Economic Data By State Supports Ethanol's Fight to Keep RFS

Economic Data By State Supports Ethanol's Fight to Keep RFS

Fuels America keeps momentum rolling following pro-RFS media buy with state-by-state data on renewables' economic impact

Agriculture reaps the greatest direct economic benefit from renewable fuels in terms of jobs and wages, a new study released Wednesday by Fuels America and prepared by John Dunham and Associates has found.

The nearly 239,000 agriculture jobs and $9 billion in direct agricultural wages created by the renewables industry, the study finds, contribute to the total of 852,000 jobs created via three areas: direct impact, supplier impact (direct spending by regional supplier firms and employees) and induced impact (re-spending by industry and supplier employees).

Together, the three areas represent $46 billion in wages and $184.5 billion in total national output, the study found.

Fuels America keeps momentum rolling following pro-RFS media buy with state-by-state data on renewables' economic impact

The study was completed just ahead of an expected decision on final requirements in the Renewable Fuel Standard, an Environmental Protection Agency-managed policy that mandates production volumes for renewable fuels in 2014.

As proposed in November, the policy calls for a 1.4 billion gallon reduction in renewable fuel production requirements, down from 16.5 billion gallons in 2013 to 15.2 in 2014.

Production, manufacturing jobs
Biofuels groups are hopeful the new figures on economic activity will urge EPA to reconsider lowering the required volumes.

Author of the report, John Dunham, says one of the most important impacts seen from renewable fuels production is the opportunity for young people to return to their home farms.

"It gives [farmers] a way to go ahead and pass that farm on to the next generation," he said. "If we can put a policy in place that extends [the farm] one more generation, that's really important to farm families across the country."

Related: Ethanol Hopes Major Media Buy Will Loosen Petroleum's Grip

Biofuels advocates also tout job creation in sectors outside ag production, in areas like research and development, manufacturing and retail.

According to Adam Monroe, Americas Regional President of Novozymes' Business Development area, the RFS allowed his company to invest in biofuel R&D staff and construction of new facilities.

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He notes that the company has recently completed a $200 million project in Blair, Neb., and also has announced a new ag R&D facility in Research Triangle Park, N.C., where 100 new jobs will be created with an investment of $36 million.

"This would not have happened without the Renewable Fuels Standard," Monroe said.

Appeal to Congress
As with an ad campaign Fuels America released Tuesday, the economic reports and renewed push for RFS support come with a nod to politics– the new data can be broken down by state and by Congressional district.

Biofuels advocates say the communications efforts expose $885 million in spending by the petroleum industry in lobbying and about $20 billion received in tax subsidies. Tuesday's ad campaign launch included a digital ad focus on the political news site Politico, a television commercial and a website, www.oilrigged.com.

The oil industry, says Larry Ward, senior vice president of project development at POET, is more than 100 years old, versus the ethanol industry that is fewer than 20 years old. That should urge Congress to revisit investments in a younger, growing industry.

"We've seen tremendous growth over the last 10, 15, 20 years in the industry – we've grown through a lot of innovation," Ward said, comparing the oil industry's long-standing tax incentives with the tax benefits that he says are no longer in place for ethanol.

"The ethanol industry today really survives on the market opportunity that is has," he said.  "We see a lot of opportunity in the future for greater access to the consumer for ethanol."

But if the RFS is lowered, Monroe added, that growth is in jeopardy. He pointed to the RFS' ultimate goal of producing 36 billion gallons of renewable fuels annually by 2022, noting that current volume requirements mean the industry is only a third of the way there.

"We have enough resources out there to plant way more fuel than we even have outlined in the RFS," he said. "We are a long way from being mature."

State by state data released as part of the new study, as well as study methodology, can be found on the Fuels America website.

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