Report: 2,000 people in east Kansas employed in biofuels

Source: By Megan Hart, The Topeka-Capital Journal • Posted: Friday, April 10, 2015

More than 2,000 people are employed in the biofuel industry in the Congressional district including Topeka, according to a report from Fuels America.

The group is made up of major players in the ethanol industry and advocates for public policies that are friendly to it.

The report, which included state and Congressional district-level data, found 2,078 jobs directly related to the ethanol industry in the Kansas’ Second District, which includes Topeka. Those jobs paid an estimated $158.0 million in wages.

It also pointed to 1,578 supplier jobs in the district and 891 jobs induced through the multiplier effect of direct employees and suppliers spending their wages. Those jobs paid about $121.4 million in wages, for a total estimated economic impact of about $861.0 million.

The study includes economic activity from ethanol refineries, advanced biofuel facilities, gas stations and farmers supplying crops used for biofuels, which still rely predominantly on corn. It also includes estimated spending on inputs used for producing ethanol, employees spending their salaries and taxes on the businesses and their employees.

Statewide, about 5,441 people were estimated to be working in the ethanol industry, earning about $469.0 million in wages. The report also estimated 11,179 induced and supplier jobs, and about $4.1 billion in total economic impact.

The emphasis on Congressional districts and a line at the end of the report calling on readers to “reject legislative changes and regulatory damage to the RFS (renewable fuel standard)” suggest the report is intended to convince readers to put pressure about potential job losses from changing the standard on their representatives.

The renewable fuel standard, which requires a certain amount of biologically based fuel to be blended with the gasoline supply, was passed in 2005, in the midst of public concern about imported oil. The U.S. Environmental Protection Agency has struggled to come up with regulations for biofuels made of something other than corn, however, adding uncertainty to the industry.

Part of the problem is that only 15 billion gallons of the 36 billion gallons of renewable fuels the standard requires to be produced by 2022 can come from corn ethanol, and the standard already is close to that limit, according to the Wall Street Journal. That means the industry has to produce 21 billion gallons of fuel from plant sources other than corn by 2022, but it only produced about 1.9 billion gallons in 2014.

There also is debate about whether the American market can even absorb 36 billion gallons of ethanol, given that most cars still run on a mix of no more than 10 percent ethanol. Price pressures also run both ways, since fuel containing ethanol tends to be cheaper than entirely oil-based gasoline, but the increased demand for corn can raise prices for corn products and corn-fed meat. At the moment, however, both corn and gasoline are cheaper than they have been in years.

The report estimated about $184.5 billion in economic activity from biofuels nationwide and about 292,166 people were employed in it directly, earning about $14.6 billion in wages. It also estimated about 333,792 supplier jobs and 226,098 jobs induced through the multiplier effect.