Washington, DC
December 5,  2001

A study sponsored in part by the National Corn Growers Association (NCGA) has concluded that increasing the total gallons of renewable fuels contained in motor vehicle fuels, such as ethanol or biodiesel, from current levels to 4 percent by 2016 would provide energy security and economic benefits to the United States.

"A renewable fuels standard as proposed by Sens. Chuck Hagel, R-Neb., and Tim Johnson, D-S.D., would reduce our dependence on foreign oil, improve our trade deficit, boost farm income, create new opportunities for rural businesses, and reduce farm program costs," said John McClelland, director of energy and analysis for NCGA.

McClelland noted that, in addition to Hagel and Johnson, similar RFS bills have been introduced by Sen. Tom Daschle, D-SD, Sen. Tom Harkin, D-IA, and Rep. John Thune, R-At Large SD.

The analysis by John Urbanchuk of AUS Consultants shows that implementing such a renewable fuels standard (RFS) would lead to the annual use of 7.6 billion gallons of ethanol in 2016.

"That level of ethanol use could reduce crude oil imports by 2.9 billion barrels by 2016, an average of 302 million barrels annually," said McClelland. "That equates to approximately one oil supertanker a day for the next 15 years."

He added, "These reductions in imports 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."

McClelland said the study cited other benefits that could be achieved by 2016:

-- The decrease in oil imports can reduce the U.S. trade deficit by $63.4 billion
-- Create 300,000 new American jobs
-- Increase U.S. household income by $71 billion.

The projected the benefits to agriculture and rural economy include:

-- Use 2.5 billion bushels of corn for ethanol production by 2016. Current U.S. corn production is 9.4 billion bushels of which 650 million bushels are used in ethanol production
-- Corn prices will increase an average of 28 cents per bushel. Net farm income will increase an average of $6.6 billion annually. That could reduce direct government payments to farmers $7.8 billion through 2016
-- $10.5 billion in new rural economic investments by 2016 to build or expand the renewable fuel production facilities. Much of this new investment would be through farmer-owned, value-added businesses

The NCGA, the National Biodiesel Board and the Renewable Fuels Association sponsored the study. The report is available on the NCGA website at www.ncga.com . 

The National Corn Growers Association mission is to create and increase opportunities for corn growers in a changing world and to enhance corn's profitability and usage. NCGA represents more than 32,000 members, 25 affiliated state corn grower organizations and hundreds of thousands of growers who contribute to state checkoff programs.

NCGA news release
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