New Studies Tell Ethanol’s Statewide Success Stories

By Bob Dinneen | November 05, 2012

In the midst of a sluggish national economy, the American ethanol industry continues to generate jobs, revive rural economies and build businesses in many sectors of the economy, from energy to construction. The industry’s future includes more growth and new technologies, including cellulosic (nongrain) feedstocks.

That success is being realized 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 including Minnesota, the nation’s fifth-largest ethanol producer, 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 them 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-’10 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 wages paid by 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 and seven of the eight employing between one and 10 workers, while one employs a staff of 51 to 100. Currently, ethanol production accounts for 206 jobs within Georgia, generating $105.32 million in direct economic activity and indirectly supporting a total of 1,026 jobs.

Because of the RFS, the U.S. biofuels industry continues to expand and evolve.  As a result, the future is bright in rural communities, and America is stronger and more secure, from our economy to our energy sources.

Author: Bob Dinneen
President and CEO,
Renewable Fuels Association