MEDINA, OHIO Beer will fuel state's first ethanol maker

Ohio is the second-largest ethanol user, even though it doesn't make any.
MEDINA, Ohio (AP) -- A company plans to use stale beer and soda to become the state's first producer of the alternative fuel ethanol.
The clean-burning fuel is mixed with gasoline to reduce vehicle emissions. It is becoming the only permissible gasoline additive for oil refiners and distributors, who must meet federal clean air requirements.
Liquid Resources of Ohio plans to break down liquid wastes containing corn syrup or alcohol to make ethanol, said Tim Curtiss, chief executive and co-founder.
It has agreed to buy a former chemical plant in Medina and could open by the end of the year, employing up to 25 people.
Liquid Resources plans to purchase beer and soda from companies stuck with products that have passed their freshness dates. It will then separate the liquid from its packaging, recycle the packaging and use the liquid to produce ethanol, which is essentially grain alcohol with a small amount of petroleum.
Curtiss said the company chose to use beer and soda rather than corn, which is commonly used, because there's a steady supply.
"Our financial structure is much less volatile," he said. "The companies that supply us are companies whose volumes are very consistent."
Federal law
An amendment recently added to the energy bill making its way through Congress would double the nation's use of ethanol by 2012.
Methyl tertiary butyl ether, or MTBE, the other gas additive, is being banned by most states because it is a possible carcinogen and has been found in water supplies. Ohio's ban takes effect in 2005.
Ohio is the second-largest user of ethanol, even though it doesn't make any, said Mark Shanahan, executive director of the Ohio Air Quality Development Authority.
Seeing the lost opportunity for industry and the state's corn growers, state legislators and Gov. Bob Taft last year signed off on several financial incentives meant to establish an ethanol industry.
The state's tax credits and deductions are in addition to federal tax incentives, Curtiss said. But the most important Ohio incentive is a bond program that makes an ethanol plant 100 percent eligible for financing, Shanahan said.
Curtiss and his partners have received preliminary approval for up to $6 million in state bond financing -- the entire value of their project, Shanahan said.
Liquid Resources also has signed a distribution contract with Cargill Inc., the nation's third-largest ethanol maker. Curtiss expects Liquid Resources to sell all of its 6 million gallons of ethanol each year through Cargill.