Competitiveness of the U.S. fuel ethanol industry

Abstract

We present and analyze new data on fuel ethanol production costs in the United States. Industry expansion over the next 5–10 yr and future industry competitiveness are evaluated. The economic potential of near-term and longer-term advances in production technology are assessed. Current ethanol production costs are shown to range from approximately 85 cents/gal to $1.20/gal. For ethanol to be competitive in the 1990s without the Federal subsidy, crude oil prices would have to rise to nearly $40/barrel or more.