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Ethanol made from com comprises 10% of U.S. gasoline, up from 3% in 2003. This dramatic increase was spurred by recent policy initiatives such as the Renewable Fuel Standard and state-level blend mandates and supported by direct subsidies such as the Volumetric Ethanol Excise Tax Credit. Some proponents of ethanol have argued that ethanol production greatly lowers gasoline prices, with one industry group claiming it reduced gasoline prices by 89 cents in 2010 and $1.09 in 2011. The 2010 figure has been cited in numerous speeches by Secretary of Agriculture Thomas Vilsack. We show that these estimates were generated by implausible economic assumptions and spurious statistical correlations. To support this last point, we use the same statistical models and find that ethanol production "decreases" natural gas prices, but "increases" unemployment in both the U.S. and Europe. We even show that ethanol production "increases" the ages of our children. Overall, we see no compelling reason to believe that the effect of ethanol use on gasoline prices has been more than $0.10 per gallon. [ABSTRACT FROM AUTHOR]

Abstract: Increased use of ethanol as a vehicle fuel worldwide warrants the need to understand air quality impacts of replacing gasoline with ethanol. This study evaluates the impacts of dedicated E85 (85% ethanol/15% gasoline) light-duty vehicles on emissions, ozone and particulate matter (PM) concentrations in the United States for a future year (2022) using a 3-D photochemical model, detailed emissions inventories that account for changes in all sectors studied, and winter and summer meteorology that occurred in 2002. Use of E85 introduces new emissions from ethanol production and distribution, reduces petrochemical industry emissions due to lower gasoline consumption, changes on-road vehicle emissions and alters biogenic emissions due to land use changes. Three scenarios with increased ethanol production for dedicated E85 light-duty vehicles were compared to a base case without increased ethanol production. Increased use of E85 caused both increases and decreases in ozone and PM, driven mainly by changes in NO x emissions related to biogenic and upstream petrochemical industry sources. In all states modeled, adoption of dedicated E85 vehicles caused negligible change in average higher ozone and PM concentrations of importance for air quality management strategies. Ozone and PM changes are relatively insensitive to how land area is allocated for switchgrass production. The findings are subject to various uncertainties, especially those in vehicle technology and emissions from cellulosic ethanol production. [Copyright &y& Elsevier]

Abstract: Bivariate probit regression and spatial clustering methods analyze investment activity of ethanol plants at the county level for the contiguous 48 United States from 2000–2007. Infrastructure, product and input markets, fiscal policy of local communities, and state and federal incentives determined the location of ethanol plants. The ability to supply feedstock and the absence of previously established ethanol plants dominated the distribution of site selection. Other factors, such as access to railroads or navigable rivers, product markets, lower wages, producer credit and excise tax incentives, and methyl tertiary-butyl ether bans provided some counties comparative advantage with respect to attracting ethanol plants. [Copyright &y& Elsevier]

US ethanol production should exceed 12 billion gallons by 2010, and EISA 2007 mandates 36 billion gallons by 2022, diverting one-third of corn to ethanol and 13% of soybean production to biodiesel. Increased demand will ricochet through other agricultural sectors and alter production patterns and land use in the Corn Belt. This paper discusses effects of biofuel expansion on land and water resources. While US ethanol production will have large effects on international land use, there will likely be conversion of grassland to row crops, increased use of nitrogen fertiliser and pesticides, and increases in soil erosion in the Midwest. [ABSTRACT FROM AUTHOR]