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Ethanol

What is Ethanol?
Ethanol is an alcohol-based alternative fuel produced by fermenting and distilling starch crops that have been converted into simple sugars. Feedstock for this fuel include corn, barley, and wheat. Ethanol can also be produced from "cellulosic biomass" such as trees and grasses and is called bioethanol. Ethanol is most commonly used to increase octane and improve the emissions quality of gasoline. In some areas of the United States, ethanol is blended with gasoline to form an E10 blend (10% ethanol and 90% gasoline), but it can be used in higher concentrations such as E85 or E95. Original equipment manufacturers produce flexible-fuel vehicles that can run on E85 or any other combination of ethanol and gasoline.

Consumer Benefits

• U. S. consumers use more than 18 billion gallons of high performance, cleaner burning ethanol-blended gasoline each year.
• Ethanol increases oxygenate supplies, reducing the need for MTBE imports and helping to reduce consumer costs.
• Ethanol is a high-octane blending component used by many gasoline marketers -- helping to keep this important class of trade viable and creating competition for the major oil companies.

Economic Benefits

• More than $3 billion has been invested in 60 ethanol production facilities operating in 20 different states across the country.
• The ethanol industry is responsible for more than 40,000 direct and indirect jobs, creating more than $1.3 billion in increased household income annually, and more than $12.6 billion over the next five years.
• The ethanol industry directly and indirectly adds more than $6 billion to the American economy each year.
• The demand for grain created by ethanol production increases net farm income more than $12 billion annually.
• Increases in ethanol production offer enormous potential for economic growth in rural communities. USDA has estimated that a 100 million gallon ethanol plant could create 2,250 local jobs.

Agricultural Benefits

• Industrial corn use, which includes ethanol and sweetener production, is now the second largest consumer of corn in America.
• Ethanol production consumed 535 million bushels of corn in 1994 (5.3% of the record 10 billion bushel corn crop). About 667 million bushels of corn were used for ethanol in 2001.
• The demand for corn created by the ethanol industry increases crop values -- accounting for approximately $0.14 of the value of every bushel of corn sold, or $ 1.4 billion.
• If the market for ethanol did not exist, corn stocks would rise and net income to American corn farmers would be reduced by $6 billion over the next five years, or about 11 %.
• Many farmers now own and operate ethanol plants, allowing them to add value to their own corn.

Energy / Trade Benefits

• Domestic ethanol production reduces demand for imported oil and imported MTBE which drains our economy - oil and MTBE imports now represent almost 80% of the U.S. trade deficit.
• Currently, imported oil accounts for about 56% of oil used, and imported MTBE is at a record 31% of domestic production.
• Today, ethanol reduces the demand for gasoline and MTBE imports by 98,000 barrels per day. A 98,000 barrel/day replacement of imported MTBE would represent a $1.1 billion reduction to our annual trade deficit.
• Ethanol production also generates exports of feed co-products, such as corn gluten, further enhancing our balance of trade.
• Ethanol production is extremely energy efficient, with a positive energy balance of 125%, compared to 85% for gasoline. Ethanol production is by far the most efficient method of producing liquid transportation fuels. According to USDA, each Btu used to produce a Btu of gasoline could be used to produce 8 Btus of ethanol.

Environmental Benefits

• 10-percent ethanol blends reduce carbon monoxide better than any other reformulated gasoline blend -- more than 25%.
• Ethanol is low in reactivity and high in oxygen content, making it an effective tool in reducing ozone pollution.
• Ethanol is a safe replacement for toxic octane enhancers in gasoline such as benzene, toluene and xylene.
• Oil companies are now starting to acknowledge the environmental and energy benefits of ethanol.