Will
biodiesel mean big bucks?
Published
Thursday, August 10, 2006
By
Gina Duwe
Gazette Staff
EVANSVILLE-Economic
impacts from an Evansville biodiesel production facility
would be "pretty spectacular," one analyst says.
Although
there's been no official announcement, it's becoming increasingly
clear that Evansville is on the short list for both a
biodiesel fuel production facility and a soybean crushing
operation.
"These
don't come a long very often," said Bud Gayhart,
director of the Small Business Development Center at UW-Whitewater.
"A lot of communities would look at this as a diamond-something
to be pursued. I think Evansville has done an outstanding
job to welcome this group to the community."
North
Prairie Productions is negotiating with Landmark Services
Cooperative to build a $42 million biodiesel plant on
County M on the city's east side. An announcement is expected
in the coming weeks.
Bud Gayhart
"That's pretty significant," Gayhart said. "This
is huge for any community, and for one the size of Evansville,
it'll be pretty spectacular stuff."
The
plant is estimated to pump $127.5 million in annual revenue
to the area.
That's
based on a software program the UW Extension recently
developed to identify the economic impacts biofuel businesses
have on an area, said Gayhart, who has run the data for
the Evansville plant.
"Nothing
could be more targeted than that," he said of the
software.
Revenue
The plant will be able to produce 45 million gallons of
biodiesel annually. Selling at $2.60 a gallon, direct
revenue results in $117 million.
The
selling price per gallon is a conservative estimate, Gayhart
said.
"If
anything, it'll move up," he said.
Indirect
revenue from places such as trucking firms and railroads
could hit $4.7 million each year, based on the software
simulation, he said.
The
induced impact of the plant is expected to generate an
additional $5.9 million, he said.
"This
is going to be a huge direct impact on Evansville, but
it'll certainly have an impact on the entire geographic
region," he said.
Employment
North Prairie Productions will employee about 25 people
at its facility.
Based
on the software simulation, the plant will indirectly
generate 28 new jobs. Induced activity from plant will
add 50 more jobs.
That's
103 projected new jobs.
City
leaders hope the new development will help Evansville's
"bedroomville" syndrome of residents commuting
to Madison, Janesville and other cities for employment.
Evansville
has been the fastest-growing city in Rock County, increasing
by 14.36 percent from 2000 to 2005.
The
plant would help balance that recent residential boom,
Gayhart said, but also draw and create jobs from the Janesville
and Madison areas and surrounding communities.
"Evansville's
impact will be greater and deeper, but the benefits certainly
will be directly felt in other surrounding communities,"
he said.
Salary
and wages
Creating 103 new jobs adds up to a $7.3 million impact
the area in salary and wages, according to the software
simulation.
The
25 direct jobs are expected to average a $50,000 annual
income, leaving a $1.25 million impact in salary and wages.
The
28 indirect jobs would amount to $2.6 million in salary
and wages.
The
50 induced jobs would add $3.5 million in salary and wages.
"We
want more people who live here to work here," Bill
Connors said before he left the city as its administrator.
When
people live and work in the same city, there's a greater
chance they will spend more money in that community, he
said.
Crushing
facility
All of the economic impact numbers would "go up dramatically"
if a soybean crushing facility is built next to the biodiesel
plant, Gayhart said.
The
software analysis took into consideration there was no
crush facility, Gayhart said.
"Yet
these numbers are rather significant," he said. "If
indeed we did have a crush facility, it would have a definite
positive impact on all these numbers here."
It
would be "highly speculative" to determine a
crush facility's impact, he said. But since there is no
crush facility in Wisconsin, it would have "much
more of a direct impact on the economic numbers in Wisconsin,"
he said.
Wisconsin
soybeans would not have to be transported out of state
and meal would not have to be imported when a crush facility
is built.
Copyright
©2006 Bliss Communications Inc. All rights reserved.
Reprinted here with permission.
