Ethanol industry makes significant contribution to the economy

By Renewable Fuels Association | February 14, 2018

The U.S. ethanol industry added nearly $44.4 billion to the nation’s gross domestic product and supported 358,779 jobs in 2017, according to a new study conducted by ABF Economics. The study, released Feb. 14 by the Renewable Fuels Association at the 23rd annual National Ethanol Conference, looked at the contribution of the ethanol industry 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 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.

- According to the analysis, the production and use of 15.8 billion gallons 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 producing ethanol plants accounted for more than 75 percent of the industry’s national GDP contribution and about 73 percent 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,” said RFA President and CEO Bob Dinneen. “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,” he added.

“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 two-hundred-fold and you have an idea of the benefits that the U.S. ethanol industry provides,” he added.

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