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Northey: Renewable fuels important to Iowa’s economy

July 17, 2013
By Michael Tidemann - Staff Writer , Estherville Daily News

SUPERIOR - It wasn't that many years ago when there was $2 corn and $100 oil. What changed that was ethanol.

Iowa Ag Secretary Bill Northey Wednesday told attendees at the Green Plains Superior open house how renewable fuels have helped level the playing field for farmers.

Today, Iowa has 41 ethanol plants producing 3.7 billion gallons of fuel annually, Northey said. And that's a huge step in the ongoing progress for agriculture, Northey said.

"We all just lived through one of those big changes" Northey said of the advent of the renewable fuel industry.

All told, Northey said 14 billion bushels of corn are processed into ethanol in the US. "That's created a whole different market here," he said, pointing to last year's average of $7 a bushel for corn.

As a result, Iowa's ag economy has soared. Northey pointed to a total value of crops and livestock produced by Iowa farmers in 2002 of $12 billion. That rose to $20 billion in 2007, $24 billion for 2010 and $30 billion for the past two years. And that doesn't include revenue the ethanol industry generated, Northey said.

And Northey said that's why Iowa has one of the lowest unemployment rates in the country - with more beef, dairy and hogs raised in the state after ethanol came here than before.

"Sometimes because we're so close to it, we take it for granted," Northey said.

Northey also pointed out that ethanol now has 10 percent of the total gasoline market in the country.

"I argue that this industry's worth fighting for," he said, noting opposition from the oil and gas lobby against renewables.

And it's greater efficiencies in the renewable fuels industry that are making a big difference, he said. Northey said ethanol plants built in Iowa when corn was $2 are now using $6 and $7 corn and still operating.

"That's the efficiencies that have been built into those plants over time," he said.

And that technology continues to improve. Northey pointed to the Green Plains Shenandoah plant where they're experimenting with using carbon dioxide emitted from the plant to process algae to make it grow faster for biofuel production.

And, just as the ethanol industry has become more efficient, Northey sees a similar increased efficiency in farming.

"We are going to grow in the ability to grow corn," he said, noting easily a 100-bushel-per-acre increase in production since 1960.

"We'd see the value of corn soften without the ethanol industry," Northey said.

What the presence of ethanol has done, said Northey, is significantly lower gas prices with E-85 being 70-80 cents less and E-10 10 cents less.

"It means that other gasoline has to chase around to find a market," Northey said. "Ethanol from corn is the cheapest liquid fuel in the world being produced right now."



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