By DOUG SCHMITZ
Iowa Correspondent

URBANDALE, Iowa — According to a USDA study, every 200 million gallons of biodiesel demand increases the price of soybeans by 17 cents a bushel.

The Iowa Soybean Assoc. (ISA) and Iowa soybean farmers have long supported the biodiesel industry in their state, as well as nationally. Since 1992, ISA and other state and national checkoff programs have invested more than $50 million in biodiesel research and promotion.

“Iowa is the leading biodiesel-producing state in the nation,” said Grant Kimberley, ISA director of market development. “In 1998, the United States produced only 500,000 gallons annually. We have progressed a long way in a short time.”

As the nation’s leader in renewable fuels production, Iowa currently has 13 biodiesel refineries with a combined annual capacity of nearly 230 million gallons in operation, and three biodiesel refineries under construction that will add 95 million gallons of capacity.

Iowa has 28 ethanol refineries with the capacity to produce more than 1.9 billion gallons annually, with additional renewable fuels projects under development.

The Iowa Renewable Fuels Assoc. (IRFA) stated Iowa’s biodiesel refineries produced a record 60 million gallons in 2006, a 240 percent increase over the 25 million gallons produced in 2005.
In producing the record amount of biodiesel, IRFA Executive Director Monte Shaw said Iowa’s refineries processed the oil from more than 40 million bushels of soybeans.

“Biodiesel production and demand is growing exponentially, and Iowa is leading the way,” he said, back in December 2006. “Consider that last year the entire country produced only 75 million gallons of biodiesel and this year, U.S. biodiesel production is estimated between 200 and 250 million gallons.

“Iowa farmers and entrepreneurs are leading the way – in production and quality,” he said. “Iowa will produce roughly 25 to 30 percent of total U.S. biodiesel in 2006.”

According to the USDA Rural Development’s Iowa office in Des Moines, since 2005 more than 150 renewable energy and energy efficiency projects in Iowa have received $33.4 million in guaranteed loans or grants from the state office’s Renewable Energy Systems and Energy Efficiency Improvements Program, which was created as a part of the 2002 farm bill.

Since 2001, USDA Rural Development has provided guaranteed loans and grants to nearly 30 ethanol and biodiesel facilities, Iowa Director Mark Reisinger said. “Probably nowhere else in Iowa, or maybe even the country, can you stand in a field, turn in a circle and observe so many companies and industries focused on renewable energy,” he said.

In February, IRFA released a new study detailing the dramatic impact the growing renewable fuels industry has had on Iowa’s economy. Titled Contribution of the Biofuels Industry to the Economy of Iowa, the study indicated that biodiesel and ethanol production and construction of new biorefineries is a major force in driving Iowa’s economy forward, especially in rural communities.

“There is simply no doubt that biodiesel and ethanol production are powering Iowa’s economy,” Shaw said. “But what’s even more exciting is that the renewable fuels industry will double in Iowa over the next (12) months – and these benefits will double along with it.
“The development of the biofuels industry is one of the most significant success stories in American manufacturing over the past quarter-century and Iowa continues to lead the industry,” wrote John Urbanchuk, a director with LECG, LLC in Berkeley, Calif.

The report added the size of Iowa’s biofuel industry by the end of 2006 added $8.2 billion to the state’s Gross Domestic Product, generated $1.8 billion of income for Iowa households, supported the creation of more than 53,000 jobs throughout Iowa’s entire economy and generated nearly $390 million in state tax revenue.

“Iowa leads the nation in biofuels output, accounting for 32 percent of U.S. ethanol and 20 percent of biodiesel production capacity,” Urbanchuk concluded. “Biofuels make a significant contribution to the Iowa economy, expanding the economic base, generating income, supporting the creation of new jobs and generating tax revenue.”

In fact, Shaw said Iowa could triple its annual biodiesel production capacity by the end of this year.

“Iowa is poised to extend its lead in biodiesel production,” he said. “Iowans are taking full advantage of the economic possibilities biodiesel production represents.

“In fact, demand is so strong that the real challenge isn’t finding new markets, but rather ensuring cost-effective biodiesel production.”