Associated Press
06-01-07
Ethanol plant a ray of hope in Midwestern town
JEWELL, Iowa (AP)--Sitting around a table at Grandma June's, the white-haired
ladies can look out the storefront window and watch the trucks rumble through
town to the new ethanol plant.
The women gather most days at the small cafe, enjoying a chance to chat and
drink coffee in a place that feels like a farmhouse kitchen. Often, the talk turns to
the trucks that pass every few minutes, delivering corn to the plant or hauling
away ethanol.
"It sure has changed the town," said Bea Imlay, who operated local gas stations
with her husband before they retired. "They've been so supportive of the town
and they're very good to the employees."
But there are limits to what one company can do for a community, especially a
place like Jewell that has been on an economic slide for decades. Communities
from Indiana to South Dakota are scrambling to join the ethanol boom, while
others are cautious, concerned about the effects on the environment and their
way of life.
VeraSun Energy Corp. has dropped plans to build a plant near Milford, Ind., after
more than 1,000 residents lined up against the idea, worried about pollution,
odors and traffic. In South Dakota, Davison County officials want an ethanol
company to help pay for some $2 million in road repairs blamed on increased
truck traffic. In Illinois, a citizens' group filed a federal lawsuit to block further
construction of an ethanol plant near Hennepin, and there are ethanol plant
challenges in Ohio and Michigan.
Nothing so dramatic in Jewell, an hour's drive north of Des Moines.
Many here are optimistic about the effects of a plant that will contribute up to
$300 million a year to the local economy through salaries, taxes, corn purchases
and other expenditures. The Horizon Ethanol plant, built a year ago by Sioux
Falls, S.D.-based Poet LLC, will make 60 million gallons of ethanol a year from
21 million bushels of corn.
"We're a Midwest company and rural economic development is something we're
pretty passionate about and are pretty proud of," said James Moe, chief
operating officer of Poet Plant Management. "The ethanol industry has been a
boon to rural small towns and we've helped fuel that a bit."
The Renewable Fuels Association trade group said the nation has more than 110
plants with the capacity to produce 5.6 billion gallons of ethanol annually.
Another 80 plants are under construction, and seven are expanding to add
another 6 billion gallons of capacity.
North Dakota has ethanol plants at Walhalla, Grafton, Richardton and
Underwood, and several others are in the works.
Poet's $80 million plant and its 40 jobs were a huge investment in Jewell, a oncethriving central Iowa community that has lost traffic since the 1967 completion of
Interstate 35 a few miles away.
To those who hope ethanol plants can spur a turnaround for towns like Jewell,
Iowa State University economist David Swenson has sobering news.
"Their problems are bigger than just this and they're much more dynamic and
much more complicated," Swenson said. "To simplify them and to say that
biofuels is going to renovate rural areas--as in all rural areas--is just a big lie."
Before the interstate was built nearby, Jewell boasted eight gas stations and a
half-dozen restaurants. Now there are two restaurants and a few other shops,
including a hardware store and a locally owned grocery. Most in the town of
1,200 work and shop elsewhere.
Jewell's population has grown a bit, something only 345 of Iowa's 950 towns
managed to do in the last five years.
Yet Swenson said even a robust ethanol plant, such as those opening throughout
the Midwest, can't reverse the migration of populations from rural areas to cities.
"It's going to help out those small areas that are host to a plant to a degree and
they may help stabilize a little bit of an economy for the time being," he said. "But
in and of itself, is that the mechanism for restoring or renovating rural vitality?
The easy answer is just, heck no."
Mayor Mickey Walker, an electrician, said Jewell saw a significant boost when
the plant was under construction, as workers bought gas at the local co-op and
ate in town. He said Poet has kept its promise to hire local workers whenever
possible, and it has contributed money to revitalize aging buildings on Main
Street.
Beyond those advantages, economic benefits to Jewell are harder to pinpoint.
"It sure doesn't hurt to have them there, but you may not see some real direct
benefit," Walker said. "It's not like we're going to have other businesses following
them because in small towns, small business is pretty tough. I don't know if there
are any direct things, but overall it has been a good thing for the town."
John Graham, a 74-year-old retired State Patrol officer who has lived in Jewell
since 1959, said area farmers probably will get the biggest boost but that any
new industry will help the community.
"I'm not sure this is the ultimate solution," he said. "You can only move forward or
backward, but you can't stand still."