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Study: Ethanol expansion to kick-start Illinois economy
By TIM ALEXANDER
Illinois Correspondent

BLOOMINGTON, Ill. — According to the Illinois Corn Growers Assoc. (ICGA), a study released in late March shows that the Illinois Renewable Fuels Act (SB 2236) has the potential to kick-start the state’s rural economy and provide increased competition for high-priced gasoline.

The study, conducted by LECG, LLC, places the nation’s demand for ethanol at 10 billion gallons or more by 2015 and points to Illinois’ potential as a key player in the expanding ethanol market. An increase in production of one billion gallons of ethanol would boost demand for Illinois corn by more than 360 million bushels, or more than double than the current market, the study claims.

“The Illinois Renewable Fuels Act will add as much as one billion gallons of new ethanol production and create more than 36,000 new jobs,” noted John Kuhfuss, ICGA president and a corn grower from Mackinaw.

According to LECG, 24 new ethanol refineries would be necessary to process an additional one billion gallons of ethanol yearly. The Illinois Renewable Fuels Act would help stimulate the growth of the new refineries, which are expected to generate more than $1 million in local and state tax revenue apiece each year.

SB 2236 contains provisions, which would provide $25 million annually over the next two years to fund the Renewable Fuels Development Program and provide incentives for plant expansion and new construction. The bill also sets aside funds for research and development for universities, the National Center for Agricultural Research in Peoria and various other agencies.

The Renewable Fuels Assoc. is positive that ethanol supply will be able to keep up with demand, said RFA president Bob Dinneen.

“Our industry is adding capacity at a phenomenal rate and we will be able to adequately supply ethanol to the markets that need it,” said Dinneen, who testified before the Senate Environment and Public Works Committee in late March.

Ninety-seven ethanol plants are currently operating in the U.S. with a total capacity of 4.5 billion gallons, said Dinneen, and facilities for another two billion gallons of capacity are already under construction.

In order to reach 1.88 billion gallons of ethanol, annual operations expenditures and capital spending would add $8.9 billion to gross output in Illinois, according to the study. Tax benefits include a projected $82.6 million boost to Illinois’ state and local revenue and more than $896 million in additional federal tax revenue.

This farm news was published in the April 19, 2006 issue of Farm World.

4/19/2006