Radio Iowa
09-05-06
I-S-U professor says alternative-energy projections too optimistic
by Stella Shaffer
Iowa has 27 ethanol plants in operation and another two-dozen in the planning
stages or under construction. We lead the nation in production of the alcohol fuel,
but one Iowa State University economist says projections about riding the
alternative-energy boom are too optimistic.
David Swenson, a lecturer in economics and regional planning, says he's
not a pessimist -- he's battling for "economic realism." Swenson says he's not
passing judgment on the technology or adding the right amount of "new energy"
to the process. He says proponents are making claims of benefits to rural areas
and ethanol-producing states that are not substantiated. He says we need better
measurement of the anticipated economic impact, and an honest acceptance of
the fact that bio-energy has up- and downsides.
"Who's benefiting, by how much, and what are the consequences of those
changes in our economy?" Swenson says if he counted only his deposits, he'd
be a millionaire in time, but you also have to count the withdrawals. By the same
token, he says some of the projections about modern bio-fuel energy projection
are too good to be true. He says each plant will produce somewhere around 35
good-paying jobs, and the demand for corn will keep the price high -- all true, and
good news.
Iowa leads the nation in swine production, and thanks to egg-laying businesses
we lead the nation in poultry. Swenson says pigs and chickens eat corn, but they
don't like to eat the byproduct of ethanol plants' corn processing, distillers grain.
So there's a higher cost to livestock producers and not the perfect win-win
scenario painted by some proponents.
Swenson says ethanol and other bio-fuels are here to stay, though not
necessarily in the form we're seeing them right now. He says we'll see
tremendous transformations in how we use products grown or raised here,
adding "Currently Iowa is Corn Ground Zero for ethanol."
Swenson says there's nothing wrong with that, but he's analyzed reports that
paint overly optimistic claims for the economic impact of the industry. He says
public policy decisions have to be based on more accurate economic numbers.