Wallaces Farmer

Ethanol Helping Americans Battle Back as Crude Oil Hits $100

Corn-based ethanol fuel saves Iowans millions of dollars as petroleum drives up cost of living.

Rod Swoboda 1

January 6, 2008

3 Min Read

With skyrocketing crude oil prices breaking the $100 per barrel mark last week, the Iowa Corn Promotion Board is reminding consumers that corn-based ethanol looks better than ever as a way to help manage America's energy needs.

"There's an easy way for anyone to judge this," says Jerry Main, a corn grower from Fairfield in southeast Iowa, who is chair of the ICPB's industrial usage committee. "Recently, $100 spent on crude oil would yield just 19.5 gallons of gasoline, but $100 worth of field corn delivers 70 gallons of ethanol. That makes ethanol an obvious choice for consumers and corn growers alike."

In response to those who cite ethanol as a small and therefore insignificant contributor to energy independence, Main says, "We don't expect ethanol to be the answer to all our energy problems. But it's a very good tool to battle against high foreign oil prices. It is also the only solution we have today."

You can count on ethanol's benefits

Main emphasizes ethanol's economic benefits in Iowa:

  • By expanding fuel supplies, it takes the edge off energy price increases and lessens the number of U.S. dollars spent on importing foreign oil.

  • By improving corn demand, farmers are able to gain their income from the marketplace. 

  • The money spent on ethanol circulates back into the domestic economy, where it produces local jobs and economic growth. $100 spent on ethanol is $100 spent in the United States, while more than 60% of the crude oil Americans buy comes from outside the U.S.

"We know that buying more foreign oil is irresponsible and a downright bad idea," concludes Main. "Managing our energy needs with domestic dollars and jobs makes sense. Corn-based ethanol is the only tool we have right now to counteract skyrocketing crude oil prices."

E10 ethanol saved Iowans $120 million

When the price of crude oil cracked the $100 a barrel mark on January 2, Monte Shaw also did some calculations. He figured out that Iowa drivers saved $120 million in 2007 by choosing E10 blends (10% ethanol, 90% gasoline). Conversely, crude oil prices rising above $100 per barrel drives up the cost of nearly everything Iowans purchase.

"In 2007, ethanol blended gasoline helped keep $120 million in the pockets of Iowans—to spend on food, medicine, holiday gifts and even movie popcorn," says Shaw, who is executive director of the Iowa Renewable Fuels Association.

"Meanwhile, the rising cost of oil—now over $100 a barrel or just under that mark—is driving up the cost of most consumer goods. Consider that oil is used in processing, manufacturing, packaging and transportation. Almost everything is moved by truck at some point in time. The economic benefits of moving away from petroleum have never been more obvious."

Iowa now has 28 ethanol plants producing

Shaw estimates that Iowans purchased approximately 1.2 billion gallons of E10 gasoline in 2007 at a discount of 10 cents per gallon compared to gasoline without ethanol—equating into $120 million in savings.

"You can learn more about the positive impact of renewable fuels at the second annual Iowa Renewable Fuels Summit on January 31 in Des Moines. The even is free but you must pre-register at www.iowarfa.org/summit.php.

Iowa is the leader in renewable fuels production. Iowa has 28 ethanol refineries with the capacity to produce over 2 billion gallons annually. There are 18 ethanol refineries under construction or expansion that will add 1.6 billion gallons of annual capacity. In addition, Iowa has 16 biodiesel refineries with a combined annual capacity of over 350 million gallons either in operation or under construction. Many additional renewable fuels projects are under development.

About the Author(s)

Rod Swoboda 1

Editor, Wallaces Farmer

Rod, who has been a member of the editorial staff of Wallaces Farmer magazine since 1976, was appointed editor of the magazine in April 2003. He is widely recognized around the state, especially for his articles on crop production and soil conservation topics, and has won several writing awards, in addition to honors from farm, commodity and conservation organizations.

"As only the tenth person to hold the position of Wallaces Farmer editor in the past 100 years, I take seriously my responsibility to provide readers with timely articles useful to them in their farming operations," Rod says.

Raised on a farm that is still owned and operated by his family, Rod enjoys writing and interviewing farmers and others involved in agriculture, as well as planning and editing the magazine. You can also find Rod at other Farm Progress Company activities where he has responsibilities associated with the magazine, including hosting the Farm Progress Show, Farm Progress Hay Expo and the Iowa Master Farmer program.

A University of Illinois grad with a Bachelors of Science degree in agriculture (ag journalism major), Rod joined Wallaces Farmer after working several years in Washington D.C. as a writer for Farm Business Incorporated.

Subscribe to receive top agriculture news
Be informed daily with these free e-newsletters

You May Also Like