Iowa RFA

Ethanol Facts

The Ethanol Industry's Contribution to the National Economy

Despite the Current, Difficult Economic Times in 2008 the Ethanol Industry:
- Had a net benefit to the federal government, after ethanol related tax credit, of more than $7 billion, providing a return of 2.5 for every dollar invested.
- Contributed $65.5 billion to the nation's gross domestic product.
- Supported more than 494,000 jobs in all sectors of the economy.
- Generated an estimated $11.9 billion in tax revenue for the federal governement and nearly $9 billion of additional tax revenue for state and local governments.

The Biofuel Industry's Contribution to the Iowa Economy

Iowa leads the nation in biofuels output accounting for 26 percent of U.S. ethanol and 12 percent of biodiesel production capacity.

Ethanol and biodiesel producers are part of a manufacturing sector that makes a significant contribution to the Iowa economy.
Based on the operation of the biofuels refineries at year-end 2008, ethanol and biodiesel:
- Adds nearly $12 billion, or about 9 percent, to Iowa GDP
- Generates $2.8 billion of household income for Iowa households
- Supports nearly 83,000 jobs through the entire Iowa economy
- Generates $576 million in state tax revenue
The spending associated with ethanol and biodiesel production stimulates aggregate demand, supports the creation of new jobs, generates additional household income and provides tax revenue for State and local governments.

Boost to IA Economy Potential
- Despite the economic challenges of 2008, the biofuels industry continued to grow and met the federal Renewable Fuels Standard target of nine billion gallons.
- Although the biofuels industry did experience growth in 2008, it too was not immune to the economic difficulties of the time.
- As a direct result of the 2008 economic hardships, 4 ethanol plants with 305 million gallons of capacity and 5 biodiesel plants accounting for nearly 107 million gallons were idled in Iowa at the end of 2008.
- Boosting demand for renewable fuels and operating these plants to their fullest potential will result in:
  - $1.6 billion being added to Iowa's GDP
  - $308 million added to Iowa household income
  - The creation of 9,100 jobs
  - Increasing state tax revenue by $73 million

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Ethanol and Your Vehicle

Ethanol is an alcohol primarily produced from corn that contains octane and oxygen, resulting in a fuel that burns more completely and creates less tailpipe emissions.

Ethanol-blended fuel keeps your fuel system clean for optimal performance because it doesn’t leave gummy deposits. It’s a proven octane enhancer and replacement for lead and other toxic compounds in gasoline. A 10 percent ethanol blend is approved for use by ALL auto manufacturers.

Ethanol is the highest performance fuel on the market with a 113 octane rating. Several national and international racing teams use ethanol because of its high octane and exceptional performance, and the Indy Racing League has adopted ethanol to replace methanol.

Ethanol blended fuels, such as the 10 percent blend, are approved for use in small engines, including outboard motors, snowmobiles, lawn mowers, motorcycles and chainsaws. All small engine manufacturers that have tested a 10 percent ethanol blend have approved its use.

Ethanol guards against gas line freeze by absorbing any moisture that may get in the tank during cold weather, saving consumers money on over-the-counter de-icers.

Ethanol is Good for the Environment

Ethanol lowers harmful carbon monoxide (CO) emissions by 30 percent and reduced carbon dioxide (CO2) emissions by 27 percent.

The use of clean-burning ethanol reduces the amount of noxious fumes and volatile organic compounds (VOCs) that standard gasoline spews into the air. Those VOCs eventually clog our lungs.

Of the more than 200 components in gasoline, ethanol is the safest. Studies have found that ethanol poses no threat to groundwater. Since ethanol is a naturally-occurring substance produced during the fermentation of organic matter, it is expected to rapidly biodegrade in essentially all environments.

The U.S. Environmental Protection Agency credits reformulated gasoline (containing ethanol) with reducing and controlling hazardous emissions, which threaten air quality in many American cities.

The use of 10 percent ethanol blends reduces greenhouse gas emissions by 12 to 19 percent compared to conventional gasoline.

According to the Argonne National Laboratory, vehicles that use ethanol actually help to offset fossil fuels’ “greenhouse gas emissions,” which contribute to global warming, by 35 to 45 percent.

Ethanol Production and Use

A dry mill ethanol plant produces 2.8 gallons of ethanol and 17 pounds of valuable feed co-products called distillers grains from just one bushel of corn.

Ethanol can help control gas prices. Ethanol’s partial excise tax exemption means that consumers get better fuel value and more octane for less money when they use ethanol-blended fuel. Typically, E10 sells for less than regular unleaded. One reason many independent gas stations use high-octane ethanol is that its price efficiency helps them control costs and compete with major oil companies who don’t blend ethanol because it takes away from their gasoline volume.

Ethanol and Energy Security

By 2025, the United States will import 77 percent of its petroleum, according to the Energy Information Administration. Using more ethanol-blended fuels will help reduce the need for imported fossil fuels.

According to a study by the Argonne National Laboratory, the use of corn-based ethanol results in 50 to 60 percent reduction in fossil energy use.

Ethanol is more energy efficient to produce than gasoline. Ethanol production generates 67 percent more energy than it takes to produce.

For every one British Thermal Unit (BTU) of petroleum fuel used to produce ethanol, 13.2 BTUs are generated, which significantly enhances U.S. energy security.

For every barrel of ethanol produced (1 barrel = 42 gallons), 1.2 barrels of petroleum are displaced at the refinery.