Lasting impact

South Dakota continues to see the effects of Poet and the ethanol industry

BY MARNIE LAHTINEN

Groups of people take a tour of the Poet Biorefining plant as part of Poet’s Ethanol Day Aug. 13 near Loomis. As part of Poet’s Ethanol Day they released the results of an economic impact study conducted in June and July and the contributions made by Poet into the South Dakota economy.

PHOTO: MATT GADE/ FORUM NEWS SERVICE

South Dakota-based biofuels company Poet, a world leader in ethanol production, recently released its first economic impact study outlining contributions the organization made toward national economic growth and job creation for the year 2014. The report was prepared by ABF Economics and examined direct, indirect and induced economic activities generated by Poet’s 27 production facilities in the seven states where it conducts business.

ABF analysts followed an economic model called IMPLAN (Impact Analysis for

Planning) to create a model of the United States economy and each state economy focusing on the sectors that support the ethanol industry, the links between them and the level of economic activity. Analysts used the information to quantify the economic impact of Poet’s operations in three main sectors: ethanol production, agriculture/corn growth and biofuels research and development. Their findings described Poet’s impact on improving economic prosperity, reducing dependence on foreign oil and offsetting greenhouse gases.

The report breaks out contributions by Poet to South Dakota, Iowa, Minnesota, Indiana, Missouri, Ohio and Michigan. Contributions are measured in each state in terms of gross output, gross domestic product, employment and household earnings. The analysis states that Poet’s ethanol production activities contribute nearly $5.4 billion to national GDP, support an estimated 39,978 full-time jobs and contribute $3.1 billion in income for American families.

“Ethanol … lowers costs at the pump and offsets our need for foreign oil,” says Matt Merritt, director of public relations for Poet. “These factors … mean there is more money circulating in American communities, which in turn generate more jobs, income, taxes, etc.”

South Dakota, in particular, benefits from Poet’s operations. The company spends $498 million on corn raised there and supports nearly 2,781 jobs in the state. Sioux Falls is home to corporate headquarters and it, along with six ethanol plants around the state, employs nearly 700 team members. “South Dakota is unique in that it benefits from the economic impact not only of Poet’s six ethanol plants, but of the research and development, engineering, plant management and other activities generated from our corporate headquarters, as well,” says Merritt.

According to the economic impact study, Poet’s combined ethanol and administrative operations generate $182 million of income for South Dakotans. This total income is calculated by measuring income to owners of locally-owned plants and the share of income generated by plants in other states reflected by Poet’s equity stake. ABF analysts estimate that Poet’s economic activity supports more than 1,450 indirect and induced jobs in other industries in the state and contributes to an indirect GDP totaling $211 million, consisting of value-added output created by non-agricultural industries like natural gas suppliers, and induced GDP amounts of $47 million.

State officials recognize these benefits. “Our ethanol industry supports … the farm economy by offering pro- ducers a market for their crops; it also supports good paying jobs and significant capital investment in many of our communities,” says South Dakota Deputy Commissioner of the Governor’s Office of Economic Development Aaron Scheibe. “South Dakota is a national leader in ethanol production, and the state, through programs like the Ethanol Infrastructure Incentive Fund, is promoting the use of renewable fuels at the pump as an example for other markets to follow.” PB

Marnie Lahtinen Contributing writer marnielahtinen@gmail.com