Power Fund Rollout Address
Governor Chet Culver
March 29, 2007
Thanks for the gracious introduction. Thank you all for being here. All across Iowa, after the sometimes challenging winter weather, we are seeing the first signs of spring. The temperature is getting warmer, color is returning to the trees and grass, and farmers are making preparations for planting.
Its great to get out of the confines of the capitol and I am very happy to be here.
So, its a time of new beginnings. At this time, we anticipate growth, and because our economy is linked to the land, we anticipate prosperity.
When I was inaugurated in January, I said I believe this is our time. Its our time to accept the challenges before us, and to tap Iowa’s unlimited potential.
I also said it doesn't matter whether you are a Republican, Democrat or Independent / whether you live in rural Iowa or urban Iowa / whether you are a native Iowan or a new arrival / young or old. What does matter is that we lock arms “for the common good” and tap our “gold mine” of potential.
The goal should be to work together in a sincere and inclusive way, to create "One Iowa."
Well, we have a unique opportunity to do this in renewable energy, and I want to talk about that today.
Our value-added opportunities allow us to take from the earth more than once because we are blessed with the best soil, incredible science and technology and the most productive farmers in the world.
This spring, Iowa’s opportunities are more plentiful than ever. Our administration has been working hard with legislators on the details of a energy proposal that will take advantage of our unlimited opportunities in the new bioeconomy.
Today, I believe, is the time for Iowa to take the lead in the race to become the energy capital of the world.
What we need is an exciting, forward-thinking plan and coordinated effort to explore our new energy frontier.
America and the world are counting on Iowa to succeed. When we do, we will harvest rewards beyond our wildest imagination. Iowa has the potential to literally become the Silicon Valley of the Midwest.
We can create the jobs of the future in Iowa that will keep your kids and my kids at home where they belong. And, I have a detailed plan to do it.
That’s why today I am highlighting the Iowa Power Fund.
I believe it is one of the most important pieces of legislation the Iowa legislature has considered in recent history.
The $100 million Power Fund will allow Iowa for the first time to invest in and attract cutting edge research and development related to renewable power.
This will begin the process of making our entire state a laboratory so we remain on the cutting edge of all forms of renewable energy.
It will also allow us to lead in entrepreneurship, commercialization and small business development related to these new technologies. It will allow Iowa companies to get started and expand to meet the needs of emerging markets. Finally, it will help us create jobs, not just in urban areas, but jobs close to the land in rural Iowa too.
We have already led the nation in ethanol, E-85 and biodiesel. Today we take on the challenge of maintaining that leadership. For Iowa, this marks the launch of a "next generation energy economy."
This will change the face of our state and improve our economy for many years to come.
This effort is at the heart of what I’ve described as our “21st Century Iowa Expedition.”
Ethanol, E-85 and biodeisel have been great boons to this state. We have literally built new industries, created new wealth and an entirely new market for our value-added products. The impact of these new fuels on Iowa is not to be discounted.
The facts tell a dramatic story. We have one of the five fastest growing bioeconomies in the country. According to a recent study by the Iowa Renewable Fuels Association, Iowa leads the nation in biofuels output, accounting for a third of the nation’s ethanol production and 20 percent of the nation’s biodiesel production.
These industries have added $8.2 billion to the Iowa GDP, have generated nearly $2 billion in household income and have created more than 53,000 jobs through the entire Iowa economy. It would be difficult to find a state experiencing a greater per-capita effect from the bioeconomy.
But alternative fuel is just a part of the new energy economy. Our experience should operate as a model, offering lessons about how new bio-industries are created.
However, our ultimate goal must be diversification. Our natural resources do not begin and end with corn and beans. Why can’t Iowa be the leader in all forms of renewable energy?
We’re off to a great start. For example, Iowa is a natural home to technologies that seek to change biomass into energy.
We have some of the densest concentration of biomass per acre anywhere in the world.
We’re a recognized leader in soy lubricant. We’re developing one of the nation’s first biorefineries and wind storage projects. And, because of breakthrough research and development done right here in Iowa, we are finding ways to burn oat hulls from Quaker Oats in place of coal imported from Wyoming. Iowans have started to explore this new energy frontier.
And there’s much more. Other renewable energy opportunities for Iowa include: geothermal, solar, and as you are very well aware here at Clipper, wind energy. We can be the national leader in all of these areas. Iowa is third in the nation in wind power, and believe it or not, we have as much sun here on an annual basis as they do in Hawaii.
We have the potential to rapidly expand all of these industries if we coordinate and concentrate our efforts. However, significant state research and development funds must be available if we intend to tap this gold mine of potential. That’s what the Iowa Power Fund will allow us to do.
That’s why this session I have proposed the first phase in the creation of the Iowa Power Fund. This immediate investment of $25 million will show the nation and the world Iowa is serious about investing in the cutting edge research and development required in the new energy economy.
It will also allow us to create a new cabinet level office focused entirely on leading the nation in renewable energy production and energy efficiency.
The Iowa Power Fund and the new energy office represent a new vision for how state government will operate in the 21st Century bioeceonomy.
I want to be clear, this is not the creation of more bureaucracy in state government for the sake of expanding government.
In fact, it represents an effort to coordinate, streamline and focus our efforts around renewable energy. We must be able to target all opportunities, move quickly to seize them and make the best use of these limited financial resources.
The new energy office and the Director will need the flexibility and authority to act across all department boundaries, and to work with private sector energy partners.
The energy field is, after all, one of the most dynamic and rapidly changing in our economy. The Director will need the ability to coordinate efforts throughout state and federal government.
This flexibility must extend to the management of the Power Fund as well. That’s why I am proposing the creation of a Power Fund Board made up of the most experienced, knowledgeable and capable stakeholders.
This citizen board will make recommendations about the most appropriate use of the Power Fund research and development funds.
This will be a transparent and open board that will be appointed by the Governor, confirmed by the Senate and subject to open meetings and open records laws.
I believe the Power Fund should not be earmarked for specific projects at this point because over time, priorities will change and the board will need to adapt to the realities of the market. Instead, that discretion should be given to the board.
The Power Fund needs to be built for the long haul and administered as close to the ground as possible. Changes in code or rule take a long time to implement and we will miss opportunities if we put too many restrictions on the fund. Simply put, we need to stay on the cutting edge.
In addition, making promises to pay for specific projects or ideas at this point negates one of the important benefits of the fund, which is that it has the potential to attract hundreds of millions of dollars in federal and private investment to our state. We can’t leverage funds that are already been spoken for.
We can’t afford to wait. We aren’t the only state in the race. Others are competing.
Fortunately we have existing economic development tools like the Iowa Values Fund that will complement the Power Fund. The values fund has and will continue to play a critical role, especially when it comes to job creation related to alternative energy.
However, expeditions need leadership. And, as Governor, I intend to set the tone. That’s why I am working with legislators in a bipartisan way to launch the Power Fund.
Leadership also means asking all Iowans to make a contribution to this effort. That’s why I have called upon every Iowan to be a part of this exciting endeavor.
For some, that might mean something as small as conducting a home energy efficiency audit, for others it might mean something as big as purchasing a flexfuel vehicle.
Whether its energy efficiency or new ideas, I intend as Governor to challenge Iowans to be a part of the new energy economy. We all stand to gain when our economy grows.
The Power Fund will also allow us to build a bridge between rural and urban communities and create One Iowa.
Perhaps the biggest impact of the Power Fund will be felt in our rural communities, close to the land.
For example, recently I traveled to Albert City, in northwest Iowa, to celebrate the opening of the US BioEnergy ethanol plant there.
The amazing thing about that day was the NASDAQ stock exchange closing bell was present there. Wall Street and Main Street came together like never before. This is another example of what’s possible and another sign of our progress in revitalizing rural Iowa.
However, we’re really just scratched the surface. The possibilities are incredible.
One exciting invention on the horizon is a self-sustaining “closed loop” energy concept. For the first time, this would bring together an alternative fuels production plant, a livestock operation and a manure management facility.
The plant would produce the feed as a byproduct of its fuel production.
The feedlot would produce manure for the management facility, which in turn would use a methane digester to produce energy to run the ethanol plant. A closed loop.
Think about it: this reduces dependence on fossil fuels and utilizes a byproduct of ethanol production. With this kind of technology we can achieve the energy independence we are working toward.
We are poised for a period of unprecedented economic growth and job creation if we are willing to implement the public policy and provide the leadership to allow these new ideas and innovations to flourish.
Frankly, the future of Iowa depends on it. I believe there is too much at stake for us to shirk this responsibility.
These fields are gold mines, and we must seize this moment!
That’s why today I am asking legislators, before this session ends, to create the Iowa Power Fund.
It’s time for Iowa to take the lead.
Let our new 21st Century energy expedition begin.