Governor Branstad supporting Clean Line and MidAmerican Energy Projects (Part 2)

Source: By Loren Gaylord Flaugh, Correspondent, Cherokee Chronicle Times • Posted: Thursday, October 24, 2013

SHELDON – Iowa Governor Terry Branstad began his presentation to about 150 civic leaders at the annual NW Iowa Economic Development Partners meeting at Northwest Iowa Community College here on Oct. 9th by discussing his goals, living healthier, improving education and economic development success. However, the Governor’s most pertinent comments came near the end when he underscored how agriculture is the engine that’s driving Iowa’s economy.

“We’ve set some new goals,” Branstad said. “We want to see 200,000 new jobs over five years, increase family incomes by 25%, reduce the size and cost of government by 15% and restore Iowa to the best of American education student achievement. And now we’ve added the goal to be the healthiest state in the nation.

“We’ve made progress in reforming public education. We’ve provided more help for the community colleges in educating and training our workforce. And, for the first time in 30 years, we’ll see no increase in tuition. So, I think education has had a wonderful year in Iowa.”

Branstad said we developed the Healthy Iowa Plan that eventually became the Iowa Health and Wellness Plan which is designed to be consistent with our goals to be a healthier state and to get people to take ownership of their health.

“Since we started two years ago, we’ve gone from 19th healthiest state in the nation to 9th. Going from 9th to 1st is going to be much tougher,” Branstad noted.

“We’re trying to work with full transparency for our citizens in economic development matters. We’ve had some great successes here in NW Iowa. We’ve had the CF Industries $1.7 billion expansion of their Sergeant Bluff fertilizer facility that was announced.

“We’ve had the new Oroscom Construction Industries fertilizer plant in SE Iowa that’s a $1.8 billion investment. We’re competing for another new fertilizer plant up in NE Iowa that hasn’t been decided yet,” Branstad pointed out.

Branstad continued, “MidAmerican Energy, of course, is making a $1.9 billion expansion to wind energy in Iowa.” MidAmerican’s expansion program is the largest single financial investment in the state’s history which includes adding up to 656 new wind turbines totaling 1050 megawatts of wind energy that’s to be used within Iowa.

“And then, of course, you have here the Clean Line Energy plan. Its tremendous economic development for Iowa and this area of the state which will capitalize on our robust wind energy that we have,” Branstad noted. “All you have to do was be outside today and see that this is the windiest part of the state, so it makes a lot of sense.”

Harkening back, Branstad said, “I’m proud to say that I was the Governor that started this back in 1983. We were the first state to begin a program that we called the Renewable Energy Standard. Since then, 24 states have copied what we have and it’s been very successful. I think we’re up to between 25% or 30% of our energy that’s now produced from the wind.

“Once the MidAmerican Energy and Rock Island transmission lines go through, I was just shown some information tonight that it could be up to 50%. I never imagined it could be that great.

“So when you go to recruit companies like Facebook and Google, these facilities they are building will consume a lot of energy. But to be able to say these are run primarily with clean renewable energy is what they like even more. We’re really proud of what’s going on.”

“We developed the Iowa Partnership for Economic Progress which allows Iowans to support the more traditional ways of economic development. But it also empowers our state to create innovative strategies that support the formation of new companies and to help existing companies to compete globally.

‘We’ve the best and most productive workforce in the world. The work ethic that we have in Iowa is really the envy of the world. However, we need to ensure that our workers can be connected with good paying jobs and rewarding careers,” Branstad said.

“We created the Skills Iowa Initiative which partners with companies that are looking for workers. By using this as a readiness certificate and taking an exam, we can identify people that do have the skills for the job. We’re excited about this’

Branstad then entertained a 10-minute Q and A session. The first questioner noted, “What Clean Line Energy is trying to do is to establish an entirely new business model. They’re focused on shipping excess wind energy out of Iowa and to the east. Do you support the idea of shipping Iowa’s excess wind energy out of state?”

Branstad replied, “Yes. I do. It’s going to where the costs of energy are higher.

First of all, we’re already doing that with ethanol. The state of Iowa has 41 ethanol production plants. We’re producing ethanol and the by-product dried distiller’s grains, a great cattle food that brings cattle feeders back to Iowa. The result is now we produce more ethanol that we can consume in our gasoline in this state.

‘What Rock Island Clean Line is looking at is a direct current (DC) line, which leads to less energy losses along the way. Obviously, in NW Iowa we can produce more energy because of the wind that we have here than what we can consume locally.

‘The benefit is the landowners are going to get the rent from having the power line towers on their land. It will increase the property tax valuation for the counties where the line goes through. Obviously, it helps our country in terms of having a renewable source of energy for cities like Chicago and further east where energy costs are higher.

‘We are fortunate to live in a state where we have low-cost, reliable energy. And that’s a great economic draw too.”

At the August 20th Iowa Utilities Board/Rock Island landowner’s information meeting in Hartley, one group was opposed to the high voltage DC wind energy transmission line to Grundy County, ILL. The Preservation of Rural Iowa Alliance (PRIA) is adamantly opposed to Rock Island’s new idea of shipping excess wind energy out of Iowa and selling this excess power to eastern United States utilities.

The Clay County group, (PRIA) and their president Carolyn Sheridan, repeatedly argued with Rock Island’s spokesperson at the meeting that they must connect costly DC to AC converter stations onto the line so wind energy shipped on the line could be distributed in Iowa. PRIA insisted that Iowa wind energy is only to be used in Iowa.

The Iowa Wind Energy Association website says that Iowa has the potential to generate as much as 570,000 MW of electricity from wind. As of the end of December 2012, Iowa had 5,133 MW of installed wind capacity which is 3rd in the nation.

Larry Den Herder, President of Interstates Electric from Sioux Center asked, “We have full employment here in NW Iowa. There are a lot of jobs here. There are still unfilled jobs too. What can we do to incentivize people that don’t live here to come back or encourage our graduates to come to work here?”

“One of the things we’re going to be talking about is what’s going on at the federal level,” Branstad began. “You’re going to see a massive reduction in the size of the military. There are a lot of people with significant skills in the military that will be coming out in a year or two.

“What we are doing is we’re going to target this group with a bigger marketing effort. We’re looking at some legislative changes that will try to incentivize people with military experience. If they are coming out of the military, we’re going to go to the bases and show them the benefits of relocating to Iowa.

“Another thing is to have internships that give students exposure to the workforce and the job opportunities and careers available here in Iowa. When you look at our state, Nebraska, South Dakota and North Dakota, we have the lowest unemployment rates in the country. So we have a lot going for us.

“The other thing that’s so different since I was Governor in 1983 is agriculture. In 1983, agriculture was the weakest part of the economy. If you look at what’s happened in the last three or four years, it’s the strongest part of the economy. Agriculture is dynamic. With a growing population and the relationship we have with China, they purchase more soybeans than the rest of the world. Do you know why soybeans are at the prices that they are? It’s because of that demand from China,” Branstad insisted.

“The Chinese just bought Smithfield Foods. Do you know what’s going to happen to pork prices in this country? The demand for pork in China is phenomenal. They want a reliable source of pork to feed their people. That means we’re never going to see cheap pork in this country, just like we’re never going to see cheap soybeans.

“That’s going to be true with corn, too, because the demand is growing. We lead the nation in raising corn, soybeans and pork. Besides that, all this bio-technology gives us the chance to grow things like food, beef, pharmaceuticals and replacing petroleum based products with bio-based products. We have a unique opportunity, I think, here in the agricultural heartland because of the demand for what we produce.”

“In NW Iowa, we have some of the most productive farmland in the world. This is the first year in my life that Iowa is going to have to import corn. We’re the leading corn producing state, but this year, because of the demand for all of our livestock and all of these ethanol plants, we’re going to have to import corn from other states to meet our demand in Iowa.”

Harkening back even further, Branstad reflected, “When I was a kid growing up in north central Iowa, the corn price was about $1.25 a bushel on the Chicago Board of Trade (CBOT). At our local elevator, we got about a $1 or about $.25 below the CBOT basis point.”

Branstad talked about a farmer friend from Corning, Iowa where they have an ethanol plant. Branstad continued, “This summer, the price for corn at the plant was about $1.25 basis points above the CBOT, instead of below. In most of Iowa, the corn price now is almost always above the basis price because of the demand we have for all these ethanol plants that need corn every day. So we need to change the mindset to make people realize that it’s not like it was in the past. We have a unique opportunity and we need to capitalize on it.

“Iowa State University has a record enrollment this year with agriculture and engineering courses leading the way. I think there are a lot of reasons to be pretty excited about the opportunities that we have.

“My goal is to create an Iowa that’s a growing, prosperous, dynamic, low-tax state where our regulations are fair, reasonable and still protect the environment. We, I believe, are very well positioned for the future.”