeans planted on 5.5 million acres of land in Indiana produce more than 200 million bushels annually while another 5.6 million acres produce some 780 million bushels of corn.

Using the new biofuel facilities under construction, Indiana plans to shift part of those two crops from the food supply to the energy supply, creating 400 million gallons of ethanol and 95 million gallons of biodiesel each year. According to the governor's office, Indiana's goal is to produce a combined 1 billion gallons of ethanol and biodiesel annually.

Lt. Gov. Becky Skillman, who also serves as the secretary of agriculture and rural development, says the new emphasis on biofuels is...