An abandoned house sits on a rural lane near Dumas, Texas. Town leaders are hoping to land an ethanol plant in an attempt to create jobs and bring economic development to Dumas. STEVEN LINE/MORRIS NEWS SERVICE

At some points in history, only one family at a time lived in the town.

The town now has about 13,000 residents, but without economic development, it won't take a plague of pests or harsh climate to send residents packing, said state Rep. David Swinford, a Republican who calls the town home.

They'll leave when they can't find jobs to support themselves.

Town leaders thought they had a plan when the recently-formed Dumas Economic Development Board started talks with the Diamond Shamrock energy company to build a local facility to produce ethanol, a fuel additive produced from corn, grain and other carbohydrate-rich crops.

But about that same time, Valero Energy Corp., another Texas oil company, acquired Diamond Shamrock. Since the fall, the ethanol project has been on hold while Valero executives study its economic viability, said spokeswoman Mary Rose Brown.

Valero is one of the country's top 10 producers of MTBE, a controversial petrochemical additive and the main competitor of ethanol.

Although Valero is spending $20 million to retrofit refineries in California for ethanol production because of federal mandates for reformulated gas, some folks around Dumas think Valero might be reluctant to begin making more of a substance that competes with one of its main products.

Dumas residents are still looking at whether farmers could pull off the plant without Valero's support.

"We'd like for it to be a grower-owned plant so that farmers can participate in the profit stream," Dumas corn grower Dee Vaughan said.

Building the plant through a cooperative instead of a corporation would allow organizers to qualify for loan guarantees to cover the massive cost of construction. A 15-million gallon plant would cost investors about $31 million to build.

The Dumas plant, according to the group's feasibility study, would employ 35 people with average annual salaries between $45,000 and $50,000.

"That's a pretty significant contribution in a town the size of Dumas, in a rural town," Mr. Vaughan said.

The main problem in securing an ethanol plant in the Panhandle is that grain costs more in the High Plains than in the Midwest. The plant's profitability hinges on the commodity price of grain, which accounts for one third of ethanol's production cost.

Nationwide, the average price for producing a gallon of ethanol is about 96 cents. Ethanol is a competitive additive only when gasoline costs are high, between $1.79 and $2.25.

But projected demand based on the phase-out of MTBE sets up a good scenario to make access to ethanol competitive, advocates say.

Mr. Vaughan said good merchandising and planning on the part of the ethanol plant could make the product compete, regardless of the gas market.

Sunday: With stricter environmental laws and ongoing political unrest in the Middle East, many in rural America say the answer to the country's energy woes is ethanol, a fuel additive made from corn.

Tuesday: United Energy Distributors in Aiken is the nation's first "biofuel retailer," according to the National Ethanol Vehicle Coalition.

Wednesday: The United States depends on foreign oil while many other countries, including Brazil, have vehicles burning 100 percent ethanol.

Thursday: Energy company Diamond Shamrock was talking about building an ethanol plant in rural Dumas, Texas, but things got quiet after the company was acquired by a major oil producer.

Friday: Researchers say they are improving ethanol to the point where the natural fuel performs as well as gasoline.

Saturday: An expected increase in ethanol demand has Midwestern states vying to be the market leader.