Ethanol a Boon to Rural Economies
LINCOLN — Ethanol production is creating thousands of jobs to sustain rural communities in Iowa and Nebraska, economists in both states reported this week.
A typical 100 million gallon refinery in Nebraska creates 113 jobs and adds $1.3 million a year in retail sales for the trade area, based on studies by Donis Petersan, a senior economist with Nebraska Public Power District.
In late 2007, NPPD estimated that the ethanol industry had added 700 permanent jobs in Nebraska with average salaries of $49,000. In addition, about 1,500 jobs were created in related industries and increased economic activity.
The figures were included in a report released by Ethanol Across America, a coalition of biofuels organizations.
NPPD’s total job estimates are conservative when compared with an Iowa State University economic impact study also released this week.
ISU economists estimated that for every ethanol-industry job created in Iowa, there were 4.38 additional jobs created in the rest of the economy.
ISU economist David Swenson said Iowa’s 27 ethanol-producing plants required an estimated 1,242 jobs, meaning that the total job impact for Iowa would be 5,440 jobs.
He estimated the total impact of those jobs at $245 million. "That’s not chump change," Swenson said Friday.
He said the total "net" economic impacts of ethanol production are difficult to calculate because of the need to deduct offsetting economic consequences of the industry.
For example, increases in crop prices are a positive impact for farmers, but they result in higher prices to livestock producers and drive up costs for renting land.
In another report this week, biofuels industry economist John Urbanchuk said the total economic activity of Iowa’s biofuels industry added $12.7 billion, or about 10 percent, to Iowa’s gross domestic product.
He said biofuels production in the state "supported creation" of 92,000 jobs.
Urbanchuk’s analysis was prepared for presentation at the Iowa Renewable Fuels Association’s annual summit.