Did The IRL Snub American Ethanol Producers?

The Indy Racing League (IRL) announced on November 18, 2008 that the official ethanol supplier would be the Brazilian trade promotion agency APEX-Brasil. The move from an American fuel supplier to a Brazilian based supplier has caused quite a stir especially among ethanol supporters and corn growers.

I have waited to comment on this situation to give it a little time to let the facts come out. I thought that maybe Brazil wanted the deal more and simply out bid domestic producers but that doesn't appear to be the case.

The first hint that the IRL was on defensive about their decision was when they attempted to spin their justifications behind the decision in a recent press release.

"The ethanol producers recently notified the IndyCar Series that it would not be renewing the agreement for 2009 and beyond and EPIC is ceasing operation. No one from any other part of the American-based ethanol community stepped forward with a substantial proposal. Soon after, the IndyCar Series and APEX-Brasil reached a preliminary agreement. As part of that agreement, we plan on starting our 2009 season with American-produced ethanol.

The Ethanol Promotion and Information Council (EPIC) had been the fuel supplier up to this point. The part about EPIC ceasing operation is what caught my attention since it was announced that EPIC and Growth Energy, another ethanol industry group would be merging.

It was revealed in an article last week that there are American ethanol producers that are interested in sponsoring the series.

Several American ethanol producers outside the EPIC umbrella came forward to offer their services as a supplier during last week’s meetings, Angstadt said. But IRL officials think it’s too late to change course, plus motorsports marketers said independent American suppliers would have difficulty matching APEX-Brasil’s resources to feed money and promotional muscle into the series.

I know this is all happening after the deal with Brazil was made so too little too late righ?. Well, I don't know. According to the Desmoines Register, bids from American ethanol groups were not sought out.

Angstadt said he didn't specifically seek American ethanol groups as potential sponsors to counter the Brazilian bid.

Just looking at it from the outside it appears that the IRL snapped at a deal with Brazil before they fully explored the interest of the American ethanol industry to sponsor the series. Only time will tell how this decision will effect their business.