LANSING – Michigan would stand to lose jobs and money if the federal government eliminates the renewable fuel standard, officials said at a media event Monday.
The state currently has five ethanol plants, and at least three of those would close if the current requirement for ethanol content in motor fuel was eliminated, said Bill Knudson, a product marketing economist at Michigan State University.
Knudson’s study showed the fuel standard represents 288 jobs and $433 million in economic activity in the state, all of which would be lost if the standard was repealed.
Jim Zook, executive director of the Michigan Corn Growers Association, said the standard is currently under review in Congress and there is some push to repeal it.
“This standard has been a success both for Michigan and across the country,” Zook said.
In addition to driving up corn prices ($260.5 million of the lost economic activity would be declines in corn prices), the ethanol requirement reduces fuel costs by $1.09 a gallon nationally without federal subsidies, Zook said.
Knudson said most of the land currently in production for corn used in ethanol would likely remain in food production, but prices for that produce would likely come down.
“Less profitable farmers buy fewer F250s,” he said.
Zook said the higher corn prices do not mean higher food prices because the byproducts of ethanol production still go to animal feed, where the corn used in ethanol would otherwise go.
Kevin Stowell, chief of the Woodland Fire Department, said his area has seen not only revenue increases from land and crop prices rising, but has also seen direct contributions from the Carbon Green ethanol plant.
“When we make our own fuel, we reap the economic benefits,” he said.
This story was provided by Gongwer News Service. To subscribe, click on Gongwer.Com
