Three Statewide Reports Prove: Ethanol is an Economic Powerhouse

Monday, October 22, 2012

By Bob Dinneen

The Renewable Fuels Standard has laid the foundation for private investments in the domestic biofuels industry that are reaping a rich harvest of returns. That’s why with 209 plants in 29 states, the industry supports more than 400,000 jobs, contributes more than $24 billion to the economy, and provides $29.9 billion in household income.

This progress translates into success stories in a growing number of states and communities across the country. That’s the clear message of three recent studies of the industry’s economic benefits in the nation’s fifth largest ethanol producer, Minnesota, as well as two states where the industry is only beginning to grow, Ohio and Georgia.

In a study released in October, the Minnesota Department of Agriculture reports that the ethanol industry supported more than 12,600 jobs and generated more than $5 billion in economic activity during 2011.

With 21 plants – 10 of which are farmer-owned – and 11,000 farmers supplying feedstocks, the ethanol industry offers an economic lifeline to Minnesota’s farmers and rural communities. By processing corn into feed and fuel rather than simply selling corn as a raw commodity, the state’s ethanol industry added $912 million to the value of corn last year alone. Moreover, the report continues, “Minnesota’s ethanol industry has a ‘multiplier effect’ that benefits many economic sectors across the state, including agriculture, manufacturing, transportation, services, construction, and trade.”

Assessing the biofuels industries in Ohio and Georgia, two other studies found similar current and potential economic benefits. In its study, the Ohio State University Extension Community Development concludes that ethanol production has brought economic and employment benefits to the Buckeye State.

With Ohio’s ethanol industry continuing to grow, new construction and additional upgrades of Ohio’s six ethanol plants have attracted $825 million in capital investment. Just operating these plants supports 273 fulltime jobs, with an annual payroll of $9.36 million. When the total impact of plant construction – as the economists put it, “direct, indirect, and induced” – is taken into account, the industry contributes $1.1 billion in economic activity in Ohio, supporting 12,975 jobs and generating $607 million in income.

Meanwhile, in Georgia, a recent study by the University of Georgia’s Selig Center for Economic Growth, takes a new look at biofuels as part of the state’s fast-growing “life sciences industry,” also including agriculture, pharmaceuticals, biotech and bioenergy. Jobs in this industry increased by 1.5 percent from 2007-2010 in Georgia, while statewide employment dropped by 7.9 percent during the same period. Wages paid by companies in this sector also increased at a faster rate (4.4 percent) than those for other companies within the state (4.2 percent).

While ethanol production has yet to reach its full potential in the state, the report identifies eight biofuel companies active within Georgia, with six having been in business for 10 years or less. Currently, ethanol production accounts for 206 jobs within Georgia, while the industry’s total generates $105.32 million in economic activity directly and indirectly supporting a total of 1,026 jobs.

From Minnesota to Ohio and Georgia, American ethanol is driving forward to a promising future. Don’t let the biofuelsbashers put speed bumps in the way of growth and progress.

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