Report Confirms Ethanol's Energy Efficiency

August 2, 2002

A USDA study confirms the energy efficiency of ethanol and its positive role in reducing U.S. dependence on imported oil. The report, "The Energy Balance of Corn Ethanol: An Update," published by USDA's Office of the Chief Economist, concludes that ethanol production is energy efficient because it yields 34% more energy than is used in growing and harvesting the corn and distilling it into ethanol.

The report concludes that the net energy value of corn ethanol has become positive in recent years due to technological advances in ethanol conversion and increased efficiency in farm production. Ethanol produces much more energy than it consumes when compared to other products such as petroleum. Moreover, ethanol production uses abundant domestic supplies of energy to convert corn into a premium liquid fuel that can displace petroleum imports.

Ethanol production has increased in the United States from a few million gallons in the late 1970s to about 1.8 billion gallons in 2001, spurred by national energy security concerns, new federal gasoline standards, and government incentives. The increase in ethanol production has stimulated the U.S. agricultural economy because most ethanol is made from corn. The boost in ethanol demand has created a significant new market for corn.

According to the report, today's higher corn yields, lower energy use per unit of output in the fertilizer industry and advances in fuel conversion technologies have greatly enhanced the economic and technical feasibility of producing ethanol. Studies using older data tend to overestimate energy use because the efficiency of growing corn and converting it to ethanol has improved significantly over the past 20 years.

The report is available on the Web at http://www.usda.gov/oce.