When Congress passed the Energy Policy Act of 2005 and expanded that Renewable Fuel Standard with the Energy Independence and Security Act of 2007, opponents were outraged in their “food vs. fuel” debate.

Moving part of the corn supply toward ethanol will push food prices to all-time highs, and there could be food shortages and, ultimately, food lines. Oh, the humanity of it all.

It never happened.

In fact, annual average food price inflation has averaged 2.3 percent since 2005, when the RFS was enacted, compared to the annual average of 3 percent in the 20 years leading up to RFS adoption.

There’s plenty of corn in the supply chain for food, feed, fuel and fiber. The U.S. Department of Agriculture’s supply and demand estimates report released Feb. 11 projects a corn surplus of 1.735 billion bushels at the end of the current marketing year.

The ethanol industry is also an economic boom for the economy, according to a new study conducted by ABF Economics on behalf of the Renewable Fuels Association. The study’s results were released Feb. 21 at the RFA’s 24th Annual National Ethanol Conference.

According to the analysis, the production and use of 16.1 billion gallons of ethanol in 2018:

  • Supported more than 71,000 direct jobs and almost 295,000 indirect and induced jobs across all sectors of the economy.
  • Added nearly $25 billion in income for American households.
  • Generated an estimated $4.8 billion in tax revenue to the Federal Treasury and $4 billion in revenue to state and local governments.
  • Supported more than 16,200 jobs and $6.3 billion in GDP through exports alone.
  • Displaced an amount of gasoline refined from roughly 550 million barrels of imported crude oil, keeping $36 billion in the U.S. economy.

“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 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.”

The analysis also estimated the impact of the ethanol industry on the state economy in top ethanol-producing states. Iowa, Nebraska and Illinois were the top three states in terms of economic impacts, but states like Ohio, Kansas, Michigan, Texas, Missouri, California and New York also benefited from ethanol plants’ contributions.

According to the Illinois Renewable Fuels Association, Illinois ethanol plants have a capacity to produce 1.98 billion gallons utilizing 684.9 million bushels of corn 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 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,” the study added.

Tom C. Doran can be reached at 815-780-7894 or tdoran@agrinews-pubs.com. Follow him on Twitter at: @AgNews_Doran.

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