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Study touts renewable fuel benefits

April 30, 2014 | 0 comments


A new study from a renewable fuels group finds that the homegrown fuel industry supports over 19,000 jobs and wages of $982 million in Wisconsin.

Fuels America, a coalition of organizations committed to protecting the Renewable Fuel Standard and promoting the benefits of all types of renewable fuels, released the economic impact study April 23.

It provided national impacts, but also state-by-state economic impact.

During a press call to talk about the study, Jon Doggett, vice president of public policy for the National Corn Growers Association, said it found that the renewable fuels industry has $184 billion in economic output across the country.

John Dunham, managing partner of John Dunham and Associates has been doing economic impact studies for 13 years and said he used a "transparent model" to do this study. "It is not a black box study."

Dunham said the renewable fuel industry is one that has been growing fairly rapidly and is quite broad. It is responsible for $184.5 billion in economic output and 852,056 jobs.

Those jobs mean over $46 billion in wages; and those workers paid $14.5 billion in federal, state and local taxes each year.

"These are real jobs at each and every facility," Dunham said.

In Iowa the biofuel industry means 73,000 jobs, says Doggett, and it means more than that for corn farmers.

"For corn farmers it goes beyond the numbers. When I talk to corn grower's groups, I ask them how many of them have kids who came back to the farm because there is a future there. Now 20-30 percent of the room stands up," he said.

"That's why this is so important. It brings economic vitality back to communities and allows them to have theaters and hospitals and allows their kids to come back to the farm," Doggett said.

Adam Monroe, regional president of Novozymes, North America, said his company is an example of the kind of economic driver that biofuels can be. The company holds 6,000 patents and has "a huge sales force and technical group" related to grain-based ethanol.

The company has invested in a $200-million enzyme facility in Nebraska where there were 400 construction jobs for three years. Today that facility is producing enzymes for corn ethanol plants and advanced biofuel companies.

"This would not have happened without the Renewable Fuel Standard," he said. "That's how important it has been. This impact is an incredible story."

New developments

Larry Ward, senior vice president of project development for POET, a company with 27 bio-refineries, said the company produces the equivalent of 20 Exxon Valdez tankers – 1.6 billion gallons of ethanol. What's also important is that they do that in small, rural communities.

"These are great, local, highly technical jobs."

Now, community colleges in Iowa, Minnesota and North Dakota have created curricula to educate workers for these biofuel jobs – something POET has been involved in helping develop.

"These are jobs that are very meaningful to these communities.

"We at POET take very seriously our role as business leaders in these communities. In many of these towns we are the largest employers."

The company is working on a cellulosic ethanol plant in Emmetsburg, IA that they are calling Project Liberty, where corn stover was stockpiled last fall to begin producing the biofuel from cellulose this year.

The plant will produce 20 million gallons of cellulosic biofuel per year when it gets started. Later it will scale up to 25 million gallons.

Farmers within a 40-mile radius have harvested 100,000 tons of corn cobs, leaves, husks and some stalks to get the plant started.

"Ethanol production has been a boon to agriculture."

In some communities impacted by ethanol, new farm equipment dealerships have even sprung up.

Renewable fuel standard

The Renewable Fuel Standard (RFS) was signed into law by President George W. Bush, calling for the use of American-grown renewable fuels for the transportation sector but the renewable fuel leaders said it continues to come under attack from big oil.

The oil industry is urging the Environmental Protection Agency (EPA) and/or Congress to repeal or weaken the RFS so that renewable fuels do not further compete with their market share.

The Fuels America coalition says that the RFS is important to continue driving the billions of dollars of economic impact across America from renewable fuels. The coalition recently joined others who have submitted comments to the EPA urging the agency to protect the RFS.

Monroe, of Novozymes, said representatives of the American Petroleum Institute are "working every day to repeal the RFS." Those in support of the RFS are "outnumbered and outgunned," he added.

Oil interests have spent almost $855 million on lobbyists and campaign contributions over the last five years, he said, and have gotten $20 billion in tax subsidies.

Doggett, with the National Corn Growers Association, said the oil and gas industry is over 100 years old and is mature. They get tax breaks that are embedded in the federal tax code.

By contrast, the biofuel industry is less than 20 years old and is a small, but growing part of the fuel sector.

The federal ethanol tax credit was 45 cents per gallon, but it expired at the end of 2011. That's also when the tariff on imported ethanol expired.

Monroe said that the United States has enormous biofuel potential and the ability to supplant even more fuel than it does today. "This industry is a long way from being mature."

But the EPA's action on the RFS is "sending uncertainty into the biofuel industry."

In Brazil, he noted, the nation has a standard of 25 percent ethanol for renewable fuels.

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