Energy Plans Running Dry- Problem or Deliverance?

So the word from the Los Angeles Times today comes down from San Pierre, Indiana, a town of 156 in the northwestern part of the state. Prior to the credit crunch and economic slowdown, San Pierre was due to be the site of an ethanol processing plant, promising jobs, income and opportunity to a town that is rapidly losing population to nearby cities. Instead, the credit crunch and wildly fluctuating commodities markets have left the plans dead in the water:

But last month, the developers of the San Pierre plant announced that the $62-million deal was dead. Banks involved in the project had cut off their lines of credit. Desperate calls to dozens of other financial institutions led to the same answer: No.

Already battered by other market forces, the ethanol industry has been hit hard by the banking world's credit crunch, and the seemingly bright future of corn-based biofuel has been cast in doubt.

In Pratt, Kan., the grinding mill machinery stands silent inside the Gateway Ethanol plant. It was open for less than six months before running out of money, and there were no bank loans available to keep it going. The firm recently filed for bankruptcy.

In Royal, Ill., developers abandoned efforts to build a plant there and in six other locations, citing an inability to get financing. Plants have been shuttered, or plans for new ones halted, in Mead, Neb.; Belle Fourche, S.D.; Blairstown, Iowa; and Melrose, Minn.

It's sad, no doubt about it. I never like to hear stories about dreams postponed or canceled, especially when opportunities for some of these communities are few and far between. But I have to ask this question- are these industrial outlets truly the kind of development that rural America needs?

For all the promise of being a green industry and an answer to the fuel crisis (although who worries about that now with prices so low?), let's call ethanol processing for what it is- extractive industry. It is dependent on processing raw materials into a more finished form by way of labor- and capital-intensive industrial processes. There are significant byproducts to this process, such as large amounts of emissions and regions turned into monocultures, as well as massive inputs such as fuel to operate harvesters and chemicals for fertilizer. What is the difference between that and any other extractive industry? Mining, logging, fishing? They all make use of raw materials in a low-skill, relatively low-wage job.

Ethanol production is more of the same. It is clear how many of these projects have turned out in America- witness the ghost towns that are shells of their former selves once the boom has gone bust, littered throughout the west, watching commodities prices to turn their resources profitable again. Much like other extractive industries, ethanol production also needs intense government intervention to turn a profit. So let's put to bed the notion that ethanol is some new, green-collar wonderland. It's what we call 'same sh*t, different day.'

I'm not keeping score, but that's quite a few strikes against this plan.

It just seems to me, from where I sit, that we are hitching our horse to the wrong wagon, both as a country and as individual towns. As towns, we must be able to find other ways to spur economic growth. Sure, this is easy to say; in times of trouble, you can't fault someone for jumping at an opportunity as it comes along. To tell the truth, I kind of feel like an ass for saying it. But if we are going to get serious about building our rural communities into self-sufficient ones that are players in a regional and global economy, we have to move past the outmoded models of development for decades past.

So I'm pulling for you, San Pierre, and everyone else that is hurting in this bust. It's going to be hard. But I also want to try, TRY, to see this as an opportunity to reimagine ourselves and our various locales, wherever you find yourself, loyal reader, to compete in the new century and new economy. We can't do that if we stick to the old models.

Do I have ideas, you ask? Sure. They aren't perfect, but what ideas are? If I were the government, I would invest in electronic communications infrastructure for a lot of places in the USA. From where I sit, a lot of these high tech workers would jump at the chance to live in a place like San Pierre, to live away from the madness and heat and crowding of the city high-tech hubs. They would be perfect locations for continuity of operations sites, if the connections could be built reliably enough. Imagine the jobs available both at these facilities, and the multiplier effects on the local economy.

That's my humble idea off the top of my head. If you have anything else... or want to call me out... well, fire away!