A Key Observation about the “Ethanol Boom”

A piece in the Des Moines Register , written by Anne Fitzgerald called:

Ethanol growth helps spur jobs in wide array of fields

really sparked my interest since I’ve read conflicting reports about ethanol’s ability to create jobs.  In fact, I’ve heard that it only takes about 13 people to run a $100 million gallon ethanol plant.  Instead of lauding that "efficiency", most have decried ethanol’s inability to create "more jobs".  This piece however highlights the diverse background of people that a particular plant in Nevada, Iowa employs.  (In Iowa, it’s a long A vs. sin city’s home state). 

Here’s a quote:
Economists disagree on the ripple effects of an ethanol plant. John
Urbanchuk, an economist at LECG Corp., a California-based consultant,
says a 100 million-gallon ethanol plant can generate nearly 1,600 jobs
across several industries.

This is a very accurate assessment in my opinion.  When you extend the reach of an ethanol plant, you really do touch on a multitude of industry segments, science disciplines, and technologies.

The key piece in the article, and the one that I’m most focused on is the following:

"Call any trucking firm in Iowa and see if they’re hiring truck
drivers, and the answer will be, ‘Yes.’ There are a lot of reasons for
that, but the biofuels industry is a big part of it."

Each day,
thousands of semi-trailer trucks deliver grain and other products to
the plants, while tanker trucks and railcars haul fuel to market.


BINGO!!!!  The million dollar observation.  The key component in the ethanol business right now and for the foreseeable XX years is transportation.  This is about the first article I’ve read that touched on this point.

Getting the supplies in, the by-products and production out are a massive part of the equation.  If someone were to give production facilities the edge in this aspect of their business with a technology platform that reduced transport expense and created the kind of logistics infrastructure that automated much of the process and paperwork around it…I think that would be rather valuable….and fundable…and "growable" into "The logistics platform for the segment". 



2 thoughts on “A Key Observation about the “Ethanol Boom””

  1. The plant may create jobs, JM Keynes the economist, once facetiously suggested that employing people to dig mines and have other fill them up created jobs. It is easy to create jobs but are they sustainable? What markets is the grain that is being used for the ethanol plant being diverted from? What is the energy balance of the plant. What about the water that is needed to grow the grain, does it all fall out of the sky or does it come from underground aquifers that Iowans and others use as drinking water? Who has first call on that resource? If we can answer some of those questions, then we’ve got a better idea about whether it really is worth while.
    Lets exchange links.

  2. Jobs sustainability and biofuels

    Apparently a 100 000 gallon/year bioethanol plant may create 1600 jobs, according to sources quoted by Doug on his Moments of Clarity blog. And certainly the plant he talks about in Iowa does seem to Doug quotes the Des Moines…

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