Studies conducted since the late 1970s have estimated the net energy value (NEV) of corn ethanol. However, variations in data and assumptions used among the studies have resulted in a wide range of estimates. This study identifies the factors causing this wide variation and develops a more consistent estimate. We conclude that the NEV of corn ethanol has been rising over time due to technological advances in ethanol conversion and increased efficiency in farm production. We show that corn ethanol is energy efficient as indicated by an energy output:input ratio of 1.34.

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initiated and organized this effort, and provided detailed process modeling for the soybean crushing and biodiesel production technologies. G K. Shaine Tyson, NREL project manager for DOE's Biodiesel Program, provided overview and management for the work and shared her insights based on her experience conducting a life cycle study for ethanol. From the U.S. Department of Agriculture's Office of Energy… G Jim Duffield coordinated this study for USDA, and was the lead contributor to the soybean agriculture portion of the model. G Housein Shapouri, a coauthor of the soybean agriculture section, provided invaluable support in collecting and analyzing USDA's data on soybean farm practices.

Estimates suggest that capital costs typically increase less than proportionately with plant capacity in the dry mill ethanol industry because the estimated power factor is 0.836. However, capital costs increase more rapidly for ethanol than for a typical processing enterprise, judging by the average 0.6 factor rule. Some estimates also suggest a phase of decreasing unit costs followed by a phase of increasing costs. Nonetheless dry mills could be somewhat larger than the current industry standard, unless other scarce factors limit capacity expansion. Despite the statistical significance of an average cost-size relationship, average capital cost for plant of a given size at a particular location is still highly variable due to costs associated with unique circumstances, possibly water availability, utility access and environmental compliance. r

An indicator of competitive position, the cost difference between ethanol import from Brazil with sugar processing and domestic production with corn in the United States under ideal conditions without tariffs in the ethanol market, is developed conceptually. An ex ante version of the indicator that is based on historical prices and today's technology is calculated for the last 30 years and subjected to time series analysis. Results suggest that there are no trends, but there are cyclical periods of advantage for both industries. Further, long-term averages suggest that profits would be similar in both countries under ideal trade conditions. However, the corn wet-milling industry may have slightly higher profits than other processes and locations. Finally, the U.S. dry-milling industry could improve its competitive position using modified corn varieties with high starch content, and using corn residues for biomass generation of electrical and heat energy. [EconLit Classifications: F140, L650, Q420]. © 2006 Wiley Periodicals, Inc. Agribusiness 22: 109-134, 2006.