Ethanol Facts: Economy
The growing ethanol industry provides a significant contribution to the American economy, creating new high-paying jobs, increasing market opportunities for farmers, generating additional household income and tax revenues, and stimulating capital investment.
FACT: In 2010, the U.S. ethanol industry helped employ 400,677 jobs in all sectors of the economy.
Source: Contribution of the Ethanol Industry to the Economy of the United States
FACT: In 2010, ethanol contributed $53.6 billion to the national GDP, added $36 billion to household income, and displaced the need for 445 million barrels of oil.
Source: Contribution of the Ethanol Industry to the Economy of the United States
FACT: The ethanol industry employs a broad cross-section of Americans, paying good wages and providing benefits.
A 2010 Ethanol Producer Magazine survey of the industry found that 73% of industry employees have either a two or four year college degree. 83% reported earning at least $40,000 per year, and 99% reported receiving health care and other benefits, which is well above the national average of 71%.
FACT: Ethanol refineries serve as local economic power houses.
While the national economic impact of ethanol production is impressive, small and rural communities with ethanol facilities nearby see a much more dramatic economic boost. An average 100 million gallon per year ethanol biorefinery provides the following economic benefits to the local economy:
- The goods and services bought and sold as a result of the operation of the ethanol facility add $367 million to the local GDP.
- The economic activity resulting from the ethanol biorefinery help create more than 2,400 new jobs across all sectors. Those include 50 at the biorefinery and more than 1,300 in the agricultural sector.
- The increase in good paying jobs as a result of the facility boosts local household incomes by more than $100 million.
Source: "Contribution of the Ethanol Industry to the Economy of the United States," LECG, LLC, Feb 2008.
FACT: The federal ethanol program generates revenue for the U.S. Treasury.
The federal ethanol incentive, which is available to gasoline marketers and oil companies (not ethanol producers) as an incentive to blend their gasoline with clean, domestic, renewable ethanol, is a cost-effective program. It actually returns more revenue to the U.S. Treasury than it costs, due to increased wages and taxes and reduced unemployment benefits and farm program payments, while at the same time holding down the price of gasoline and helping the American farmer.
In 2010, the ethanol industry contributed $11 billion in tax revenues, including $7 billion to the Federal Treasury and an additional $4 billion to state and local governments. The $11 billion in tax revenue far surpasses the cost of federal tax incentives for ethanol, estimated at $6 billion. Source: Contribution of the Ethanol Industry to the Economy of the United States
The federal ethanol program was established following the OPEC oil embargoes of the 1970s, which exposed our dangerous dependence on imported oil. As an alternative to petroleum, ethanol directly displaces imported oil and reduces tailpipe emissions while helping to bolster the domestic economy. Yet today we import more petroleum than ever before. With rising crude oil prices and increasing international instability, incentives for production and use of domestic ethanol are critical.
We have subsidized the oil industry substantially since the early 1900s, and continue to do so. In fact, according to the General Accounting Office in an October 2000 report, the oil industry has received over $130 billion in tax incentives just in the past 30 years. During this time, U.S. oil production has fallen while annual U.S. ethanol production has grown dramatically.
