Bob Casper has had a large hand in turning ethanol from a marginal fuel — close to something like used cooking oil — to 10 percent of the nation's automobile fuel supply.
Casper, 54, built Poet Ethanol Products from a small operation in his basement in 2000 into the distribution and marketing arm of 35 ethanol plants in the Midwest. It is the biggest ethanol-marketing company in the world.
The company has a 2-year-old, 29,000-square-foot open-plan headquarters at 3939 N. Webb Road. Its employees are busy managing the company's ethanol trucks and rail cars, selling and delivering ethanol by-product carbon dioxide to major soft drink and beer makers, along with other operations.
Casper, who grew up in Kentucky, graduated from Trinity University in San Antonio in 1977. He and his wife, Arlo, have two grown daughters.
What is your business, exactly?
"Once ethanol is made, we take that ethanol, take title to it at the plant and make it appear at the point where the truck that delivers it to the gas stations pick it up, and everything in between.... We do that in the 48 contiguous states. The people we sell to will be the big major oil companies, people like Exxon, Shell or British Petroleum, who blend that with their gasoline."
How did you get into this?
"I was let go — I had a job at Koch — and even though I'm not from Kansas, my two girls grew up here. They were in elementary school and high school. We had been in Wichita for about 15 years and felt that our community was Wichita.... When I lost my job at Koch, the decision was to find another job similar to what I did, but there wasn't going to be another job here in Wichita, so it would mean moving. I struggled with: is the move more important than uprooting everything we had, all the relationships we had. Or could I find something in Wichita."
How were you able to move from looking for a job to creating one?
"The wonderful thing about being out at Koch is the entrepreneurial environment.... I was there for 21 years, and every activity I was involved with was to create a new venture. I have a lot of opportunity to learn how to be an entrepreneur, because that is how the company operated."
How did you identify ethanol as your new career?
"When I was looking at what would be that job. I thought, 'You know, ethanol is an interesting molecule.' I knew about it from the refining side of the business. It's high in octane. It has certain clean characteristics. I was familiar with the trends, that the things (the government) was taking out of gasoline were the clean components.... So I thought, I'll go out and build an ethanol plant."
So why didn't you build a plant?
"After getting into the business and analyzing what the (financial) return was based on market values, I found there was no margin in ethanol. I was kind of surprised.... Everybody is producing it at break-even, meaning that people are producing more than the market wants, so they're competing with each other until somebody has to shut down. So, I thought, that's kind of weird. I had this file and I remember throwing it on the bed and thinking 'This is terrible. This business isn't going to work.'
"For the next two weeks, it bothered me. I kept thinking 'I just don't get it. This seems like such an obvious thing. What's up with that?' I was out running and thought: It is possible that people just don't know what to do with it.... I thought maybe the business isn't building an ethanol plant, maybe the business is building a logistics and marketing company to build a market for ethanol."
So, what is the case for ethanol?
"We are able to produce ethanol that is less than the market price for gasoline. Granted, gasoline can be produced for less, too, because there is a margin that goes to the refiners. But if you look at their break-even and our break-even, we still compete, without the excise tax credit. So, to me, we have created an alternative to crude-based fuel.... And the benefit to the consumer is approaching 10 cents a gallon of fuel."
Why not lift the excise tax credit that encourages blenders to put it in their gasoline?
"The problem isn't production.... The problem is that all rules and regulations mandate that we have to use a minimum of 90 percent petroleum-based fuel in our cars. We can't do it differently. It's against the law. So we just feel we should open up the market and let the consumer decide. Let market forces determine what fuel gets used.
"I don't believe in mandates for use of any fuel; I'm not looking for that. But there are some things that market forces won't overcome. I don't think we will get flex-fuel vehicles unless the United States government says, let's have flex-fuel vehicles, just like we have seat belts and airbags and onboard diagnostics."
Won't it drive up corn prices?
"What happens with ethanol is what should happen with every fuel. At some point, the price will get to where it's no longer competitive. Either the raw material costs go up or the material it's replacing in the gasoline pool becomes less expensive. Where that equilibrium is is where it should be.... If ethanol balances out at 13 percent of the gasoline supply, so be it. But if it balances out at 50 percent, we can do it."