Ethanol Helps Keep Gas Prices Down, Money Stateside

With the price of gas skyrocketing and passing $4 per gallon in many parts of the country, ethanol plays a more important role in our energy economy in two separate ways, according to the National Corn Growers Association - by keeping gas prices from getting even higher and by providing a U.S.-based fuel option.

"A number of studies have detailed how ethanol lowers gas prices by as much as 40 cents a gallon," said NCGA President Bart Schott, a corn grower in Kulm, N.D. "It does this by using a renewable domestic resource that keeps money in the U.S. economy rather than sending it overseas."

Merrill Lynch determined in 2008 that without ethanol, oil and gas prices would rise by 15 percent, today that would translate to over 50 cents per gallon. Growth in ethanol production between 1995-2007 caused gas prices to be 29 to 40 cents lower per gallon than would otherwise have been the case, according to Iowa State University. And a LECG study in 2008 found that if ethanol were removed from the world supply, oil prices would increase by an estimated 27.5 percent, or $29 per barrel.

In addition, Schott pointed out, the Institute for Local Self Reliance reports that 75 cents of every dollar spent on biofuels recirculates through the local economy while 75 cents of every dollar spent on oil exits the local economy and, in most cases, the country.

"In looking at our economy, at our high unemployment and federal budget deficit in particular, it is important to stop exporting American jobs and money," Schott said. "Ethanol supports hundreds of thousands of jobs and provides tens of billions of dollars to our national Gross Domestic Product."

According to an analysis of ethanol's economic impact by Cardno ENTRIX, an international environmental and natural resource management consulting firm, the production of 13 billion gallons of ethanol means that the U.S. needed to import 445 million fewer barrels of oil in 2010 to refine gasoline, roughly the equivalent of 13 percent of total U.S. crude oil imports. The value of the crude oil displaced by ethanol amounted to $34 billion in 2010. This is money that stays in the American economy.

Click here for the ethanol economic impact study.

Ethanol: The Right Policy for Combating Oil Prices for Food and Energy Security

The following statement was released by the National Corn Growers Association, the Renewable Fuels Association, Growth Energy and the American Coalition for Ethanol in response to Thursday's Policy Forum on Corn Ethanol Policy in the 112th Congress.

"Any energy policy forum must include comprehensive and adult conversations about America's entire energy agenda, including subsidies and other supportive policies for mature and aging technologies like petroleum. Unfortunately, it is unlikely this 'forum' will include any of those discussions. Rather, this is yet another example of defenders of the status quo wasting the time of Congress focusing on bogus claims against the ethanol industry instead of finding solutions to the real problems.

"Anyone who has filled a gas tank the last few months has unwittingly witnessed the prime cause of soaring prices for all consumer goods, especially food. The last time corn and food prices rose, the Congressional Budget Office found that factors other than biofuels were responsible for as much as 90 percent of the hike. The World Bank and the government of the United Kingdom have concluded that speculation and energy prices were chief drivers of the 2007-08 spikes in commodity and food prices. How anyone can point fingers at farmers for driving up food prices when they receive less than 12 cents of every food dollar defies common sense.

"Ethanol is the only viable solution we have today to help with our country's energy security and independence. Today, when it can easily cost over $50 to fill a gas tank, critics would be wise to remember that domestic ethanol actually has helped motorists by lowering gas prices by estimates as high as 40 cents per gallon. To put it in even better perspective, the value of the crude oil displaced by U.S. ethanol amounted to $34 billion in 2010 - money that stayed in the American economy. In the end, that's the best way to support food and energy security, not through holding make-believe one-sided policy forums."

The group pointed out that, according to the Institute for Local Self Reliance, 75 cents of every dollar spent on biofuels recirculates through the local economy while 75 cents of every dollar spent on oil exits the local economy and, in most cases, the country.

NCGA Task Force Works to Aid Growers with Mycotoxin

Last week, NCGA's Mycotoxin Task Force met with researchers that comprise the Aflatoxin Mitigation Center of Excellence. This joint effort between corn growers and university researchers seeks to prevent economic loss and other factors associated with aflatoxin, a toxic compound produced by naturally occurring fungi in some nuts, oil seeds and grains like corn. The group is looking at all aspects of research, including genetic, chemical, storage, field application, sanitation and feed solutions.

"Originally, the Center was looking to public resources to bring aflatoxin mitigation solutions to the field," said NCGA Mycotoxin Task Force Chairman Don Glenn. "However, due to budget cuts at federal and state levels, the Steering Committee will seek internal funding from participating organizations, related industry partners and grants. We spent considerable time reviewing current and possible research projects and found several positive research avenues."

Current projects funded by the Mycotoxin Task Force include clay improvement in the DDG feed ration of livestock by Texas A&M University and jointly funded genetic research with NCGA's Research and Business Development Action Team conducted by the Danforth Center on aflatoxin free corn. The group also heard a promising presentation on high-level disinfection technologies.

Drought, heat, high humidity and insect infestation are ripe conditions for the aflatoxin-producing fungi that pose a health threat to humans and animals. Although most prevalent in the southern corn growing states, under certain environmental conditions, aflatoxin contamination can have a significant impact on the total U.S. corn crop.

Click here for more information on the Aflatoxin Mitigation Center of Excellence. 

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