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

@SoDakCampaigns

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.

12 thoughts on “Guest Column: South Dakota will play a leading role in energy”

  1. He mentioned only ethanol. The dams have always played a strong energy role. The increasing number and size of wind farms are another way South Dakota plays a part in energy.

    1. Speaking of energy and dams: Lewis and Clark Lake was planned to be obselete. As the Niobrara continues to dump tons of silt into the lake, does this threaten the energy from the dam? Is it worth money to keep it going?

  3. If energy is this important, and almost “too big to fail” we need to consider a plan to let the government run the oil industry. We keep trying to force the private industry model onto industries like healthcare, and it doesn’t work. I know they give you “lawmakers” a lot of money to keep these broken systems in place, but at some point in future generations, function will take precedent over a few “donations” and these obsolete industries will go away without government “legislators” protecting them.

  4. Dumb propaganda. Ethanol sucks, corn sucks, government subsidies for farming sucks, CO2 pipelines suck. How about growing food to eat and generate energy with this wind we’re so familiar with.

  5. Wow. A lot of hate going on here from people who probably take for granted the energy that is so readily available in America

    2. Lee, do you want to come take a look at our wells that are sitting idle while the lease holders are turning record profits? I bet you think it is Biden causing this too, huh.

  6. the (mis)perception that our country would be just fine, maybe better, if ethanol had never been thought of has been perpetuated by petroleum industry lobbyists (primarily API) for decades…using the same “misinformation” they first concocted because it caught a nerve and resonated, causing an emotional belief in many people without having to be proven. (back then tuning problems…a “carb job” or replacing a fuel filter was expected, not rare…so why not blame the hard to pronounce stuff in the tank rather than poor maintenance or cheap components?) The petroleum lobbyists were also smart enough to demonize ethanol soup to nuts, using multiple existing troubles but then blaming all those on the new stuff, so even if one talking point is proven false the lobbyist could fall back on the other dozen half to untruths to blame. I resigned a position in a national level lobbying organization because I “proved” their talking points were absolutely false about ethanol…got a “so what?”. Turned out the organization’s president was an “oil man”. They are still using the same talking points today that I proved false.

    Some of the commenters here repeated those same talking points. It IS hate, not science.

    If priced fairly Ethanol can be a competitive portion of our fuel mix…sourced from within the US. If it is not priced fairly I dont buy it either.

    To my knowledge ethanol subsidies have went away (other than the overall FSA program, but that is comparing apples to oranges), so ethanol isnt directly costing taxpayers anymore (The RINs are not a tax paid by you, but an incentive for oil to include ethanol in their mix)…if you look at ALL the tax codes I dont think the petroleum industry can make the same claim. There is not enough hydropower, solar, or wind to replace liquid fuels used in transportation at the rate we use them today…and mass transportation effectively no longer exists in South Dakota. Maybe there is a better way coming, but it is not an overnight solution.

    I worry about what my farm would rely on for income if corn becomes unprofitable because it no longer is used for ethanol and distillers…then what will government do? (no, field corn is not human food) Yes, I do remember the few hogs, cattle, and diversified crops we used to raise, but those markets have disapeared and the infrastructure torn down for almost all of those options…restoring that wont be cheap either. To those who think SD doesn’t needs corn farmers…well, I hope we never test that one.

    My response to the “haters” is this…If you dont want to burn ethanol , don’t….but its foolish for YOU to prevent ME from doing so. The RFS law in place mandates at least one hose at every gas station dispensing ethanol fuels must contain 10% or less ethanol (you have a choice). that is labeled “unleaded, 87 octane”) . That fuel is okayed for use in all vehicles, and exists because the EPA allows it. If you can make your vehicle move down the road using other stuff more power to you. If you dont want to burn ethanol, you dont have to. IF I DO burn ethanol it does not hurt “you” plus it removes “my” demand from your chosen fuel…we both benefit.

  8. Must have forgotten about the Soybean Processing Plants in SD that are contributing to Biodiesel. Just saying.

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