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Posted on  

December 6, 2001

New Report Demonstrates that Renewable Fuels Standard Will Create Jobs, Increase Energy Security, Boost Farm Income, and Stimulate U.S. Economy

Renewable Fuels Standard Will Create 300,000 American Jobs

WASHINGTON, DC – The Renewable Fuels Association (RFA), National Corn Growers Association (NCGA), and National Biodiesel Board (NBB) have unveiled a new analysis of the economic and energy security impacts of implementing a renewable fuels standard (RFS) of 6.6 billion gallons by 2011, continuing to 8.8 billion gallons by 2016. Several RFS bills along this line have been introduced in Congress, including Sens. Chuck Hagel and Tim Johnson (S.1006), Sen. Tom Daschle (S. 670), Sen. Tom Harkin (S. 892), and Rep. John Thune (HR. 2423). The report demonstrates that implementing an RFS will increase energy security, stimulate the U.S. economy, and boost farm income.

“At a time when ‘energy security’ and ‘economic stimuli’ are objectives of the highest priority for our country, this new study clearly outlines that implementing an RFS will make great strides toward achieving both goals,” said Bob Dinneen, president of the RFA. “The Congress is engaged in an important debate about how to stimulate our economy and reduce our growing dependence on imported oil. Implementing an RFS is a win-win on both issues. America’s farmers are ready, willing, and able to provide a meaningful contribution toward our energy security.”

The report, An Economic Analysis of Legislation for a Renewable Fuels Requirement for Highway Motor Fuels, was completed John Urbanckuk, executive vice president of AUS Consultants. Urbanckuk studied the impact of increasing the renewable content of motor vehicle fuels (such as ethanol or biodiesel) from current levels to four percent by 2016. Implementing such an RFS would lead to the use of 5.8 billion gallons of ethanol in 2011 and 7.6 billion gallons of ethanol in 2016. Key findings of the report are listed below.

Energy and Economic Benefits of an RFS

· Crude oil imports would be reduced by 2.9 billion barrels by 2016 (an average of 302 million barrels annually). This would lower America’s dependence on imported oil to 65 percent compared to the 70 percent projected by the U.S. Department of Energy in 2016.

· Decreasing oil imports reduces the U.S. trade deficit by $63.4 billion through 2016.

· 300,000 new American jobs would be created by 2016.

· U.S. household income will increase $71 billion by 2016.


Agricultural Benefits of an RFS

· The demand for corn used to produce ethanol will increase from roughly 650 million bushels currently to 2.5 billion bushels in 2016.

· The demand for soybeans used to produce biodiesel will increase from 51 million bushels currently to 318 million bushels in 2016.

· Corn prices will increase an average of 28 cents per bushel or 11.1 percent over the baseline.

· Soybean prices will increase an average of 68 cents per bushel or 11.8 percent over the baseline.

· $10.5 billion in new rural economic investments by 2016 to build or expand the renewable fuel production facilities.

· Net farm income will increase an average of $6.6 billion annually or 14.4 percent over the baseline.

· Direct government payments to farmers will be reduced by $7.8 billion through 2016.

“We have a real opportunity to stop the growth in imported energy,” said Dinneen. “The ethanol industry is prepared to build on our growth of the last two years. We urge Congress to take this historic opportunity to enhance energy independence, boost farm income, and promote a renewable, clean-burning fuel – ethanol. We can no longer afford to blindly follow the failed policies of the past. Enacting a meaningful RFS is a bold step toward a better future.”

 

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