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Inward Investment Guides

March 2010 Report on The Plains States: Discovering and Nurturing New Business

Mali R. Schantz-Feld (Feb/Mar 10)
As the national economy just begins to show glimpses of promise, the Plains States - Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, and South Dakota - are already showing slow but steady signs of recovery. Reed Construction Data reported in January that the strongest economy among the nation's regions continues to be in the Plains States. Andrew Gledhill of the Moody's Economy.com concurs, noting that this region has suffered relatively minor recessions, with comparably minor job losses, making the likelihood of minor gains more predictable as the national economy gains more stability. States that avoided the housing bust, such as Nebraska, North Dakota and South Dakota, will make a quicker comeback, while areas dependent upon cyclical industries such as manufacturing will take more time to mend.

Growth in Alternative Energy
Alternative energy is a common growth niche in the Plains, with each state touting energy-generating resources. Iowa's strong agricultural foundation and penchant for manufacturing have resulted in developments in wind energy, renewable fuels including ethanol and biodiesel, biomass, and other next-generation technologies. Its corn and soybean crops and windy plains offer plenty of alternative energy options. As a result, the state touts a first-place ranking in the nation in the production of ethanol, second in the production of biodiesel, and second overall in wind-generation output. As of February 2009, Iowa housed nine international wind-related manufacturing companies as well as more than 200 suppliers in 26 counties supplying the wind industry, according to the Iowa Office of Energy Independence.

Even before Dorothy's famed trip from her farm to Oz, Kansas' location in the nation's "wind corridor" has garnered national attention. The state is ranked third nationally for wind-harnessing potential. Siemens Energy chose Hutchinson in Reno County for its first U.S. nacelle production facility (nacelle is the structure on a wind turbine that houses all of the components that generate electricity) to contain 300,000 square feet and an adjacent 80,000-square-foot service and repair facility that is expected to create approximately 400 green-collar jobs. Hutchinson provided "the ideal location because of the state and local commitment to wind energy development," says Kevin Hazel, head of Siemens Energy's Americas wind-power supply-chain management.

Minnesota ranks ninth in the country for wind energy potential, much of which is located along the Buffalo Ridge in the south and southwest part of the state. In addition, the state ranks fourth nationwide in ethanol production capacity, according to the Renewable Fuels Association. Companies pursuing innovations in fuel cell products include Entegris, 3M, Donaldson, ICM Plastics, Atmosphere Recovery, and Cummins.

Missouri also participates in the Plains' power play. ProEnergy Services, a third-party service provider to the global energy industry, is adding a turbine services division on its Sedalia headquarters campus. "Our company was founded on the vision to provide service for every phase of a power plant project's life cycle, from conception to long-term operations and maintenance," says John Stevens, vice president of sales. He adds that incentives that ProEnergy received from the Enhanced Enterprise program through the state of Missouri were one of the main reasons for its relocation to Sedalia from Atlanta. "The quality jobs initiative has leveraged the company's ability to expand from a single facility to a spacious campus," Stevens says. He adds, "ProEnergy also received cooperation through the Sedalia Pettis County Economic Development. Because of its central location, Sedalia has proven to be a great location for business and a wonderful community for the employees and their families."

North Dakota's energy sector is buzzing about the development of Great River Energy's (GRE) Spiritwood Station, which will generate two primary products - electricity and steam - when it comes online this year. The enlarged complex will consist of Spiritwood Station, GRE's 99-megawatt combined heat and power plant, and three major production facilities: a large barley malting facility, which is already in place, as well as a biomass refinery and a biodiesel production facility, both of which are planned additions. Program partners include GRE; Cargill Malt; the Jamestown/Stutsman Development Corp. (JSDC), which is working to develop the biodiesel facility; and Otoka Energy Corp. and Inbicon A/S, which are working together to build the biomass refinery.

A favorable business history spurred the GRE development. "Great River Energy has operated two power plants in North Dakota, starting first in the mid-1960s. During that time, we have developed a strong partnership with the state through our positive impacts on jobs and economic activity, and our focus on environmental stewardship, says Al Christianson, GRE's manager for North Dakota business development and governmental affairs. "The state also supports further energy development, and that support is a major reason why we are building a combined heat and power plant - Spiritwood Station - near Jamestown, North Dakota."

According to the Great Plains Energy Corridor, biofuel production has grown in North Dakota with the addition of five biofuel facilities in the last five years. Lignite, a form of coal, is another important component of North Dakota's energy sector, since it generates electricity and produces synthetic natural gas and fertilizer products. The state has the largest proven reserve of lignite coal in the world. Lignite already has an estimated annual impact of $3 billion and directly employs more than 4,000 people in the state. In addition, the Energy Information Administration notes that North Dakota coal production accounts for nearly 2 percent of the nation's total annual production.

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