Ethanol – Economy and Energy

Ethanol’s impact on an economy

Ethanol creates jobs, increases farm income, reduces farm program payments, and decreases the amount of energy we import. Local people are employed by ethanol plants, local crops are purchased to make the ethanol, and local tax bases are significantly expanded. An ethanol plant of average size employs about 40 people with well-paying, high-skill jobs. Local providers of goods and services for the plant also provide spin-off jobs. The combination of reduced farm program payments and increased tax revenues adds at least $1.30 (this figure even takes into consideration the ethanol incentive program) to the U.S. Treasury for every gallon of ethanol produced.

Ethanol is an American-made fuel, and though it is not the ultimate answer to our nation’s energy needs, it certainly helps our country to be more energy independent. U.S. ethanol production provides for our economy more than 4 billion gallons of fuel that is produced domestically from renewable resources and does not need to be imported.

Energy Balance of Ethanol

Ethanol yields more energy than it takes to produce it, which means it has a positive energy balance. Not only is ethanol an efficient fuel, but it is made through an efficient process; it requires less than 35,000 BTUs of energy to turn corn into ethanol, while the ethanol offers at least 77,000 BTUs of energy. Studies show that ethanol has a positive net energy balance. The most recent study, conducted by the U.S. Department of Agriculture, shows that ethanol provides an average net energy gain of at least 77%.


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