When President Bush signed legislation in August 2005 creating the Renewable Fuel Standard (RFS), the price of corn per bushel was $1.84. Today, after this critical policy has been in place for nearly 18 years, the price of corn per bushel has increased to $6.70 or a total increase of 264%. (source) By creating common sense requirements for the blending of renewable fuels into our gasoline, the Renewable Fuel Standard helped jump start the ethanol industry and resulted in substantial increases in commodity prices and land values. Today, the ethanol industry in Iowa supports 50,000 jobs, contributes $6 billion to our GDP annually, and delivers more than $3 billion in household earnings every year. Simply put, the RFS has been an incredibly positive driver of our ag economy.
Despite these successes, there are no guarantees the ethanol industry will remain competitive in the years to come unless we are willing to make the necessary investments. That’s why I support the carbon capture, transportation, and storage projects that have been proposed here in the Midwest. The Iowa Renewable Fuels Association recently studied the impact of these infrastructure projects. They found that without carbon capture projects, Iowa’s ethanol industry will lose $10 billion annually (source) and farm income would drop $43,000 for a typical 1,000-acre farm with production evenly split between corn and soybeans. (source) For me, that is an unacceptable outcome.
People are also reading…
While I recognize that Iowans have differing opinions on policies aimed at improving environmental outcomes, the economic opportunity associated with carbon capture projects is undeniable. These investments will capture carbon dioxide from ethanol plants before it’s emitted into the atmosphere, creating a more than 30-point reduction in the carbon intensity score of ethanol production. That shift will allow ethanol producers to sell their product at a premium in the growing number of states and countries that have adopted low carbon fuel standards. In the coming years, the ability to access these markets will determine whether or not an ethanol plant is able to keep its doors open and continue to serve as a strong end market for corn growers. Within our community in north central Iowa, imagine the impact of Golden Grain Energy, Corn LP, Homeland Energy, or others in the community – who are all part of Summit Carbon Solutions’ project – shutting down operations. Again, that’s not an outcome I am willing to accept.
And it seems that landowners are responding favorably. Today, landowners have signed easement agreements accounting for 82% of Summit’s proposed route in Cerro Gordo County, 84% in Floyd County, and 92% in Chickasaw County. Yes, there are individuals and organizations opposing these projects and I respect their position. However, the overwhelming number of people actually on the route are supporting these investments and want to see them move forward.