Ethanol Industry Bright Spot in Economy

This week the RFA released the results of an economic analysis conducted by John Urbanchuk who works for LECG, LLC, a global expert services consulting firm. The report focused on the impact of the U.S. ethanol industry in 2007.

The analysis, conducted by John Urbanchuk of LECG, LLC, determined that 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.â€? The goods and services required to produce the estimated 6.5 billion gallons in 2007 added $47.6 billion to the Gross Domestic Product and raised household incomes by $12.3 billion.

The resulting economic activity from the domestic production of ethanol also paid dividends in the form of lower government expenditures and higher tax revenues. In 2007, the tax incentives provided for the production and use of ethanol totaled $3.4 billion. However, the increased tax revenue collected by the Federal Treasury totaled $4.6 billion. Moreover, state and local governments saw tax revenues increase by $3.6 billion.

As John says in my interview with him, it’s really hard to find a downside to the industry and it’s economic impact. You can read the full release here (pdf).

You can hear my interview with John here: John Urbanchuk Interview (9:00 MP3 file)