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 HERON LAKE, MINN. -- The gleaming $110 million ethanol plant is still rising over their cornfields, but locals say it's already the best thing to happen here in decades.

Farmers and other area residents plunked down a minimum of $20,000 each to buy stock in the plant, and the electric co-op kicked in a $740,000 loan. The Hotel Whiskey Bar & Grill fills up on some nights with the plant's construction workers. And Mayor John Hay figures the plant will triple his city's tax base, making it possible to upgrade area roads and fix the leaky roof on the city-owned nursing home.

"If they didn't have that ethanol plant, there wouldn't be much of anything going on here," said Barb Pohlman, who sells vegetables in town from the back of her pickup truck.

Ethanol mania is sweeping through Heron Lake and many towns like it across the Corn Belt. Investors are spending billions in rural communities, sparking a wild rush to secure land, an industry movement to alter environmental standards and a rash of fierce bidding by communities desperate for their own plant.

Two decades after Minnesota farmers began mashing their corn into ethanol, the clear, odorless liquid is seen by many as the best chance for America to lessen its dependence on foreign oil. Few states have as big an investment in ethanol's success as Minnesota, which has funneled more than $300 million in subsidies to plant operators since 1982.

Minnesota, with 16 operating distilleries, ranked fourth last year among all states in total ethanol production. State agencies list seven plants as expanding or planning to do so, and at least a dozen more new plants are on the drawing board.

Nationally, ethanol production has more than doubled in four years and could do so again by 2010. An industry association shows 103 plants operating today and 43 more under construction.

Builder Ron Fagen, whose Granite Falls, Minn., firm is booked with work through 2010, said he has turned down bounties as high as $1 million or more from customers looking to jump ahead on his waiting list.

"The world has changed, and it's changed within the past year," said Malcolm Tilberg, an economic development specialist who is hoping that $1.3 million to $1.8 million in tax abatements will lure an ethanol plant to Springfield, 48 miles north of Heron Lake.

'A perfect storm on the upside'

Most mornings, trucks piled high with corn line up in front of the ethanol plant in Winnebago, Minn. Their loads are crushed into a gooey soup, then heated in steel tanks that convert carbohydrates into ethanol. Nearby business owners say the plant produces a smell as thick and sweet as a bakery, but new facilities mostly succeed at keeping odors contained on plant grounds.

Corn growers call this a golden age for ethanol, but there's nothing radically new about the basic production process. Ethanol is essentially 199-proof vodka mixed with a splash of gasoline to keep people from drinking it. Henry Ford used the fuel in early versions of his Model T. Abraham Lincoln taxed it to raise money during the Civil War.

Ethanol's backers tout the fuel as both renewable -- simply grow more corn -- and a clean-burning alternative to gasoline, but the current frenzy has as much to do with greenbacks as it does a green planet. A federal energy bill signed a year ago mandated a doubling of the nation's renewable fuel supply by 2012, to 7.5 billion gallons. The law also prompted oil refineries to use ethanol as a replacement for a cheaper clean-burning gasoline additive found to contaminate groundwater.

Then oil prices shot to more than $70 a barrel, and General Motors and Ford began spending tens of millions of dollars to promote vehicles that run on fuel containing up to 85 percent ethanol. Even though gasoline prices have since come down, ethanol profits remain high enough in many cases to pay for a new $80 million plant in 18 to 36 months.

"It's been a perfect storm on the upside for ethanol," said David Morris, vice president of the Institute for Local Self-Reliance in Minneapolis, who has been an energy adviser to four presidents.

This year, more than half of all ethanol produced in Minnesota will be shipped by rail or barge to other parts of the country to meet refiners' needs. Minnesota and three other states require the use of renewable fuels, and more are considering such measures. In Minnesota, all gasoline contains 10 percent ethanol.

In the meantime, old money and new money alike are rushing to build facilities to boost ethanol production.

In Lyle, Minn., farmers, small-town business owners and others camped overnight earlier this year to be first in line to buy shares in an Iowa plant. Absolute Energy sold all $64 million worth of stock in a matter of hours, turning away another $3 million in surplus orders.