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| Michigan corn grower touts economic impact of ethanol |
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Dear Editor,
I was disappointed to see the short-sighted article published in the May 19 edition of Farm World regarding Mark Skidmore’s ethanol subsidy research (Economist says ethanol subsidies not worth cost; page 1). While Mr. Skidmore no doubt used accurate numbers when calculating the total ethanol tax incentive costs, what he failed to calculate was the total economic impact of an ethanol plant.
The ethanol industry does not simply create jobs within the actual ethanol plant. Throughout the entire economy, the ethanol industry supports nearly 400,000 jobs – in sectors such as construction, transportation, research and development and much more.
While Skidmore was correct that a 50-million-gallon ethanol plant in Wisconsin may only support 32 full-time workers, it will also create 648 jobs throughout the entire local economy, generate an additional $29 million in household income and expand the local economic base of the community by $84.02 million annually.
In fact, the entire American ethanol industry in 2009 added $53.3 billion to the nation’s Gross Domestic Product and put an additional $16 billion into the pockets of American consumers. This combination of increased GDP and higher household income generated an estimated $8.4 billion in tax revenue for the Federal government and nearly $7.5 billion of additional tax revenue for State and Local governments.
The estimated cost of the two major Federal incentives in 2009, the Volumetric Ethanol Excise Tax Credit and ethanol Small Producer Credit, totaled $5 billion. When you run these kinds of numbers, you can clearly see that the ethanol industry generated a surplus of $3.4 billion for the Federal treasury in 2009 – hardly a raw deal for taxpayers as Skidmore claims it to be.
Not only does the American ethanol industry make money for the Federal government, but it actually saves them money as well. The production and use of 10.6 billion gallons of American-made ethanol in 2009 reduced the demand for imported oil by 364 million barrels, for a savings of $21.3 billion.
The ethanol savings do not simply stop at the Federal level. Consumers are saving money as a result of ethanol as well. By blending gasoline with ethanol, we extend our fuel supply and reduce the cost of our fuel at the pump.
When commenting to the Wall Street Journal on the economic impact of ethanol, the head of commodities research for Merrill Lynch stated that because of biofuels such as ethanol, a gallon of gasoline costs 15 percent less.
If we are going to try to calculate the ‘true cost’ of ethanol tax subsidies, let’s level the playing field and determine the ‘true cost’ of oil.
Ethanol is not the only industry receiving government assistance, oil too collects Federal subsidies – on top of the billions of dollars the U.S. spends every year defending our access to foreign oil. What cannot be measured is the cost of the countless invaluable lives of American soldiers who lose their lives fighting this fight.
In contrast, the American ethanol industry keeps American dollars here in the United States and provides jobs for hundreds of thousands of our fellow countrymen without costing the government nearly a fraction of the resources they devote to oil – and that’s a good deal for every American.
Sincerely,
Jeff Sandborn
Vice President
Michigan Corn Growers Assoc.
Ethanol Committee Member
National Corn Growers Assoc.
Corn Farmer from Portland, Mich. |
| 6/2/2010 |
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