Their success is indicated by the fact that ethanol received a 51-cent per gallon subsidy through 2008 and 45 cents a gallon ever since. In addition, cheaper EtOH made in Brazil from sugar cane suffers a 54-cent tariff. But wait! There is more! An escalating government mandate that runs through 2022 requires the production of 37 billion gallons of biofuel (primarily ethanol) in the United States.
All of this support for an unnecessary fuel even before the U.S. became the energy capital of the world, was exposed in 1998 by the late Dr. David Pimentel of Cornell University. While chairing the U.S. Department of Energy Panel to investigate the economics of ethanol production, the panel found that 131,000 British Thermal Units (BTUs) were required to produce a single gallon of ethanol, which only produced 77,000 BTUs when burned. That is a net energy loss of 54,000 BTUs per gallon. But it gets worse.
While some cost is captured by selling the residual dry distillers grain for animal feed, the panel determined that water use and soil erosion required by growing corn had their costs as well.