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Lettertothegovernor

Dear Governor Culver,

It is my understanding that the Interstate Power and Light Company proposed the construction of two coal power plants in Marshalltown and Waterloo, Iowa. As a resident Iowan, I believe that it is my responsibility to express my concern regarding this potential construction.

In their application, the Interstate Power and Light Company speculates that over the next few years, current power plants will fail to meet the energy demands of existing and planned ethanol and biodiesel plants. However, according to Neil Harl’s economic analysis at Iowa State, additional power plants will be unnecessary given the current state of ethanol production.

As the ethanol industry experienced great success, demand increased, and producers raced to meet production needs. More people entered the industry, creating a greater demand for more ethanol plants. Due to a steep increase in demand, the cost to construct these power houses also rose. As more ethanol was produced, manufacturers generated an increase in demand for inputs, and consequently, the price of corn rose from $2/bushel to $4/bushel. Unfortunately, supply quickly overwhelmed demand, and overproduction caused the price of ethanol to drop from around $2.50/gallon a few years ago to about $1.50/gallon today. Therefore, additional ethanol plants are unnecessary; they will not survive in today’s stilted market. As a result, additional power plants will also be unnecessary.

Although I believe that energy demands will not exceed supply in the near future, if we are indeed confronted with greater energy needs, we must go about producing energy alternatives rather than turning to coal energy. Coal energy has massive cost externalities in the form of environmental and health costs. A more accurate cost benefit analysis can only take place with the inclusion of these externalities. We must consider the cost to society rather than simply making a decision based on costs to the generating firm.

Furthermore, at our fingertips we have rich energy alternatives including wind and solar energy. Iowa is the 10th largest producer of wind in the nation, and we would be foolish to not take hold of this opportunity. Solar energy is an abundant, dependable resource that is largely untapped at this point. Why would we poison and impoverish our soils, air, and water before making use of these valuable alternatives?

I hope that you will fight against the construction of coal plants in Iowa while promoting a safer, healthier environment for all to enjoy.

Best,

    Meredith Groves 

Neil E. Harl Ethanol- where is it headed? Ag Lender. November 2007.