USDA Report Finds Ethanol Has Economic Benefits for American Families

WASHINGTON, DC – A newly-published report by the U.S. Department of Agriculture found that, under every scenario, American families would benefit economically if the United States were to meet the goals of the Renewable Fuels Standard (RFS).

The study, “Effects of Increased Biofuels on the U.S. Economy in 2022,” concluded that ethanol helps our economy by reducing spending on expensive petroleum-based motor fuels, putting more money back into the budgets of everyday American families.

Quoting from the study:

Replacing higher priced imported oil with domestic biofuels yields greater benefits as consumer spending on motor fuels is reduced. Among all consumer expenditures, those for motor fuels would fall the most, which in turn would encourage greater spending on other goods and services.

Tom Buis, CEO of Growth Energy, the coalition of U.S. ethanol supporters, said the following:

“This quantifies what we have been saying all along: that American ethanol helps American families, not just by creating jobs and cleaning the air, but by putting money right back into the wallets of everyday consumers. Let’s not forget that there is a hidden cost to foreign oil. Every year, our economy sends $1,000 overseas for every man, woman and child to pay for oil. We have the alternative, here today, in American ethanol.”

The report uses several projections by the U.S. Department of Energy on prices: that ethanol would remain at about $2/gallon through 2022, and that oil would range from $80 to $111 a barrel. The authors study several scenarios using those figures, including keeping the 45-cent/gallon tax Volumetric Ethanol Excise Tax Credit (VEETC). They found that in every scenario, the American household would increase its disposable income by increasing the use of ethanol and other biofuels.

“The economics of ethanol are sound. Raising the amount of ethanol we consume in this country not only creates U.S. jobs tied directly to ethanol production, but would create jobs in other industries as American families spend on other goods and services the money they would have been sending overseas,” Buis said.

About Growth Energy

Growth Energy is a group committed to the promise of agriculture and growing America’s economy through cleaner, greener energy. Growth Energy members recognize America needs a new ethanol approach. Through smart policy reform and a proactive grassroots campaign, Growth Energy promotes reducing greenhouse gas emissions, expanding the use of ethanol in gasoline, decreasing our dependence on foreign oil, and creating American jobs at home. More information can be found at