ethanol plant in corn fields Jim Parkin iStock

Ethanol industry making 'significant contribution' to economy

Analysis finds U.S. ethanol industry added $44.4 billion to nation’s GDP and supported 358,779 jobs.

The U.S. ethanol industry added nearly $44.4 billion to the nation’s gross domestic product (GDP) and supported 358,779 jobs in 2017, according to a new study conducted by ABF Economics. The study, released by the Renewable Fuels Assn. (RFA) at the 23rd annual National Ethanol Conference, looked at the ethanol industry's contribution to the economy of the nation and individual states in 2017.

“The ethanol industry continues to make a significant contribution to the economy in terms of job creation, generation of tax revenue and displacement of crude oil and petroleum products,” the study report noted. “The importance of the ethanol industry to agriculture and rural economies is particularly notable. Continued growth and expansion of the ethanol industry through new technologies and feedstocks will enhance the industry’s position as the original creator of green jobs and will enable America to make further strides toward energy independence.”

According to the analysis, the production and use of 15.8 billion gal. of ethanol last year:

·         Supported nearly 72,000 direct jobs and nearly 287,000 indirect and induced jobs across all sectors of the economy;

·         Added more than $24 billion in income for American households;

·         Generated an estimated $5 billion in tax revenue to the Federal Treasury and $5.7 billion in revenue to state and local governments;

·         Supported almost 15,000 jobs and nearly $6 billion in GDP through exports alone, and

·         Displaced 532 million barrels of imported oil, keeping $26.9 billion in the U.S. economy.

For the first time, the analysis also estimated the impact of the ethanol industry on the economy of each state with operating ethanol plants. The 26 states with ethanol production plants accounted for more than 75% of the industry’s national GDP contribution and about 73% of national employment and household income.

Iowa, Nebraska and Illinois were the top three states in terms of economic impacts, but states like Mississippi, Idaho, Virginia, Kentucky, Pennsylvania, Oregon and New York also benefited from the presence of ethanol plants, while all 50 states enjoyed indirect and induced job creation and GDP from ethanol.

“As these figures show, the U.S. ethanol industry is unquestionably a significant contributor to our economy,” RFA president and chief executive officer Bob Dinneen said. “Our industry supported nearly 360,000 jobs last year and displaced a substantial amount of imported crude oil, bringing high-paying jobs to rural communities across the nation. The U.S. ethanol industry is an undeniable economic powerhouse, benefitting consumers throughout the country.”

“Unequivocally, the ethanol industry boosts all sectors of our economy,” said economist John Urbanchuk, the study’s author and a managing partner at ABF Economics. “For example, an ethanol plant in Iowa doesn’t just benefit local and state residents; its contributions spread throughout our nation, adding to the U.S. gross domestic product and reducing our reliance on imported oil. Now, magnify that one ethanol plant’s contributions by more than 200-fold, and you have an idea of the benefits that the U.S. ethanol industry provides.”

The full study, prepared by RFA, is available here.


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