1. Economical Impacts of Ethanol

2. Tax  Partial Excise Tax Exemption- allows marketers to sell the ethanol-blended fuels at a reduced price.  To promote the ethanol industry, the government has allowed ethanol to be produced and sold at a lower tax rate than petroleum fuel.

3. Tax  Ethanol is presently exempt from 5.3 of the 18.3 cents federal gasoline tax.

4. Tax  According to the American Coalition for Ethanol: “The economic activity attributable to the ethanol industry will generate $3.5 billion in additional income tax revenue over the next five years -- $1 billion more than the cost of the exemption. The U. S. ethanol industry will create a net gain to the taxpayers of almost $4 billion over the next five years.”

5. Employment  Ethanol plants are presently employing people in at least 20 states across the country  This industry is responsible for providing 40,000 jobs nationwide  These jobs provide $1.3 billion each year to U.S. families  It is projected that the ethanol industry will provide over $12.6 billion in wages over the next 5 years

6. What this means to the U.S. Economy  Each year the ethanol industry (directly and indirectly) adds $6 billion to the U.S. economy

7. Agricultural Benefits  In 1994, 535 million bushels of corn were used for ethanol production.  In 2001, 667 million bushels of corn were used for ethanol.  The demand for corn and other agricultural commodities created by the ethanol industry increases crop values.

8. Trade  Ethanol production decreases the dependence on oil from foreign countries  Imported oil makes up about 56% of the oil used in the U.S presently  Ethanol production also results in livestock feed co-products, such as corn gluten, which may be traded to foreign countries

9. Economic Concerns of the Consumer  Cost of ethanol-blended gasoline is often the same or lower than standard gasoline to the consumer  Ethanol blending can increase the octane levels of gasoline for a relatively low price  1 gallon of ethanol added to 9 gallons of gasoline will raise the octane level of the gas to the next level (i.e. regular to premium,etc.)

10. References  American Coalition of Ethanol http://www.ethanol.org