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Ethanol company shelves plan, blames Senate bill and tariffs

Tuesday, Apr 30, 2019

* Jacksonville Journal-Courier

Marquis Energy has “shelved” plans for an ethanol plant in Scott County, the company announced Monday.

Citing state legislation and U.S. trade policy, the Hennepin-based company said it would let more than 800 acres in two-year land options in Scott County expire at the end of April. The plans are being canceled indefinitely, according to spokeswoman Danielle Anderson.

The company had plans to develop a $500 million ethanol plant — to be built near Bluffs, about 60 miles west of Springfield, by 2020. […]

Trade tariffs also were a factor in the decision. According to the company, tariffs have restricted international export markets for ethanol and distilled grains.

“These tariffs caused a reduction in corn value, leading to lower prices for U.S. farmers and adding to an already distressed agricultural economy,” Marquis said.

* From the company’s CEO

“Illinois government’s anti-business and high tax policies will require us to pursue company expansions in surrounding states. [Senate] bill SB 1407 is an example of legislation that will negatively impact our company’s expansion plans — removing our company’s choice in construction contractors we hire and the agreed upon price between the two parties, reducing competition and inflating costs.”

We’ve talked about SB1407 before. It’s got employer groups up in arms, particularly the manufacturers and the Black Caucus has some reservations as well because of the bill’s strong support by the trade unions. Its passage is not assured, so making a major business decision based on a bill that hasn’t even been voted on yet in the originating chamber is a bit… odd.

* From the Illinois News Network

Associated Builders and Contractors of Illinois President Alicia Martin said Senate Bill 1407 could be a slippery slope.

“The one component that we feel is very egregious is the fact that prevailing wages will be required on private work in these refineries and then where would the overreach come next,” Martin said.

Supporters of the legislation have told lawmakers in committee that the measure is about ensuring safety at refineries, and prevailing wage jobs are the safest jobs. […]

State Rep. C.D. Davidsmeyer, R-Jacksonville, said if Illinois lawmakers could just get out of the way of businesses, Illinois’ economy could grow.

“If [majority Democrats] would stop doing political favors for their largest political donors I think that we could actually have an economy that thrives and we wouldn’t have to be talking about tax increases or fee increases or any of those things and we could just grow naturally,” Davidsmeyer said.

- Posted by Rich Miller        

38 Comments
  1. - 360 Degree TurnAround - Tuesday, Apr 30, 19 @ 2:59 pm:

    These refineries are employing out of state workers. Marquis uses non-union contractors anyway. Prevailing wage is in place to protect local contractors and local workers.


  2. - wordslinger - Tuesday, Apr 30, 19 @ 3:01 pm:

    –“Illinois government’s anti-business and high tax policies will require us to pursue company expansions in surrounding states.–

    How would “high-tax policies” impact an ethanol producer? Were they planning on selling all their product in-state? That’s all they would be taxed on.


  3. - Da Big Bad Wolf - Tuesday, Apr 30, 19 @ 3:02 pm:

    Lol. Someone at Marquis needs to watch School House Rock.

    https://www.huffingtonpost.com/wires/2009/08/25/the-vast-majority-of-bill_ws_268630.html


  4. - Captain Obvious - Tuesday, Apr 30, 19 @ 3:06 pm:

    Nothing at all “odd” about shelving this plan based on only a potential bill, especially given the current anti business climate in the state legislature. It would be much more “odd” to proceed with a $500 million dollar project without confidence the cost of labor going forward.


  5. - Skeptic - Tuesday, Apr 30, 19 @ 3:06 pm:

    “If [any politician] would stop doing political favors for their largest political donors…”


  6. - Nuke the Whales - Tuesday, Apr 30, 19 @ 3:09 pm:

    ==so making a major business decision based on a bill that hasn’t even been voted on yet in the originating chamber is a bit… odd.==

    No, but making a major business decision for other reasons and then using that decision to come out against legislation you don’t like and take a shot at your political opponents is typical.


  7. - Lucky Pierre - Tuesday, Apr 30, 19 @ 3:12 pm:

    Why would it make sense for companies and investors to start new businesses in rural Illinois so Cook County Democrats can tell them how to run their business? Neighboring states have nowhere near the regulations, red tape and expenses Illinois imposes to keep Democratic special interest groups happy.

    Zero outreach to the business community has its consequences.


  8. - NoGifts - Tuesday, Apr 30, 19 @ 3:23 pm:

    More likely it is based on the ethanol market https://ethanolrfa.org/wp-content/uploads/2019/02/RFA2019Outlook.pdf giving them and opportunity to kiss up to the republicans by repeating their talking points. When the trade organization starts its report with “It’s easy to get discouraged.”


  9. - JS Mill - Tuesday, Apr 30, 19 @ 3:24 pm:

    =Zero outreach to the business community has its consequences.=

    So subsidies=outreach? If the company can’t function without government handouts then they are not fit to operate.

    After all, we are capitalists right comrade LP?


  10. - NoGifts - Tuesday, Apr 30, 19 @ 3:26 pm:

    The report shows that gross value of US ethanol industry output has declined to where it was in 2010. And has been stagnant since 2015. (page 5)


  11. - Big Boy Pants - Tuesday, Apr 30, 19 @ 3:27 pm:

    While Iowa and Illinois grow essentially the same amount of corn, Iowa has 43 ethanol plants while Illinois has 14 ethanol facilities - most of which were built before the ethanol use requirements. The bummer is many of the Iowa plants use Illinois corn to supply jobs to Iowans. Investment flows to where it can get the best return. Not a real surprise that Marquis canned the facility.


  12. - Lucky Pierre - Tuesday, Apr 30, 19 @ 3:44 pm:

    Get your facts straight JS Mill.

    Marquis was not asking for subsidies, they resented the intrusion of Illinois government. When other states would welcome them with open arms.

    Remember the Reagan criticism of the Carter administration

    If it moves tax it, if it is still moving regulate it, when it stops moving subsidize it.

    Or Illinois could just leave them alone for the most part and watch our economy start to grow again.


  13. - City Guy - Tuesday, Apr 30, 19 @ 3:44 pm:

    I have always heard grain based ethanol is bad agricultural policy, food policy and energy policy. It is prevalent because Iowa, the first primary state, is a big corn grower.


  14. - Dave A - Tuesday, Apr 30, 19 @ 3:46 pm:

    Ethanol IS a political gift in the first place. Take out the subsidies both land and crop… make them responsible for run-off and delta clean-up. Charge them tax on the fuel they use like the rest of us. After all of that, let them operate their business as they see fit. $500 million to spend?? I think they have room to put local workers to work on their projects


  15. - NoGifts - Tuesday, Apr 30, 19 @ 3:48 pm:

    Ethanol producer magazine January 2018 http://ethanolproducer.com/articles/15058/usda-releases-10-year-forecasts-for-ethanol-biodiesel-production “The report states ethanol production is expected to increase during the beginning of the 10-year projection period, but decline throughout the rest of the decade, returning to 2016 levels by the end of the projection period.”


  16. - Rich Miller - Tuesday, Apr 30, 19 @ 3:56 pm:

    ===Marquis was not asking for subsidies, they resented the intrusion of Illinois government===

    Isn’t the entire industry essentially built on subsidies?


  17. - Blue Dog Dem - Tuesday, Apr 30, 19 @ 4:02 pm:

    No demand for ethanol under the Green New Deal.


  18. - northsider (the original) - Tuesday, Apr 30, 19 @ 4:05 pm:

    Mr. Marquis is going to great lengths to avoid blaming Trump’s tariffs.


  19. - Anonymous - Tuesday, Apr 30, 19 @ 4:06 pm:

    –making a major business decision based on a bill that hasn’t even been voted on yet in the originating chamber is a bit… odd.–

    Not really, it happens all the time it just usually is not issued in a press release.


  20. - Concerned Dem - Tuesday, Apr 30, 19 @ 4:09 pm:

    The real reason this project got the ax was the trade tariffs mentioned at the end of the story… their product is less profitable because a president they like is engaging in a short sighted trade war. But it’s easier to blame a piece of legislation that hasn’t become law yet because it come from those mean old city slickers in Chicago.


  21. - Blue Dog Dem - Tuesday, Apr 30, 19 @ 4:11 pm:

    Concerned Dem. I strongly disagree.


  22. - illini - Tuesday, Apr 30, 19 @ 4:15 pm:

    @Rich - Exactly correct. Ethanol is an industry that would not exist if it were not for the subsidy. Just ask John Shimkus.


  23. - Skeptic - Tuesday, Apr 30, 19 @ 4:23 pm:

    “The bummer is many of the Iowa plants use Illinois corn to supply jobs to Iowans.” You’d prefer they use Iowa corn to supply jobs to Iowans?


  24. - Oberon - Tuesday, Apr 30, 19 @ 4:40 pm:

    Marquis faced many obstacles regarding this plant: It needed a new barge terminal on the Illinois River with a rail link; it needed a 30-mile natural gas pipeline to fuel the plant,; and it faced obstacles from the presence of federal and state-listed endangered species. In short, it needed federal permits with very long lead-times whose issuance was not assured, and it needed those permits in time to build the facilities before the Corps of Engineers closes the Illinois Waterway this summer for lock maintenance, which will isolate their existing plant near Henry. None of that was going to happen in time. It won’t be the last time the real reasons for a corporate decision are not cited when political hay can be made otherwise. Tariffs certainly had nothing to do with it, since those would apply no matter what State you build in. Likewise federal laws like the River and Harbors Act.


  25. - Chicagonk - Tuesday, Apr 30, 19 @ 4:54 pm:

    SB 1407 is a bad bill. I’m all for minimum wage increases because they impact people living in poverty, but this law is pretty much the definition of socialism.


  26. - wordslinger - Tuesday, Apr 30, 19 @ 5:03 pm:

    –The bummer is many of the Iowa plants use Illinois corn to supply jobs to Iowans.–

    Who knew Iowa ran out of corn? When did happen?


  27. - Generic Drone - Tuesday, Apr 30, 19 @ 6:32 pm:

    So they couldnt soak the taxpayers. Then they took their ball and went home.


  28. - Not a Billionaire - Tuesday, Apr 30, 19 @ 6:51 pm:

    Wouldn’t a lower price of corn actually be good for them? Also tariffs have had no effect on corn. China is a soybean buyer not corn. So ….


  29. - Da Big Bad Wolf - Tuesday, Apr 30, 19 @ 7:03 pm:

    ==Wouldn’t a lower price of corn actually be good for them? Also tariffs have had no effect on corn. China is a soybean buyer not corn.==

    “According to the company, tariffs have restricted international markets for ethanol and distilled grains.”

    Tariffs prevent Marquis Energy from selling their end product, not from buying raw materials.


  30. - Chicagonk - Tuesday, Apr 30, 19 @ 7:36 pm:

    @NotaBillionaire - Ethanol byproduct is distiller grains (DDGS). The big market on this was China, but they put huge tariffs on it (these actually were announced in 2016, so this one isn’t on Trump).


  31. - Blue Dog Dem - Tuesday, Apr 30, 19 @ 8:03 pm:

    40% of US corn production goes into biofuels. The Green New Deal eliminates biofuels by 2030. Not only will the ethanol industry be gone, but so will the corn industry.


  32. - SSL - Tuesday, Apr 30, 19 @ 8:37 pm:

    Looks like it didn’t make sense to move forward, so the CEO took the opportunity to make a political statement.


  33. - Da Big Bad Wolf - Wednesday, May 1, 19 @ 6:45 am:

    Requiring hazardous business to have safety training and hire people that know what they are doing isn’t anti business. It’s neighborly. The neighbors don’t want to die. West Texas Fertilizer was a hazardous business. When it exploded it took out a middle school, a nursing home, an apartment building, about 150 buildings in all.
    And what company doesn’t want to prevent something like this anyway? It’s no fun going to workers’ and neighbors’ funerals.


  34. - SPC - Wednesday, May 1, 19 @ 7:19 am:

    Real estate tax subsidized. Gas Tax abated. Farm subsidy. All to grow corn - for food. Take that all away and there is no ethanol. Stop pretending like we need this fuel. Make whiskey and stop playing politics.


  35. - Pot calling kettle - Wednesday, May 1, 19 @ 8:24 am:

    ==40% of US corn production goes into biofuels. The Green New Deal eliminates biofuels by 2030. Not only will the ethanol industry be gone, but so will the corn industry.==

    Folks gotta eat. Burning food may not be the best way to meet our needs. Farmers will find a different crop to grow that meets a different market need.


  36. - Union4thePeople! - Wednesday, May 1, 19 @ 8:41 am:

    - Chicagonk - Tuesday, Apr 30, 19 @ 4:54 pm:
    ===
    SB 1407 is a bad bill. I’m all for minimum wage increases because they impact people living in poverty, but this law is pretty much the definition of socialism.===

    I guess the ‘definition of socialism’ extends to lending a helping hand to the 3,000+ travellers–mostly refinery welders, day-laborers, and electricians–that reside in Texas, Louisiana, Oklahoma and Arkansas, but take our IL Prevailing Wages (or IL min. wages) back to their Right-to-Work states?
    Paying on a hotel room, buying gas station snacks, and fueling up miles outside IL [when they exhaust the stored-fuel in their bulk “drag-up” tanks] is the only contribution to our economy these unskilled, non-Union, migrant workers provide. Is this the ‘competitive contracting’ or agreed upon construction cost that Marquis is quoted saying was the “Deal Breaker”?
    Or, was it the stark realization SB 1407, if passed, would bring their Putnam County employees up to a livable, sustainable middle class wage?


  37. - Not a Billionaire - Wednesday, May 1, 19 @ 8:42 am:

    Clean meat will eliminate the need for corn and soybeans. Much more efficient than highly subsided slaughter meat.


  38. - wordslinger - Wednesday, May 1, 19 @ 8:55 am:

    The ethanol industry is one of the greediest hogs at the public trough; the industry would not exist without massive government intervention in the marketplace.

    Talk about your socialism….

    I’m pretty sure there was corn and corn farmers before the ethanol scam was invented. Farmers are even capable of adapting and diversification, believe it or not.

    Chemical producers are the big winners in the government-created ethanol industry, the ol’ family farmer, not so much.


Sorry, comments for this post are now closed.


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