June 21, 2010

USDA Releases Corn-Ethanol Industry Report Showing Improving Energy Efficiency

USDA's Chief Economist Joseph Glauber today announced the publication of a report by the Office of Energy Policy and New Uses that surveyed corn growers for the year 2005 and ethanol plants in 2008, which indicates the net energy gain from converting corn to ethanol is improving in efficiency. The survey asked ethanol producers to respond to questions about ethanol yield (undenatured) per bushel of corn and energy used in the plants. The 2008 updates presented in the report recorded the effects of current practices used by corn producers and ethanol processors.

This report measures all conventional fossil fuel energy used in the production of 1 gallon of corn ethanol. For every British Thermal Unit (BTU) unit of energy required to make ethanol, 2.3 BTUs of energy are produced. The ratio is somewhat higher for some firms that are partially substituting biomass energy in processing energy. Since the last study in 2004, the net energy balance of corn ethanol has increased from 1.76 BTUs to 2.3 BTUs of required energy.

According to the report, overall, ethanol has made the transition from an energy sink, to a moderate net energy gain in the 1990s, to a substantial net energy gain in the present. And there are still prospects for improvement. Ethanol yields have increased by about 10 percent in the last 20 years, so proportionately less corn is required. In addition to refinements in ethanol technology, corn yields have increased by 39 percent over the last 20 years, requiring less land to produce ethanol.

The authors of the report are: H. Shapouri, Agricultural Economist, Office of Energy Policy and New Uses, Office of the Chief Economist, USDA; Paul W. Gallagher, Associate Professor, Economics Department, Iowa State University; Ward Nefstead, Associate Professor, Applied Economics Department, University of Minnesota; Rosalie Schwartz, Program and Recruitment Director, Agricultural Economics Department, University of Nebraska (Lincoln); Stacey Noe, Program Coordinator, Agricultural Entrepreneurship Initiative, Iowa State University; and Roger Conway, Former Director, Office of Energy Policy and New Uses, Office of the Chief Economist, USDA.

2008 Energy Balance for the Corn-Ethanol Industry

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