Ethanol plants no panacea for local economies, study finds

University of Illinois
2/16/09
Jan Dennis, Business & Law Editor
217-333-0568; jdennis@illinois.edu

CHAMPAIGN, Ill. — Just over a year ago, the U.S. ethanol industry was still in overdrive, fueling a wave of new factories to keep pace with surging demand for the corn-based gasoline additive.

But the boom has since stalled amid a deep economic downturn that has stifled demand, one of many threats to the fledgling industry that were forecast in a 2007 study by two University of Illinois researchers.

“Our research found lots of storm clouds that posed risks for ethanol plants, even though the industry was go-go-go at the time,” said Andrew Isserman, a professor of agriculture economics and of urban and regional planning. “The last 15 months have proven just how risky it is.”

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