New study reflects on Nebraska’s ethanol production capacity growth over last decade

A recent impact study by University of Nebraska-Lincoln economists reveals Nebraska's ethanol production capacity growth between 1995 and 2014 is tenfold. The results of the 'Economic Impacts of the Ethanol Industry in Nebraska' study were released during a press conference on 14 April.

The authors - Dr. Kathleen Brooks, UNL agricultural economics professor; Dr. Dennis Conley, UNL agricultural economics professor; Dr. Eric Thompson, UNL economics professor and Bureau of Business Research director; and Dr. Cory Walters, UNL agricultural economics professor - examined the economic impact of Nebraska's ethanol industry during the last five years.

As of June 2014, Nebraska's production capacity was 2,077 million gallons per year with 1,301 full-time employees at 24 facilities. During the past five years, Nebraska's value of production for ethanol and dried distillers grain with solubles (DDGS) ranged from slightly less than $4 billion (€3.7 billion) to more than $6.6 billion.

'The quantifiable economic impact of ethanol production on the Nebraska economy is clear,' says Paul Kenney, chairman of the Nebraska Ethanol Board. 'But we should also understand the enormous savings in health and environmental costs associated with displacing toxic petroleum products with cleaner burning biofuels like ethanol. Choosing ethanol fuels brings additional cost savings in terms of our health.'

Nebraska's large ethanol production results in 96% (1.805 billion gallons) being shipped out of state and makes Nebraska one of the largest exporters of bioenergy. In addition, 58% of DDGS produced in 2014 were shipped out of state. These out-of-state shipments result in a net positive for the state and represent a direct economic impact by bringing new money into the state economy.

The study noted that Nebraska's ethanol industry could be affected by emerging trends and at least four are worth watching – the recovery of carbon dioxide (CO2), the extraction of corn oil, and world export markets for both ethanol and DDGS.

'Canada imports 40% of the US ethanol exports and China imports 39% of the US distillers grains,' says Todd Sneller, Nebraska Ethanol Board administrator. 'There is a strong demand throughout the world for ethanol and its co-products, so we continue to look for ways to expand the Nebraska market as well as international markets in an effort to bring more economic prosperity to Nebraska.'

The purpose of the "Economic Impacts of the Ethanol Industry in Nebraska" study was to estimate the value of production during five years and compare that value to major commodity production values in Nebraska. In addition, the study measured productive capacity, employment, net returns, in-state utilisation and out-of-state shipments.

View the full study here.

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