# Presentation: 341177

##  Today’s U.S. Ethanol Industry Renewable Fuels SummitBismarck, ND June 12, 2006

## “America is Addicted to Oil”

*“**Goal: to replace more than 75 percent of our oil imports from the Middle East by 2025” *
- George W. Bush
- State of the Union, January 31, 2006

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## Slide 3

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## “America is Addicted to Oil”

***How Much is 75% of Mideast Oil? ***
**EIA = 2.3 million barrels/day (2025)**
**75% = 1.8 million barrels/day**
**approximately 1⁄2 barrel of oil is refined into gasoline...**
**...****so the goal is really about 1 million barrels/day**
**Today we produce 300,000 barrels ethanol per day **
**... ****with 135,000 barrels ethanol per day under construction**

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## “America is Addicted to Oil”

**EIA predicts $56.97 barrel oil in 2030 and beyond ...**
**High oil prices create the appropriate environment for the enhanced use of alternative forms of energy. **
***Hydrogen *****is future alternative to Petroleum (2030)**
***Ethanol***** is the***** ***_**only**_*** *****global viable alternative to Petroleum**

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## “America is Addicted to Oil”

**High oil prices create the appropriate environment for the enhanced use of alternative forms of energy. **
***Hydrogen *****is future alternative to Petroleum (2030)**
***Ethanol***** is the***** ***_**only**_*** *****global viable alternative to Petroleum**

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## Today’s Transportation Fuels 

**Gasoline - 140 billion gallons  **
**Diesel - 45 billion gallons **
**E85 – 10 million gallons **
**Ethanol as an additive (E-10) **
**4.7 billion gallons **
**Extends Gasoline – blended in 40% of gasoline**
**Adds 300,000 barrels of supply **

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## U.S. Ethanol Industry Today

**Economic Development \ Energy Independence**** **
**Annual production record in 2005 of 4.2 bgy**
**102 plants in 19 states with over 4.7 bgy capacity today **
***(300,000 barrels per day) ***
**31 Plants under construction, combined w/ 6 expansions, will add 2.2 billion gallons of new production *****(135,000 barrels per day)***
**Dozens of additional plants in various stages of development**
**3 percent of the U.S. gasoline market and blended into 40 percent of gasoline sold**
**Environmental Stewardship**
**Ethanol use in 2005 significantly reduced dangerous greenhouse gas emissions of 7.8 million tons or the equivalent of removing 1.18 million cars from American highways. **

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## Nationwide Economic Benefits of Ethanol Demand in 2005

**Added $32.2 billion to gross output**
**Created 153,725 jobs in all sectors of the economy**
**Increased economic activity and new jobs from ethanol increased household income by $5.7 billion, money that flows directly into American consumers’ pockets**
**Contributed $1.9 billion of tax revenue for the Federal government and $1.6 billion for State and Local governments.**
**Reduced imports by 170 million barrels of oil, **
**valued at $8.7 billion**

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## Farmers Leading the Fight for Energy Independence

- Rural Revitalization!
- 50% of the 102 current ethanol plants are owned by farmers
- Majority of ethanol plants under development are farmer-driven projects

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## Source:  RFA, January, 2006

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## Slide 12

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## Agriculture as Energy Producers

**In 2005, 1.43 billion bushels of corn (13% U.S. crop) and 15% of nation’s grain sorghum crop used for ethanol**
**Ethanol is the 3rd largest market for corn**
**will equal exports in 2006 at 2.1 billion bushels. **
**Ethanol dry mills produced record 9 million metric tons of distillers grain livestock feed in 2005**

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## What’s Leading Industry Growth?

- Renewable Fuels Standard
- Rising gas and oil prices
- State ethanol programs
- E85 growth
- Concerns about MTBE contamination resulting in new East Coast markets
- Need to expand U.S. fuel supply
- Environmentally-friendly profile

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## Renewable Fuels Standard (RFS)

_**RFS (bgy)**_
- 4.0 in 2006
- 4.7 in 2007
- 5.4 in 2008
- 6.1 in 2009
- 6.8 in 2010
- 7.4 in 2011
- _7.5 in 2012_
**41.9 = Total**

_**2013+**_
- Proportional to renewable fuels/gasoline ratio
- Includes 250 mgy cellulose ethanol requirement
- 4.7% of National Fuel Supply by 2012

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## 						RFA
Year			RFS 		Projections 
2006			4.0		5.1		
2007			4.7		6.6		
2008			5.4		7.9		
2009			6.1		8.6		
2010			6.8		9.3		
2011			7.4		9.9		
2012 			7.5		10.3		

- _Year__	__	__	__RFS __	__	__Projections _
- 2006			4.0		5.1
- 2007			4.7		6.6
- 2008			5.4		7.9
- 2009			6.1		8.6
- 2010			6.8		9.3
- 2011			7.4		9.9
- 2012 			7.5		10.3

**RFS vs. RFA Projections**

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## New technologies reducing energy consumption, improving refinery efficiency, developing new co-products, using new feedstocks
Corn fractionation
Cold starch hydrolysis
Corn oil extraction
Reduced natural gas usage: biomass gasification, fluidized bed reactor, turbines

- Corn fractionation
- Cold starch hydrolysis
- Corn oil extraction
- Reduced natural gas usage: biomass gasification, fluidized bed reactor, turbines

**Technology Moving Industry Forward**

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## Distillers Grains (9 million metric tons)
	Dairy		45%
	Beef 		37%
	Swine 		13%
	Poultry 	 5%

CO2 – Supply 30% of Market

Source:  Commodity Specialists Co. 

**	****Dairy****	****	****45%**
**	****Beef ****	****	****37%**
**	****Swine ****	****	****13%**
**	****Poultry ****	**** 5%**
**CO2 – Supply 30% of Market**
***Source:  Commodity Specialists Co. ***

**Co-Products**

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## Annual Local Economic Impact of a 100 mgy facility

- Spend an estimated $88.2 million for goods and services
- Use 36.4 million bushels of corn
- Operational spending will generate $406 million for the local economy
- Increase the size of the state economy by $223 million
- Generate nearly 1,600 new jobs
- Increase household income by more than $50 million
- 	Source:  “Contribution of the Ethanol Industry to the Economy of the United States,” LECG, LLC, February 2006

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## Global Issues

- Worldwide Development of Renewables
- Energy Independence & Security
- Economic Development
- Environmental Stewardship
- Today = 12.125 billion gallons
- 2010 projected to 17-20 billion gallons

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## Global Issues

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## Global Annual Production Record

- 		**USA ****	****	****4.264 (mgy)**
**	****	****Brazil****	****	****4.227**
**	****	****China ****	****	****1.004**
**	****	****India  ****	****	****0.449**
**	****	****France ****	****	****0.240**
**	****	****Russia  ****	****0.198****	****	**
**	****	****Germany ****	****0.114**
**	****	****South Africa  ****	****0.103**
**	****	****Spain  ****	****	****0.093**
**	****	****UK  ****	****	****0.092**
**	****	****Thailand ****	****0.079**
**	****	****Ukraine ****	****0.065**
**	****	****Canada****	****0.061**
**	****	****Many others ****	****.......**

- Total = 12.125 bgy.

- Source:  F.O. Licht

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## Contact Information:

- Renewable Fuels Association
- (202) 289-3835
- Web site:  _[www.ethanolRFA.org](http://www.ethanolrfa.org/)_

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