The U.S. Department of Agriculture has
concluded that ethanol could successfully replace MTBE nationwide by 2004, with negligible effects on gasoline prices and no disruption in supply. The report, prepared in response to questions raised by Iowa Senator Tom Harkin, assumes MTBE is phased out between
2000-2004 and that the oxygen requirement in reformulated gasoline remains intact.
The study demonstrates that not only is it feasible for ethanol
to replace MTBE nationwide, but it would have substantial positive impacts on
rural economies as demand for ethanol and ethanol feedstocks rises. According to
the report:
- corn demand would increase by more than 500 million bushels
per year beginning in 2004, resulting in an increase in the average price of
corn of about 14 cents per bushel from 2000-2010;
- annual total farm cash receipts will increase $1 billion
annually during 2000-2010;
- increased ethanol demand would reduce the need for emergency
assistance payments and lower loan program spending;
- U.S. trade will be enhanced as the average U.S. agricultural
net export value increase by more than $200 million per year and the import
value of MTBE declines by $1.1. billion per year and $12 billion cumulatively
from 2000-2010; and
-
replacing MTBE with ethanol boosts employment by more than 13,000 jobs.
