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Wisconsin Ag News Headlines
Past UWP Professor Shares Findings on Biofuel Impact
Wisconsin Ag Connection - 10/16/2009

John Simonson, professor emeritus at the University of Wisconsin-Platteville, has conducted research on the impact of biofuels and found that biofuels' impact is sizable but the recession is devastating.

"The biofuels industry has a sizeable impact on Wisconsin's economy, despite fluctuating petroleum prices and global recession, according to a study by University of Wisconsin-Platteville's Center for Applied Public Policy," said Simonson.

Biofuels include ethanol, produced from corn, and biodiesel, produced largely from soybeans. Simonson said the study found that the recession that began in 2008 had 'devastating effects' on the state's biofuels industry, especially biodiesel production. Some facilities have cut production by as much as half; others have filed for Chapter 11 reorganization or ceased operations entirely.

In 2008, nine ethanol facilities operating in Wisconsin produced an estimated $1.2 billion worth of ethanol, distilled grains, carbon dioxide, syrup and other by-products. Some $824 million of that was paid to corn growers and $22 million to employees, and $2.4 million was paid in local property taxes. The impact is most pronounced in localities in which the facilities are located. When its indirect impact is included, ethanol production accounted for over $2 billion and nearly 1,700 jobs in Wisconsin's economy in 2008.

Data for biodiesel facilities are limited, the report said, but if the seven biodiesel plants had operated at full 51 million gallon capacity and sold their output for $4.43 per gallon, they would have contributed some $226 million to the state's economy in 2008.

Simonson said that the report noted that 2008 was a transition year for the biofuels industry. The economic impact estimates "are not as high as they would have been had the study been completed a year earlier and probably not as low as if production and price data for 2009 had been used." It said that the study is "only a snapshot" and does not portend the future with any degree of confidence.

As in the past, the future of Wisconsin's biofuels industry depends primarily on the price of petroleum-based fuels with which biofuels must compete.


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