Associated Press
05-29-07
Towns bank on plants
Rural areas pin hopes on ethanol boom, but full turnaround unlikely
By David Pitt
Associated Press
Editor's note: This is Part 4 of an Associated Press series on ethanol, whose
fortunes as a gasoline additive have risen and fallen with the price of oil and are
now in the middle of a boom. Biofuel plants are sprouting up across the Midwest
and corn farmers are rushing to cash in. But this agriculture gold rush carries
many questions, not the least of which centers on demand. The Associated
Press examines the promise and pitfalls of ethanol.
Sitting around a table at Grandma June's cafe, the white-haired ladies can look
out the storefront window and watch the trucks rumble through town to and from
the new ethanol plant.
``It sure has changed the town,'' said Bea Imlay, who operated 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, which 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.
In Jewell, an hour's drive north of Des Moines, many are optimistic about the
effects of the Horizon Ethanol plant, built a year ago by Poet LLC of Sioux Falls,
S.D. It's expected to contribute up to $300 million a year to the local economy.
``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.
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.''
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 can't reverse the migration of population 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's not like we're going to have other businesses following them because in
small towns, small business is pretty tough,'' he said. ``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 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.''