IRL deal a setback for Indiana ethanol

At a time when the motor sports industry is working to secure sponsors to keep racing leagues running, the IRL announced a major deal. But the deal is fueling debate in Indiana.

The state is a major supplier of corn used to make ethanol but not all ethanol is the same. And for the last several years the Indy Racing League cars have used American-made ethanol. But the IRL said it's steering away from that this year because the supplier has backed out and a Brazilian joint-venture is willing to pay millions of dollars to promote and supply ethanol to Indy cars.

The president of IRL's commercial division said the Brazilian product, made of sugar cane, has already been tested in open-wheel racing.

"So, it's not about sugar cane versus corn…What we're trying to say is, 'This is ethanol. It's clean burning, it's renewable," said Terry Angstadt of the IRL.

The bad part, according to the Indiana Corn Marketing Council and others, is that by the next Indianapolis 500 foreign fuel might be running the show. The American Future Fund is behind a radio ad encouraging people to contact the IRL and tell it to stick with American ethanol.

Mike Shuter of the Indiana Corn Marketing Council says he'll continue to support the IRL but he'd like to see the league change its mind. That's unlikely.

"It's disappointing to see a foreign fuel come in and advertise right in the middle of the heartland," said Shuter.

"We've agreed to the major deal points and I don't think it's terribly ethical to go back on that when we think it's an appropriate direction for our company and a very good one for the ethanol industry overall," said Angstadt.

The IRL expects to sign the multi-year deal next week in Brazil. Angstadt said, to start the season off, the Brazilian group plans to use U.S. produced ethanol but there's no guarantee that will be the case come May.