2010 was another record year for American ethanol producers. According to data from the U.S. Energy Information Administration (EIA), daily ethanol production in 2010 averaged nearly 863,000 barrels per day (b/d). That represents 36.24 million gallons of daily production or nearly 13.23 billion gallons of production for calendar year 2010. 2009 ethanol production was 10.75 billion gallons.
American corn farmers are fueling increasing ethanol production. So what?
Economists at Iowa State University found that the growth in ethanol production has caused retail gasoline prices to be $.029 to $0.40 per gallon lower than would have otherwise been the case. The US Departments of Energy and Agriculture found that gasoline would be 20 cents per gallon to 35 cents per gallon higher without ethanol.
A simple calculation of the total US gasoline use of 138 billion gallons times 30 cents per gallon tells us that ethanol is saving American consumers more than $41,000,000,000 at the gas pump and providing the U.S. energy security besides.
According to Bob Dinneen, President of the Renewable Fuels Association, ethanol is reducing our need to import 445 million barrels of oil to refine into gasoline which is more oil than we import from Saudi Arabia each year.
“In today’s volatile oil market, ethanol production is helping to reduce costs for consumers at the pump and is the only measure currently moving America away from imported oil,” said Dinneen.
In our book, that’s what you call a win-win situation.