By The Gazette Editorial Board
Is Iowa’s renewable-energy boom busted?
We don’t think so.
Yes, the remarkable growth of Iowa’s wind power and corn-based ethanol and soybean-based biodiesel industries has stalled and even receded this year. Political, market and even weather conditions have thrown punches, leading to production cutbacks and job layoffs.
But adversity hasn’t landed a haymaker. And we think Iowa is still well positioned to expand renewable energy production and its economic impact into the next decade and beyond.
Iowa’s biofuels production soared by more than 700 percent from 2000 to 2011. Iowa leads the nation at 26 percent of U.S. ethanol and 12 percent of biodiesel production capacity, and the industry supports about 83,000 jobs in our state. The still-young wind energy industry already ranks second in the nation, providing more than one-fifth of all our state’s electricity generation.
However, biofuel production has slid as record prices for the primary raw material, corn and soybeans, zapped profits this year and the recession’s lingering effects diminished demand.
Wind power’s main adversity has been the failure of Congress to extend the production tax credit, which the industry says is still needed and is expected to expire at the end of the year — the third time that’s happened since its creation in 1992, always accompanied by layoffs and production dips. That credit also has been available for solar and geothermal energy production.
Nonetheless, optimism about the future of renewable fuels in Iowa isn’t scarce — Iowa’s economic development chief, Debi Durham, as well as officials in the Iowa Renewable Energy Association and Iowa Wind Energy Association, told The Gazette they see multiple opportunities for renewed growth in the next decade:
l Improved ethanol plant and wind turbine technology, already here or on the horizon, will be more competitive with fossil fuels, especially with oil prices remaining strong through the recession.
l The emerging cellulosic ethanol industry, with plants expected to open in Nevada, Emmetsburg and Blairstown — instead of grain, this technology uses less costly materials such as corn stover and garbage.
l Both major presidential campaigns are supportive of ethanol and the federal Renewable Fuel Standard. which mandates a base volume of biofuels be blended with gasoline and diesel.
l The 15 percent ethanol blend (E15) recently was approved for the mass market.
l The new federal fuel standards that require higher octane fuels favor the use of more ethanol, which provides higher octane levels.
l National security goals include energy independence from foreign oil sources, and biofuels are seen by many political leaders as vital to that strategy.
l Plans for two new transmission lines across Iowa to carry wind power to big metro markets outside the state and untapped market potential for smaller turbines for individual businesses and institutions offer promise for wind energy.
Then there’s an interesting new report by the Union of Concerned Scientists, a coalition of scientists, business people and educators that advocates for policies that encourage a healthy environment and responsible business practices.
The UCS analysis, based largely on joint U.S. Department of Energy and Department of Agriculture research, shows that developing the nation’s biomass capacity could produce enough cellulosic biofuels to replace 25 percent or more of the nation’s current petroleum consumption, or one-fifth of electricity needs by 2030 — provided there is adequate biorefinery capacity and technology improvements, and efficient systems for collecting delivering the biomass materials are developed.
The biomass referenced includes energy crops such as switch grass and miscanthus (tall grasses), agricultural residues such as corn stover (stalks and leaves), and waste such as household garbage and ag manure. And guess what: Iowa’s biomass capacity in this report is rated as No. 5 overall compared to other states, including first in ag residues and fifth in manure.
Iowa ranks only 33rd in energy crop potential because, according to the report’s author, Jeremy Martin, our state has so much valuable farm land for grain crops. Using it to grow switch grass isn’t financially attractive to farmers. Even so, if cellulosic biofuel plants become more common in Iowa and create a stronger market for energy crops, more farmers may be interested in using some of their marginal land to grow such grasses, which also are valuable for erosion control and other environmental benefits over grain crops.
Food vs. fuel
Martin told us the scientist group also recommends a “balanced” development of non-grain biomass capacity so that dependency on fossil fuels isn’t simply replaced by excessive pressure on price and supply in the nation’s food system — concerns exacerbated by this summer’s widespread drought.
Or, as he put it: “The scale of the biomass resources available to us … shows that we can produce biofuels in a way that doesn’t pit the fuel we put in our cars against the food we consume. Biomass gives our nation the opportunity it needs to create a long and sustainable future for biofuels.”
It’s clear that Iowa still has opportunities to further develop and produce renewable energy. It’s an important part of our future energy mix. How we get it done will test our state’s collective leadership and our resolve and ability to innovate.
Yes, there’s risk. Federal policies and markets are hard to predict. Production tax credits and other public incentives for investment, if reliably available over a realistic time period — but not unending — could accelerate development that provides long-term public benefits.
Meantime, Iowa is already ahead of the curve. This is no time to give up on renewable energy and the infrastructure we’ve built.
Instead, it’s time to modify and adapt. Recognize the potential beyond the current challenges. Improving Iowa’s position as a national leader in creative, responsible expansion of renewable energy will provide more job opportunities for our children and brighten our state’s economic future.
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