Report highlights economic impact of ethanol in N.D.

By Erin Voegele | January 17, 2013

A report published by the North Dakota Alliance for Renewable Energy Inc. estimates that the renewable energy industry contributes more than $1 billion per year to the state’s economy, with $643.5 million resulting from ethanol production.  The study, titled “Renewable Energy Industry’s Contribution to the North Dakota Economy,” was conducted by North Dakota State University’s Agribusiness and Applied Economics Department on behalf of NDARE. The analysis addresses a range of renewable energy sources, including ethanol production.

While North Dakota is recognized as one of the leading energy producing states in the nation, the report notes that the state produces more than just fossil fuels. In recent years renewable energy production within the state has grown considerably, particularly in the ethanol and wind industries.

“North Dakota has produced ethanol since the 1980s, but expansion of the industry in the 2000s increased capacity to 377.5 million gallons annually by 2011,” said the authors in the report.

To conduct the study, researchers collected expenditures data from renewable energy companies operating within the state. The data was used to estimate the economic contribution of these industries to the state’s economy. According to the report, data was collected for both the construction and operations phase of renewable energy firms, and the North Dakota Input-Output Model was used to estimate the economic contribution renewable energy activities have made to the state’s economy in terms of personal income, retail trade, total business activity, employment and tax collections.

Regarding the ethanol industry, ethanol plant operations represented $208.5 billion in operations expenditures in 2011. Ethanol plants also employed 202 people during the year. Overall, ethanol production made a $643.5 million economic contribution to the state’s economy.

According to the report, ethanol production within North Dakota grew from 88.5 million gallons in 2006 to 377.5 million gallons in 2011, representing a 327 percent increase. Over the same time period, the nationwide growth in ethanol production capacity was only 185 percent. The analysis adds that between 2006 and 2008, four large ethanol plants opened within the state, while two small plants in operation since the 1980s closed in 2007 and 2012. The current production capacity of the state is 332 MMgy.

A full copy of the report can be downloaded from the NDARE website