All the more reason, then, to be thankful that some numbers have been crunched over at R^2. Conclusions:
- The corn for one gallon of ethanol costs about US$1.30.
- Energy for processing costs another $0.33
- Enzymes, yeast, and chemicals are $0.14
- Labour and other expenses are $0.23
- Capital depreciation costs are estimated at $0.40
He thus concludes that corn ethanol costs about $2.00 per gallon, not including return on investment. This is also after you subtract the revenue from selling the distillerâ€™s dried grains with solubles (DDGS) grown with the corn but not used for ethanol production. Due to the lower energy density of ethanol, this is equivalent to gasoline for $3 a gallon.
While I certainly wouldn’t bet the farm on the accuracy of those figures, I think there is reason to put more stock in them than in estimates from journalists (who lack expertise) or governments (who often have conflicts of interest). Of course, the issue of whether corn ethanol is cheap or expensive doesn’t bear upon some other vital questions: Does it actually reduce fossil fuel usage? Does it produce fewer greenhouse gas emissions on a lifecycle basis? Does making it raise food prices and starve the poor?