1. Renewable Energy The Economics of Ethanol

2. Renewable Energy

3. Alternative Energy Investment Shares

4. US Ethanol Production & Imports

5. Ethanol Reality Check

6. Ethanol

7. Ethanol - Basic Facts U.S. - CornBrazil - Sugarcane Energy balance*1.38.3 Average cost$0.30 per liter$0.22 per liter Production – 20064.6 billion liters Exports – 20063 billion liters Exports – 2025200 billion liters Tax credits$0.51 per gallon Tariff (ad valorem) (secondary) (per liter) 2.5% $0.54 per gallon $0.1427 per liter 20% - *ratio of energy output to energy input claimed by renewable fuels advocates

8. Ethanol – Ad Valorem Tariffs CountryAd Valorem Tariff*Specific Tariff Equivalent U.S.2.5%3.6 cents Canada16%19 cents Brazil20%25 cents E.U.54%65 cents Japan113%135 cents *Source: Renewable Fuels Association, June 30, 2005; assumes a wholesale ethanol price of $1.20 per gallon.

9. Ethanol – Inputs per 1000 liters InputQuantityKcal x 1000Cost ($) Corn2,690 kg2,522284.25 Transport2,690 kg32221.40 Water40,000 l9021.16 Stainless Steel3 kg1210.60 Steel4 kg1210.60 Cement8 kg810.60 Steam2,546,000 kcal2,54621.16 Electricity392 Kwh1,01127.44 95% => 99.5%9 kcal/L940.00 Sewage effluent20 kg BOD696.00 Total inputs6,597$453.21 Total output5,130 Energy Balance0.778 *Source: Pimental, D., and Tad Patzek, “Ethanol Production Using Corn, Switchgrass, and Wood; Biodiesel Production Using Soybean and Sunflower,” Natural Resources Research, March 2005

10. Ethanol vs. Other Renewables Renewable FuelEnergy BalanceUnitsCost per 1000 units Corn Ethanol0.778Liters$453.21 Switchgrass Ethanol0.688Liters$537.00 Wood cellulose Ethanol 0.636Liters$575.00 Soybean biodiesel0.758Kg$1,212.16 Sunflower biodiesel0.459Kg$1,662.48 *Source: Pimental, D., and Tad Patzek, “Ethanol Production Using Corn, Switchgrass, and Wood; Biodiesel Production Using Soybean and Sunflower,” Natural Resources Research, March 2005