Ethanol production in the United States grew from just a few million gallons in the mid-1970s to over 1.7 billion gallons in 2001, spurred by national energy security concerns, new Federal gasoline standards, and government incentives. Production of corn-ethanol is energy efficient, in that it yields 34 percent more energy than it takes to produce it, including growing the corn, harvesting it, transporting it, and distilling it into ethanol.
Growth in ethanol production has provided an economic stimulus for U.S. agriculture, because most ethanol is made from corn. The increase in ethanol demand has created a new market for corn, and agricultural policymakers see expansion of the ethanol industry as a way of increasing farm income and reducing farm program payments, while helping the U.S. economy decrease its dependence on imported oil. Increasing ethanol production induces a higher demand for corn and raises the average corn price. Higher corn prices can result in reduced farm program payments.
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 energy efficiency of producing ethanol compared with just a decade ago. Studies using older data may tend to overestimate energy use because the efficiency of growing corn and converting it to ethanol has been improving significantly over time. The estimated net energy value (NEV) of corn ethanol was 21,105 Btu/gal under the following assumptions: fertilizers are produced by modern processing plants, corn is converted in modern processing facilities, farmers achieve normal corn yields, and energy credits are allocated to coproducts.
Moreover, producing ethanol from domestic corn stocks achieves a net gain in a more desirable form of energy. Ethanol production uses abundant domestic
supplies of coal and natural gas to convert corn into a premium liquid fuel that can displace petroleum imports.
The initial impetus for ethanol commercialization in the United States came when the 1970s oil embargoes exposed the vulnerability of U.S. energy supplies. Fuel ethanol was seen as a gasoline extender; mixing it with gasoline was considered a means of extending the Nation’s gasoline supply. In the 1980s, ethanol established a role as an octane enhancer as the Environmental Protection Agency began to phase out lead in gasoline. Later, ethanol production received a major boost with the passage of the Clean Air Act Amendments of 1990. Blending ethanol with gasoline has become a popular method for gasoline producers to meet the oxygen requirements mandated by the act. Methyl tertiary butyl ether (MTBE), the only other oxygenate used in the United States, may soon be substantially reduced or eliminated, because of its propensity to contaminate ground and surface water. The elimination of MTBE could increase the demand for ethanol significantly.

By: H. Shapouri, J. A. Duffield, M. Wang. (USDA)

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