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The Impact of Renewable Energy in Iowa

posted on January 17, 2007 at 4:21 PM

More Iowans are employed than ever before. State tax revenues are up and Iowa’s financial services sector is prospering. Its construction industry is healthy and, perhaps most remarkably, Iowa has an expanding hospitality sector.

Much of the state’s optimism is being fueled by an industry that hardly existed a decade ago. Renewable energy is no longer just the darling of granola crunching idealists. It has become the consort of steely-eyed capitalists.

Iowa is rapidly being re-shaped both physically and fiscally by renewable energy development. Wind generators have become a part of the Iowa landscape. Indeed ten Iowa schools utilize the generators for their own needs. The state is now the third largest source of wind energy in the country.

Iowa is also a leader in the development of soy-diesel fuel and lubricants. Ethanol plants are being launched so fast that their consumption of Iowa corn has moved market prices to record levels not seen before without a serious drought.

Historically much of Iowa has suffered lower prices compared to the eastern Corn Belt because of the distance to river terminals or processing plants. Ethanol plants have effectively shifted geography. Markets are now next door and that proximity is adding billions more to the state’s economy. Iowa’s agriculture, the state’s most traditional, some might say staid, sector is positively energized by its emerging role as a player on the world energy stage. Already in the works, the next generation of ethanol plants will utilize another Iowa staple, renewable grasses rather than corn.

Here to now the combination of federal and state subsidies, high world oil prices and private capital has effectively grown Iowa’s ethanol industry. The next generation of ethanol plants may require substantial research and development monies. With that in mind, the new Governor campaigned on the promise of what he called the “Iowa power fund,” a $100-million energy development account.

Culver: We’re going to create an Iowa power fund to invest in and attract cutting edge research and development. This will ensure we can lead the way not only in alternative fuels but in geothermal, biomass, wind, and solar energy. It’s time for Iowa to become the first state in the nation to declare our independence from foreign oil.

The fund would be administered by a new executive office, the Governor’s Director of Renewable Power. Part of the Culver vision is to convert the state’s fleet to e85 fuel, an 85-percent ethanol blend, and to encourage stations to install e85 pumps.

However, new energy development, especially ethanol, may be at odds with another priority, water. Lawmakers are being encouraged to pass legislation that would assess the state’s water resource, both its quality and quantity. Every gallon of ethanol produced requires the use of three gallons of water. And the increased demand for corn will likely complicate efforts to clean up Iowa’s waterways.

Ethanol’s byproduct, corn gluten, is typically fed to livestock, another threat to water quality. But the higher grain prices driven by ethanol demand may well curb livestock production, adding another issue to energy development.

Culver: We will protect the land, the lakes, the rivers, and the streams that we all love; however, with the right balance, we can harvest rewards beyond our wildest imagination.

Developing a significant energy sector may be within the state’s grasp, but there will be a price.

Tags: alternative energy economy energy policy Energy/Environment industry Iowa Iowa legislature


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