Ethanol Science

Benefits to Economy 

Ethanol use will cut the U.S. trade deficit by $34.1 billion through 2012. Doubling ethanol use in the U.S., as called for in the Renewable Fuels Standard, will create nearly 50,000 permanent jobs, with indirect employment totaling over 200,000 new jobs.

Ethanol production and use increases the price and demand for corn.
The local price of corn increases by an average of 5-10 cents per bushel, adding significantly to farm income in the general area surrounding an ethanol plant.

USDA projected that the increased demand for corn to support the additional ethanol production to replace MTBE will increase cash receipts for farmers by $2.3 billion between 2000 and 2004. (AUS Consultants, March 20, 2000)

USDA estimates that the Renewable Fuels Standard would double the demand for corn for ethanol production to 2 billion bushels per year by 2012.

USDA estimates the Renewable Fuels Standard would generate an additional $2 billion to $4 billion in net farm income by 2012.

Currently, 35 of the nation's 85 ethanol plants are farmer-owned. Taken as a whole, farmer-owned ethanol cooperatives represent the single largest producer of ethanol in the country with 40% of the nation's ethanol production.

In the March 2004 study "The Contribution of the Ethanol Industry to the American Economy in 2004", by LECG LLC found that:
The combination of spending for annual operations and capital spending for new ethanol plants under construction will add more than $15.3 billion to gross output in the American economy in 2004.

New jobs are created as a consequence of increased economic activity caused by ethanol production. The increase in gross output (final demand) resulting from ongoing production and construction of new capacity supports the creation of more than 143,350 jobs in all sectors of the economy this year.

Increased economic activity and new jobs result in higher levels of income for American households. The production of ethanol will put an additional $3.9 billion into the pockets of American consumers this year.

The full impact of the annual operations of the ethanol industry and spending for new construction will add $1.25 billion of tax revenue for the Federal government and $806 million for State and Local governments during 2004.

Source: American Coalition for Ethanol, LECG LLC

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