(April 7, 2010)  Washington – Ethanol production is an unparalleled economic engine in hundreds of small communities all across America. But tens of thousands of the jobs ethanol helps support are in peril if Congress fails to extend key tax incentives for the use and production of ethanol, many in non-traditional ethanol producing states like California, Texas, Georgia, Colorado, and Tennessee.

According to additional research by economist John Urbanchuk, Midwestern states would be hit the hardest. However, thousands of jobs would be at stake in the West, the South, the Great Plains and the Northeast. The state by state breakdown of potential job loss resulting from a failure to extend the Volumetric Ethanol Excise Tax Credit (VEETC) and the offsetting secondary tariff on imported ethanol adds a new layer of analysis to a report Urbanchuk completed in March. In that study , he calculated a loss of 112,000 jobs nationwide and a 38% reduction in U.S ethanol production capacity if these tax incentives were allowed to expire.

“America’s ethanol industry is helping create jobs and provide economic opportunity in states all across the nation,” noted Bob Dinneen, President of the Renewable Fuels Association which sponsored the report. “Representing nearly 10 percent of the nation’s fuel supply, ethanol is an essential part of our energy mix and critical to sustainable, enduring economic opportunity. A failure by Congress to extend the expiring tax incentives underpinning the continued growth and evolution of this domestic industry would result in disastrous consequences and thousands of Americans finding themselves in the unemployment line.”

According to the report, “These jobs include those directly involved in ethanol production as well as all other jobs supported by the impact of the dollars spent by ethanol producers as they circulate throughout all sectors of the economy. The job losses will be most significant in states with the largest ethanol production. [As shown in the report ] six states – Iowa, Illinois, Nebraska, Minnesota, South Dakota, and Indiana – will suffer the largest number of jobs lost if the VEETC is allowed to expire.”

According to the report, the 10 states seeing the greatest potential job loss include:

IA         -29,039 jobs
IL         -13,854 jobs
NE       -13,757 jobs
MN       -10,528 jobs
SD       -8,412 jobs
IN         -6,738 jobs
WI        -4,838 jobs
KS       -4,344 jobs
OH      -3,443 jobs
TX       -2,935 jobs

In late March, Representatives Earl Pomeroy (D-ND), John Shimkus (R-IL) and a bipartisan group of 28 other lawmakers introduced the Renewable Fuels Reinvestment Act (HR 4940). This legislation would extend four critical tax incentives, including VEETC, through 2015. The RFA strongly supports this legislation.

A complete breakdown of potential job losses as a result of the expiration of the tax incentives by state can be seen here.