Believe it or not, there are still some clueless critics out there who have the audacity to claim corn ethanol is “not economical.” Perhaps they haven’t noticed that wholesale ethanol prices have been an average of $0.71 per gallon lower than wholesale gasoline prices so far this year. Maybe they overlooked the fact that ethanol has been priced at 75–80% the price of gasoline for much of the past three years. It’s possible, I suppose, that they haven’t noticed the $1 per gallon spread between ethanol and RBOB gasoline futures prices in April–August 2015.
And maybe they didn’t notice that for the first time in nearly eight years, a bushel of corn—the primary input in the ethanol process—costs less than a gallon of gasoline. That’s right—the price of a 56-pound bushel of corn averaged just $3.57 in July, while the national average price for a gallon of regular gasoline hit $3.61.
Let’s think about what that means from an economic standpoint.
- From one bushel of corn we get at least 2.8 gallons of fuel ethanol. For you BTU counters out there, that means $3.57 worth of corn gives you nearly twice as much usable energy (in the form of ethanol) as you get from $3.61 worth of gasoline. Of course, ethanol’s high octane and oxygen content mean its value goes far beyond its BTU content.
- In addition to the ethanol, we get about 16.5 pounds of high-protein livestock feed from one bushel of corn. This amount of feed—called distillers grains—is enough to produce 10 quarter-pound hamburgers, or roughly 8 pounds of chicken.
- But that’s not all! Most ethanol biorefineries are also extracting about 0.6 pounds of distillers corn oil from every bushel of corn processed. This vegetable oil is used as another animal feed ingredient, or as a feedstock for biodiesel or renewable diesel.
- Many ethanol plants also capture and sell high purity carbon dioxide. This CO2 is used for carbonating beverages, flash freezing frozen grocery items, and a number of industrial purposes. Each bushel of corn processed by an ethanol plant results in about 16 pounds of CO2—enough to carbonate nearly 4,300 cans of soda!
Talk about bang for your buck! Any way you slice it, converting corn to ethanol and distillers grains is a tremendously efficient and economical use of America’s most versatile crop. We did a similar economic comparison last fall when crude oil was $100 per barrel and corn was about $4.65 per bushel. Since that time, ethanol’s competiveness with gasoline has improved even further.
It’s no wonder that ethanol has been able to claim the title as the lowest cost motor fuel and octane source in the world over the past several years.