Increased ethanol production has tremendous economic benefits including trade deficit reduction, job creation, and strengthening of agricultural markets

Overview

• Expanded ethanol production creates jobs, reduces the nation’s trade deficit, and generates development in a number of sectors, including the agricultural (growing the feedstock), energy, transportation, technology (provides software for plant operation), manufacturing (provides plant components), construction, and financial (provide investment capital) sectors.

• In the U.S., ethanol production is now responsible for creating more employment in rural areas than any other economic activity.

• As ethanol demand increases and the U.S. ethanol program begins to encompass a variety of feedstock rather than relying solely on corn, more and more communities are hosting ethanol plants, moving the benefits of ethanol production beyond rural America.

• The economic impact of ethanol production creates a ripple effect, benefitting first the local economies that host ethanol plants and moving on to the state and the nation.

• For some of the poorest and most unstable countries in the hemisphere, such as Nicaragua and Haiti, the expansion of ethanol production could prove to be a significant development tool.

Job Creation & Economic Development

• Using more home-grown fuel (ethanol) could help reduce the nation’s trade deficit. The Energy Information Administration posits that the U.S. imported 67% of crude oil supplies in 2006 – and spent more than $300 billion to do it. This outflow of dollars for energy accounted for 40% of the U.S. record trade deficit of $763 billion. (Ethanol Across America)
  

• In 2007, the U.S. used more than six billion gallons of ethanol, eliminating the need for 200 million barrels of oil and thereby reducing the nation’s trade deficit by $13.5 billion. (Ethanol Across America) 

• According to the Renewable Fuels Association (RFA), in 2005 the ethanol industry supported the creation of more than 153,725 jobs in all sectors of the U.S. economy, boosting U.S. household income by $5.7 billion.
  

• In 2006 the ethanol industry increased gross economic output by more than $40 billion and supported the creation of more than 160,000 jobs. (RFA)

• According to a case study conducted by the Northeast Regional Biomass Program, a 50 million gallon per year (mpgy) wood-to-ethanol plant will generate $170 million to $200 million in income and create between 4,000 and 6,000 jobs.
  

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• In Brazil, for each unit of energy generated, oil creates one job, coal production employs four, and ethanol 152.

• In terms of investment required for job creation in Brazil, the petrochemical industry spends US $220,000 for each job created, while ethanol producers create one job for each US $15,000 spent.

• Ethanol saved Brazil $43.5 billion U.S. dollars between 1976 and 2000.

For more information on the economic impact of ethanol production, including several case studies, click here to download the issue brief "Economic Impacts of Ethanol Production" prepared by the Ethanol Across America education campaign.