commodity boom that resulted in record grain, oilseed, and oil prices by mid-year followed by a

collapse in oil, grain and ethanol prices that erased profitability by year’s end. The industry also had

to contend with a decline in motor fuel demand caused by the combination of record high gasoline

prices in the first half of the year and emerging recession in the second half. Ethanol producers were

affected by the collapse of the financial markets that made access to operating credit and capital for

expansion and new construction virtually unobtainable.

At year’s end, the ethanol industry comprised 172 operating plants in 25 states with production

capacity of 10.6 billion gallons. The economic challenges in 2008 prompted a wave of bankruptcies

including one major producer that closed 12 plants representing nearly 1.2 billion gallons of

capacity. Nationwide, 23 ethanol plants accounting for 1.7 billion gallons of capacity were idled

during the year. Despite the challenge to profitability the ethanol industry continued to grow.

Nationally, total ethanol capacity expanded 34 percent. The ethanol industry met the Renewable Fuel

Standard target of nine billion gallons for 2008 and, despite the bleak economic outlook is poised to

meet future targets.

Nonetheless, the ethanol industry is making a significant contribution to the economy in terms of final demand, job creation, generation of tax revenue, and displacement of imported crude oil. Expansion of the ethanol industry will confirm the industry's position as the original creator of green jobs and will enable America to break its dependence on fossil fuels.   Renewable Fuels Association/LECG, LLC. click here for the complete study.