Guest Column: South Dakota will play a leading role in energy

South Dakota will play a leading role in energy
by Ron Alverson, Wentworth, SD
The Russian invasion of the Ukraine has driven gas prices to record highs. The steep cost of filling the gas tank has forced many Americans to reconsider summer vacation plans, new car purchases, and family budgets. As more and more Americans consider ways to save money at the pump, conversations regarding ethanol and other biofuels have increased.
The ethanol industry has long been a driver of the South Dakota economy. Half of the state’s corn is consumed by the biofuels sector, making it critical to the health and success of the state’s agricultural community. Nationwide, the ethanol industry supports 360,000 jobs and contributes more than $45 billion to the annual GDP. Farmers benefit handsomely from this sector because it consumes 40 percent of corn produced nationwide and provides a $14 billion boost to grain markets.
Despite the recent spike in demand for oil and biofuels, the ethanol industry has had its fair share of setbacks the last couple of years. Small refinery waivers placed ethanol producers at a steep disadvantage in fuel markets. Then in early 2020, Saudi Arabia and Russia entered into a crude oil price war that took a severe toll on ethanol plant profitability. Soon thereafter, ethanol producers took another hit with the onset of the COVID 19 pandemic. Between the start of 2020 and February 2021, ethanol production dropped by two billion gallons. According to Farm Bureau Federation Chief Economist John Newton, this amounted to 700 million bushels of corn that was not used for ethanol production. Corn is one of the top four highest valued commodities in South Dakota’s $8.8 billion agricultural cash receipts. As such, any disruption to demand can create significant setbacks to the state economy. This underscores the importance of taking advantage of new domestic ethanol markets.
Although ethanol is a clean burning fuel, carbon dioxide emissions are a byproduct of the production process. Fortunately, modern carbon capture and storage technologies have made it possible to produce a net-zero-carbon fuel by 2030. This has significant economic ramifications, as implementation of new technologies will allow ethanol facilities to compete in low-carbon fuel markets across the country.
South Dakota will play a leading role in improving the competitive outlook for the American ethanol industry. Ethanol plants in South Dakota, North Dakota, Nebraska, Iowa, and Minnesota have partnered with Summit Carbon Solutions to develop a $3.7 billion storage project. When completed, it will capture carbon dioxide emissions from refineries, compress them, then channel them to North Dakota where they will be permanently and safely stored in geological formations deep underground. Once the project is finished, it will be capable of capturing and storing 12 million tons of carbon dioxide annually.
The ethanol industry is integral to the long-term health of the South Dakota economy. The Summit Carbon Solutions project will help secure prosperity in the state by generating jobs and supporting the agricultural sector. Furthermore, the project will serve as an important investment in the future because it will make ethanol producers more competitive in national and international markets.
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Ron Alverson has a 40 year farming career in East Central South Dakota…..now retired but still active on the family farm. Founding member (1987) and past president of the South Dakota Corn Grower’s Association, and past Board member of the National Corn Grower’s Association. Also a founder and current Board Member of Lake Area Corn Processors LLC (Dakota Ethanol), a 90 million gallon per year ethanol production plant at Wentworth, SD. Currently serves as Treasurer of the American Coalition for Ethanol’s Board of Directors and works to improve current GHG emission accounting for corn and ethanol production. Past honors include South Dakota State University “Distinguished Alumni” and Renewable Fuels Association “Industry” award. BS degree in Agronomy/Soil Science from SDSU.
Currently, participating in a group that is exploring the potential enactment of a Mid-West based Low Carbon Fuel Standard.










