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Ethanol

Ethanol Benefits

Ethanol is a renewable, largely domestic transportation fuel. Whether used in low-level blends, such as E10 (10% ethanol, 90% gasoline), or in E85 (85% ethanol, 15% gasoline), ethanol helps reduce imported oil and greenhouse gas emissions. Its use also supports the U.S. agricultural sector. This page describes the benefits of ethanol. For additional details, visit the U.S. Department of Energy Biomass Program's Benefits page.

Increasing Energy Security

About two-thirds of U.S. petroleum demand is in the transportation sector. Sixty percent of U.S. petroleum is currently imported. Depending heavily on foreign petroleum supplies puts the United States at risk for trade deficits, supply disruption, and price changes. Ethanol, on the other hand, is almost entirely produced from domestic crops today. Its use, and that of other alternative fuels, can displace a significant amount of imported petroleum.

Fueling the Economy

Ethanol production is a new industry that is creating jobs in rural areas where employment opportunities are needed. The Renewable Fuels Association's Ethanol Industry Outlook 2008 Report (PDF 4.7 MB) calculated that in 2007 the ethanol industry added $48 billion to gross domestic product and supported the creation of more than 230,000 jobs. Download Adobe Reader. For additional information on the economic benefits of ethanol, see Local Economic Impact of Ethanol Plants (Excel 21 KB) and U.S. Ethanol Plant Ownership and Capacity (Excel 22 KB).

Graph of the Estimated Local Economic Impact of Ethanol Plants, by Ownership. For the absentee (corporate) owned plants, gross state product was $100 million in 2006 and accounted for employing nearly 1,500 people; employment was $80 million in 2006 and accounted for employing 1,000 people; household income was nearly $40 million in 2006 and accounted for employing nearly 500 people. For the farmer-owned plants, gross state product was more than $160 million in 2006 and accounted for employing nearly 2,250 people; employment was $140 million in 2006 and accounted for employing 2,000 people; household income was nearly $80 million in 2006 and accounted for employing nearly 1,000 people.

Source: National Corn Growers Association, 2006 (Excel 21 KB)

Reducing Greenhouse Gas Emissions

The carbon dioxide released when ethanol is burned is balanced by the carbon dioxide captured when the crops are grown to make ethanol. This differs from petroleum, which is made from plants that grew millions of years ago. According to Argonne National Laboratory, on a life-cycle analysis basis, corn-based ethanol production and use reduces greenhouse gas emissions (GHGs) by up to 52% compared to gasoline production and use. Cellulosic ethanol use could reduce GHGs by as much as 86%. For more information, see the Greenhouse Gas Emissions and Energy Balance sections.

To learn more about fuel economy, GHG scores, and air pollution scores for E85-capable flexible fuel vehicles, visit the U.S. Department of Energy/U.S. Environmental Protection Agency's Fuel Economy Guide.