Most ethanol plants in the US built in economically depressed areas
According to the Dept. of Agriculture's ERS (Economic Research Service), most ethanol plants in the United States are located in rural and economically depressed areas. The huge increase in ethanol production in the US, which has increased threefold from 2000 to 2006, couldn't be explained without the increase of manufacturing plants (currently at 88), most of which are located where corn is produced.
Each plant averages 35 jobs, which gives us about 3,100 ethanol-related jobs with higher salaries than local averages. Moreover, according to this study, plants generate indirect jobs and have increased corn and land prices. 70 percent of the plants are located in rural counties where population decreased between 2000 and 2006, while the national average is 50 percent of rural counties losing population during the same period. According to the study, this means that plants were located in the most economically deprimed areas.
The same applies for current facilities (67 are being built now), which are larger (and with bigger benefits, according to the ERS), 75 percent of which are placed in counties that are losing population.
Check the full report here (h/t to Ronald for the tip), because our source seems not to match the report (they could have made a mistake).
Related:
[Source: Spanish Ministry of Agriculture via Econoticias]
Reader Comments (Page 1 of 1)
small-wee-wee 9:01AM (12/12/2007)
This post has been brought to you by the letter E and the Ethanol Growers Association. Were are proud to increase food costs, grow GMO crops and provide fuel for a nation of consumers. All hail capitalism!
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Yggdrasilly 9:45AM (12/12/2007)
Still sore over losing the Cold War, SWW?
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Tim 9:47AM (12/12/2007)
This is GREAT as long as the taxpayers aren't forced to pay for it. When the taxpayers are forced to pay for it, it's just another welfare check.
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rgseidl 10:04AM (12/12/2007)
Ethanol refineries are being set up in these places because the locals are eager for jobs and waive applications through the permit process. NIMBYism is otherwise a serious risk for entrepreneurs anxious to cash in on the bonanza.
Tim - of course corn and corn ethanol are subsidized heavily by taxpayers.
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Rocketboy 10:19AM (12/12/2007)
If Ethanol is such a great idea, why do companies need my money to build plants? Are they ever going to pay me back with intrest on the free money that I'm being forced to give them? People complain about the oil companies, but what about the ethanol companies? Are they not just as bad, if not worse?
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werepants 3:28PM (12/12/2007)
I can't help but feel that subsidies are a bad thing. If we want to make alternative fuels competitive lets tax oil more. That raises the price, cuts into the profits of Big Oil, and makes the market more friendly to alternatives. It also encourages smaller vehicles and higher MPG.
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small-wee-wee 12:08PM (12/12/2007)
Yggdrasilly: Cold war, no. However I am opposed to corporate greed at the cost of individuals personal health and welfare.
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Karkus 12:05PM (12/12/2007)
Yep, I bet almost all chemical plants were/are built in economically depressed areas. No difference here. Affluent NIMBYs are more likely to hold up or stop the approval process, while the poor are more likely to accept pollution for jobs. Perhaps ethanol plant pollution isn't as bad as some others, but the same concept still holds.
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BassClef 12:23PM (12/12/2007)
Tim- I agree that this amounts to government welfare, but isn't welfare based on jobs, that unproductive workers can be fired from, better than handouts?
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Ron Steenblik (Global Subsidies Initiative) 12:48PM (12/12/2007)
Xavier,
I went looking for the ERS report, and all I found was this section in "Rural America at a Glance, 2007 Edition". While I the facts you state are substantiated in the report, I cannot find anyplace where "the ERS states that all these arguments justify the need for Government protection and subsidies to the ethanol industry." Indeed, I would be very surprised that the ERS, a relatively independent arm of the USDA, would ever make such a statement.
If I am looking in the wrong place, please point me to the correct one.
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Tim 1:03PM (12/12/2007)
BassClef- One should NEVER be FORCED to give charity against their will. Neither to individuals nor corporations. When charity is forced, goodwill simply becomes the socialist redistribution from the productive to the less productive, nonproductive or even counterproductive. This redistribution disincentives production and innovation which ultimately leads to the society’s collapse. This coupled with the expense of colonialism and the overproduction and devaluation of Fiat currency is what killed the Soviet Union, old Rome and is what is killing the USA.
Another good example of redistribution is the graduated income tax first envisioned by Karl Marx and then adopted by the democratic-socialists. The harder you work, the less percent of you labor you are allowed to keep. Why work so hard or take business risks when gov’t will just take it from you for redistribution?
In the socialist system, people believe that it is better to receive (welfare) than it is to give (taxes).
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Bob Moffitt (Bob from ALAMN) 1:25PM (12/12/2007)
As I have mentioned before, some of the ethanol plants in Minnesota are adding wind turbines and biomass generation to reduce their energy load.
Another plant in Minnesota now has a "closed loop" water system, meaning it produces near zero discharge of wastewater.
Yet another in North Dakota has built next an existing power plant so it could use the heat/steam the plant use to just vent off to produce ethanol.
In other words, there are some interesting changes happening out in the sticks...
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BassClef 2:19PM (12/12/2007)
Tim- I agree wholeheartedly. My argument is that if welfare programs are to exist then it would be better to provide jobs that contribute to the economy rather than give handouts and let people be leaches on the public and their forced charity.
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Tim 3:29PM (12/12/2007)
BassClef- That's like saying: "If I must shoot you, it would be better for me to shoot you in the leg than in the head." To that I respond. "Why must you shoot me? Please don't shoot me!"
Why must corporate welfare exist? It only makes the corporations feel well (richer & more powerful so they can contribute to & bribe more politicians) and it's NOT fair to everyone else!
Profit is for corporations, NOT tax money! (unless you live in a Socialist state)
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Yggdrasilly 4:04PM (12/12/2007)
SWW:
"However I am opposed to corporate greed at the cost of individuals personal health and welfare."
What a stirring statement of principles! I'm sure such a thoughtful idealogue as yourself wouldn't mind answering three questions for an interested observer:
1)What are the specific risks to employees and neighbors inherent in an ethanol plant?
2) How do those compare to the risks of an oil refinery (the petroleum-energy equivalent), chicken-processing (the usual industrial plant located in rural areas) and farming (what people in rural areas do anyway)?
3) What are the health risks to residents of an area remaining economically depressed?
And by the way--do you live in one of these areas? If not, why do you think these people should suffer economically because of your hostility to a free market?
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Emil 4:08PM (12/12/2007)
To Tim and Rocketboy :
May be, you both right. But at least those are US$ that circulate inside the country and don't get their way to the Persian Gulf .
It is worth google "The real cost of oil".
Another point to discuss - according to www.e85prices.com the difference in price between E85 and gasoline can be more than 30%. The MPG of E85 is 15-25% less. So maybe it is possible to reduce those subsidies, but to eliminate them - noway !
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Xavier Navarro 5:28PM (12/12/2007)
To Ron (#9)
I'm contacting you directly because my source stated that specifically - but if they made a mistake we should fix it here.
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