Report: Energy efficiency of ethanol continues to improve

By Erin Voegele | February 18, 2016

Reports recently published by the USDA Office of the Chief Economist and the University of Missouri’s Food and Agricultural Policy Research Institute demonstrate that ethanol production continues to become more energy efficient and shows increased production would continue to benefit the farm economy by increasing corn prices, while still providing ample feed for livestock producers.

The USDA report notes there has been a large improvement in the energy balance of ethanol production since 1995. A small, but positive, improvement has also been made since 2008. The report indicates that there is a wide variation in energy balance across refinery configurations, with facilities located in western Iowa achieving the best energy balance. The report also notes that there is a significant potential for a 30-forld improvement in energy balance at cellulosic facilities.

According to information contained in the USDA report, the management of power and drying costs may be important to future improvements in energy balance at ethanol plants. In addition, the report notes biomass power improves variable energy expenditures, and new energy policies would strengthen incentives for biomass conversion.

The FAPRI report is a literature review of ethanol-related studies. It found that the median U.S. corn price impact is 15 cents per bushel increase from 1 billion gallons of corn ethanol, excluding short-run price impacts. The analysis also found that corn production effect suggests that well under half of the increase in corn demand to make additional ethanol is met with greater production, even giving time for supply to respond. Land use estimates were found to vary, with some reports finding higher corn prices can lead to millions of additional corn acreage, with others finding no or limited land use change. In addition, FAPRI found the impacts on livestock, liquid fuels and crop yields are not often reported. However, the limited results were found to support the expected effects of an additional 1 billion gallons of ethanol production. 

"These research reports demonstrate, once again, that America's renewable energy industry has quickly expanded and evolved since President Obama's administration embraced an 'all-of-the-above' energy strategy beginning in 2009,” said Agriculture Secretary Tom Vilsack. “Since then, we have more than doubled renewable energy production, and today we import less than half our oil. Improved and expanded ethanol and biodiesel production have saved Americans money at the pump. Our national security has been bolstered because we are more energy secure and also because our nation's military is a major commercial customer for U.S. biofuels. And, as today's reports demonstrate, U.S. farmers continue to improve their efficiency in the production of corn for ethanol while the impact of ethanol production on corn production has become marginal. Between 1991 and 2010, direct energy use in corn production has dropped by 46 percent per bushel of corn produced and total energy use per bushel of corn by 35 percent. Moreover, between 2005 and 2010, direct energy use fell by 25 percent and the total energy use by 8.2 percent per bushel—meaning that between 2005 and 2010, the energy required per bushel of corn produced dropped by about 5 percent. The bottom line is, today, more energy is being produced from ethanol than is used to produce it, by factors of 2 to 1 nationally and by factors of 4 to 1 in the Midwest. There are many reasons to be optimistic about the future of the bio-economy and the role biofuels and advanced biofuels will play in that future, and I am confident this administration has acted aggressively to expand the groundwork to support that brighter future."

Growth Energy has weighed in on the reports. “The USDA report confirms several things the ethanol industry has been saying for years–efficiency in ethanol production is on the rise. It is clear that corn ethanol has a net positive energy return by factors more than 2 to 1 nationally, and an even greater energy return of 4 to 1 in parts of the Midwest,” said Tom Buis, co-chair of Growth Energy.

“This is welcome news,” explained Buis, “as for years Big Oil and special interests have been attempting to drive a narrative that is simply false in a blatant attempt to maintain their near monopoly on the liquid fuels transportation marketplace.”

 “These reports definitively prove that the misinformation and lies being spread by Big Oil and special interests hold absolutely no merit. Ethanol production has become, and continues to be more efficient,” noted Buis. Furthermore, Buis concluded saying that, “Secretary Vilsack was spot on when he noted that, ‘there are many reasons to be optimistic about the future of the bio-economy and the role biofuels and advanced biofuels will play in the future.’”