Governor's Ethanol Coalition

Iowa Gov. Terry Branstad, Chair * Indiana Gov. Frank O'Bannon, Vice Chair * Missouri Gov. Mel Carnahan, Past Chair

Arkansas Gov. Mike Huckabee
Colorado Gov. Roy Romer
Hawaii Gov. Ben Cayetano
Illinois Gov. Jim Edgar
Kansas Gov. Bill Graves
Kentucky Gov. Paul Patton

Michigan Gov. John Engler
Minnesota Gov. Arne Carlson
Montana Gov. Marc Racicot
Nebraska Gov. Ben Nelson
New Mexico Gov. Gary Johnson
North Dakota Gov. Ed Schafer

Ohio Gov. George Voinovich
Oklahoma Gov. Frank Keating
Puerto Rico Gov. Pedro Rosello
South Dakota Gov. Bill Janklow
Texas Gov. George Bush
Wisconsin Gov. Tommy G. Thompson

News Release
For Immediate release
March 20, 1997

For more information contact:
Larry Bean 515-281-4308

Report on the Economic Impact of the Demand for Ethanol is Released

A newly released study from Northwestern University demonstrates the cost-effectiveness of the federal ethanol program for U.S. taxpayers. The Impact of the Demand for Ethanol, developed by Dr. Michael Evans for the Midwest Governors' Conference, is the most complete and definitive analysis of the macroeconomic impacts of ethanol production and use to date.

"This study validates what we governors in the Governors' Ethanol Coalition have been saying all along, that the federal ethanol program creates valuable jobs and stimulates rural economies at a net savings to the federal budget," said Governor Terry Branstad, Chair of the Governors' Ethanol Coalition. "It is a win-win for the American taxpayer and rural America."

The report demonstrates that the ethanol industry:

Increases net farm income by $4.5 billion;
Boosts total employment by 195,200 jobs, 42,000 of which are in Iowa;
Results in a net savings to the federal budget of $3.6 billion;
Adds over $450 million to state tax receipts, including $111 to Iowa tax receipts;
Improves the U.S. trade balance by $2 billion

The author of the report, Dr. Michael Evans, is a Professor of Economics at the Kellogg School of Management at Northwestern University. Dr. Evans developed the Wharton Econometric Forecasting model and was the founder of Chase Economics.

This report provides information that refutes a recent Government Accounting Office (GAO) report commissioned by Representative Bill Archer of Texas who has attempted to undermine the support for the domestic ethanol industry. Mr. Archer's GAO report focuses almost exclusively on the "so-called" costs of ethanol use and largely ignores the demonstrable benefits of ethanol production and use including those cited in previous GAO reports (GAO/RCED-95-273R; GAO/RCED-90-156) and definitively addressed in The Impact of the Demand for Ethanol by Dr. Evans.

For a copy of the study, The Impact of the Demand for Ethanol, please contact the Governors' Ethanol Coalition at (402) 471-2867.

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Governors' Ethanol Coalition
P.O. Box 95085
Lincoln, Nebraska 68509-5085
(402) 471-2867 phone || (402) 471-3064 FAX
email