Iowa has 27 ethanol plants in operation and another two-dozen in the planning stages or under construction. We lead the nation in production of the alcohol fuel, but one Iowa State University economist says projections about riding the alternative-energy boom are too optimistic.
David Swenson, a lecturer in economics and regional planning, says he’s not a pessimist — he’s battling for “economic realism.” Swenson says he’s not passing judgment on the technology or adding the right amount of “new energy” to the process. He says proponents are making claims of benefits to rural areas and ethanol-producing states that are not substantiated. He says we need better measurement of the anticipated economic impact, and an honest acceptance of the fact that bio-energy has up- and downsides.
“Who’s benefiting, by how much, and what are the consequences of those changes in our economy?” Swenson says if he counted only his deposits, he’d be a millionaire in time, but you also have to count the withdrawals. By the same token, he says some of the projections about modern bio-fuel energy projection are too good to be true. He says each plant will produce somewhere around 35 good-paying jobs, and the demand for corn will keep the price high — all true, and good news.
Iowa leads the nation in swine production, and thanks to egg-laying businesses we lead the nation in poultry. Swenson says pigs and chickens eat corn, but they don’t like to eat the byproduct of ethanol plants’ corn processing, distillers grain. So there’s a higher cost to livestock producers and not the perfect win-win scenario painted by some proponents.
Swenson says ethanol and other bio-fuels are here to stay, though not necessarily in the form we’re seeing them right now. He says we’ll see tremendous transformations in how we use products grown or raised here, adding “Currently Iowa is Corn Ground Zero for ethanol.”
Swenson says there’s nothing wrong with that, but he’s analyzed reports that paint overly optimistic claims for the economic impact of the industry. He says public policy decisions have to be based on more accurate economic numbers.