Economics
An April 2008 report by Iowa State University Center for Agriculture and Rural Development noted that ethanol was helping consumers save money at the pump. Depending on your gasoline market, that savings could be 40 cents per gallon. Other studies suggest this could be even higher.
More Fuel
America ’s appetite for fuel continues to grow. And emerging nations such as China and India are putting greater pressure on supplies of gasoline and petroleum.
Ethanol helps increase the total volume of available transportation fuel in the United States. A greater supply of fuel also helps moderate prices.
In fact, from 1996 to 2006, gasoline demand increased by 20 billion gallons. Ethanol production rose 4 billion gallons during that same time—meaning the increase in ethanol production met 20% of the increase in gasoline demand over those ten years. Since 2000, ethanol production has met 30% of the increase in gasoline demand. Just imagine how high gas prices would be without ethanol!
Development
A typical 40 million gallon ethanol plant creates 32 full-time jobs and a total of 694 direct and indirect jobs throughout the entire economy. Most of these are jobs in rural areas of our nation, helping improve the economic vitality of these communities.
Additionally, as the amount of ethanol in our fuel supply increases, more of the gas money Americans spend stays in the U.S. That helps stimulate our national economy—and reduce our trade deficit.
Several studies have been completed that examine the impact of an ethanol plant on the economy.
Agricultural Value
By creating a growing market for America’s agricultural output, the ethanol industry helps increase farm income and reduce the cost of federal farm programs.
It has been said that the ethanol industry is the most significant rural development initiative since the Rural Electric Administration brought electricity to the farm. Greater farm income, investment in rural communities and the economic vitality that result allow rural areas of our nation to contribute not only food, feed and fuel for America’s future, but economic growth as well.
Prices
The price of corn has little to do with the price of ethanol. Instead, ethanol prices tend to track the price of gasoline. As demand for gasoline rises, the price of ethanol tends to rise as well. Ethanol costs less than ordinary unleaded gasoline.
