A Refresher on Ethanol’s Many Benefits

FROM THE SEPTEMBER ISSUE: RFA President and CEO Bob Dinneen reminds readers how beneficial ethanol is to the environment and consumers.
By Bob Dinneen | August 23, 2017

As summer winds down and Congress returns from its August recess, it’s a good time to provide a refresher on ethanol’s many benefits and why consumers benefit when there’s a choice at the pump.
For starters, ethanol helps reduce air pollution and cut greenhouse gas emissions. According to a January analysis by the U.S. Department of Agriculture, corn-based ethanol reduces greenhouse emissions (GHG) by 43 percent compared with gasoline, including hypothetical land use change emissions. The same analysis found that by 2022, corn ethanol could reduce GHG emissions by 76 percent compared with gasoline.

Additionally, the use of 15.3 billion gallons of ethanol in gasoline in 2016 reduced carbon dioxide-equivalent GHG emissions from the transportation sector by 43.5 million metric tons—the equivalent of removing 9.3 million cars from the road for an entire year.

Meanwhile, ethanol provides a boost to local economies. Last year, the production of 15.3 billion gallons of ethanol supported 74,420 direct jobs and 264,756 indirect and induced jobs. In 2016, ethanol generated $9 billion in tax revenues, some of which went toward schools, roads and first responders. Additionally, ethanol added $42 billion to the 2016 U.S. gross domestic product and boosted household incomes by $23 billion.

Ethanol also has made a significant dent in the goal for U.S. energy independence. Net petroleum import dependence fell from 60 percent before the Renewable Fuel Standard was passed in 2005 to just 25 percent in 2016 and would have been 33 percent without the addition of 15.3 billion gallons of ethanol to the fuel supply.

Ethanol also is helping to fuel and feed the world. On a net basis, the U.S. ethanol industry will use just 2.94 percent of global grain supplies—an eight-year low. More grain is available for both food and feed use worldwide today than ever before and food price inflation has averaged just 2.5 percent annually since the RFS was implemented in 2005, compared with the 3.5 percent average from 1980 to 2004. In fact, the World Bank has concluded oil prices, which impact everything from fertilizer to transportation, have a far greater impact on food prices than biofuels. It is important to note that one-third of every bushel of grain used to make ethanol is enhanced and used as animal feed.

Another benefit to ethanol’s use is its octane boost. With a 113 octane rating, ethanol is the highest-rated performance fuel on the market and keeps today’s engines running smoothly.

Without ethanol and the RFS, Big Oil would continue its near-monopoly at the pump, leaving consumers without any choices. I want to make sure consumers continue to have access to the cleanest, lowest-cost, highest-octane source of fuel in the world. 

Author: Bob Dinneen
President and CEO
Renewable Fuels Association