Ethanol Industry Boosts National Economy (3-5-08)

When it comes to supporting U.S. manufacturing, providing jobs or filling the coffers of government treasuries, the U.S. ethanol industry is doing its fair share – and then some, according to a new study on ethanol’s economic impact.

One of the greatest things about the report, the National Corn Growers Association (NCGA) recognizes, is that ethanol keeps U.S. dollars in the United States. According to the report’s author, economist John Urbanchuk, a director at the research and analysis firm LECG, the production of nearly 6.5 billion gallons of ethanol means that the United States needed to import 228.2 million fewer barrels of oil in 2007 to manufacture gasoline, or roughly the equivalent of five percent of total U.S. crude oil imports. The value of the crude oil displaced by ethanol amounted to $16.5 billion in 2007 – money that stayed in the American economy.

“The hallmark of energy security is reducing our dependence on other countries for vital energy commodities such as oil,” said NCGA president Ron Litterer. “Whether it is corn ethanol, other biofuels, or even petroleum, we need to produce a higher percentage here within our own borders. It’s important for American jobs and American security.”

Other highlights of the report are:

• The combination of spending for annual operations, ethanol transportation, and capital spending for new plants under construction added $47.6 billion to the nation’s gross domestic product (GDP) in 2007.
• The increase in economic activity resulting from ongoing production and construction of new capacity supported the creation of 238,541 jobs in all sectors of the economy during 2007. These include more than 46,000 jobs in America’s manufacturing sector -- American jobs making ethanol from grain produced by American farmers.
• Increased economic activity and new jobs result in higher levels of income for American households. The production of ethanol put an additional $12.3 billion into the pockets of American consumers in 2007.

The ethanol industry generated an estimated $4.6 billion in tax revenue for the federal government -- $1.2 billion over the two major federal support programs for the ethanol industry. And the ethanol industry generated an additional $3.6 billion of tax revenue for state and local governments.

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