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May 4, 2020Hutchinson, Kan. |  By: AP

Dropping oil prices damaging Kansas ethanol industry

HUTCHINSON, Kan. (AP) - A sharp drop in gas prices is hurting the ethanol industry in Kansas. Two of the state's ethanol plants are idle and nine others have cut production by at least 40%.

Gas prices were declining before the coronavirus spread, but prices fell more than 50% after the pandemic started. That caused prices for ethanol, which makes up 10% of much of the fuel in the U.S., to plunge.

Prairie Horizon Agri-Energy in Phillipsburg has temporarily stopped production, as has the state's newest plant in Colwich. In response, some plants have begun producing ethanol that can be used in hand sanitizer.