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Ethanol in the Presidential Campaign

Ethanol and renewable fuels have received attention in this year’s presidential debates and in the campaign. Specifically, the assertion has been made that one way to balance the federal budget and help solve the economic crisis is to eliminate the tax incentives that have helped to build America’s domestic renewable fuels industry. Such an assertion fails to account for ethanol’s role in reducing our dependence on imported oil, lowering gas prices at the pump, stimulating investment in rural America, creating millions of green jobs, and lowering federal farm program costs. The claim that cutting these programs will save taxpayer dollars is wrong. Federal incentives for ethanol generate revenue for federal and state governments and are saving American consumers money.

Below are just some of the economic benefits realized by an increasingly robust American ethanol industry:

In 2007, the ethanol industry added nearly $48 billion to the nation’s GDP and generated $4.6 billion in federal tax revenues and nearly $3.6 billion in tax revenues for state and local governments.

According to the U.S. Department of Agriculture, the increased demand for grain used in ethanol production reduced federal farm program costs by more than $6 billion.

With clean burning ethanol blended into 70% of the nation’s gasoline, domestic ethanol production has reduced America’s dependence on foreign oil by over 400,000 barrels a day. Several independent analyses have recently concluded the use of ethanol in the U.S. is saving consumers between $0.25 and $0.50 a gallon.

The production and use of 6.5 billion gallons of domestic ethanol in 2007 reduced oil imports by 228 million barrels, saving $16 billion of taxpayer dollars.

These increases in tax revenues and savings in federal program payments and oil imports totals more than $30 billion. That compares to the $3.4 billion that oil companies received for blending ethanol in 2007.

By a factor of nearly 10, the investment in America’s ethanol industry is producing economic and energy security benefits that are unmatched by any other renewable fuel technology today.

Addressing the energy and economic challenges facing this nation is a serious challenge. Eliminating the tax incentives for renewable fuels like ethanol would set this country back in its quest to create new jobs, economic opportunity, and energy security.

For more information on America’s ethanol industry, visit

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