No abstract

No abstract

No abstract

The fuel ethanol industry relies heavily on the adoption of new technology to reduce its production costs and maintain competitiveness with substitute oxygenates. This article identifies new innovations which are likely to be adopted in the next 10 years. These innovations are incorporated into model plants of 1996 and 2001 and production cost savings over the present is estimated.Demand for oxygenated fuels is growing rapidly due to clean air standards that are being implemented in stages beginning last year. The increased demand for oxygenates will likely increase the demand for fuel grade ethanol, virtually all of which is currently made from corn. As demand increases, ethanol production costs are certain to fall due to new technologies.Ethanol costs about $1.24 per gallon to produce in a new, efficient state-ofthe-art plant if a normal return to investors' capital is included. * We estimate that as innovations are adopted in the next two to five years, the average cost of production in the industry will fall $0.05 to $0.07 per gallon. In 5 to 10 years technologies will be employed that save approximately $0.09 to $0.15 per gallon over present costs. Development of markets for byproducts of ethanol production The views expressed are the authors' and do not necessarily represent policies or views of the USDA.*Calculations of returns within the industry are often made without accounting for implicit costs, such as return on investors' capital. If explicit costs alone are considered, the cost of production is around $1.00 per gallon.

This study uses a computable general equilibrium (CGE) model of the U.S. economy to estimate the economic effects of agricultural fertilizer and pesticide input reductions on individual farm sectors, and on the economy as a whole. The costs of reducing agricultural chemicals using a market-based approach and a command-and-control approach are compared. The real cost to society of restrictng fertilizer and pesticide use by 20-percent across all uses is estimated to be $2.3 billion. A market-based approach that would provide incentives to reduce chemical use in the most cost efficient manner would be about 10-percent less costly. Copyright Kluwer Academic Publishers 1995Agriculture, nonpoint source pollution, pesticide, fertilizer, computable general equilibrium model, chemical charges, tradeable input permits, command-and-control, chemical reduction costs,