In a conference call, EPA Administrator Lisa Jackson said the agency looked at the amount of greenhouse gas ethanol emits from start to finish.
She said it includes pollutants released by farm machinery that's used to plant and harvest corn; emissions from ethanol plants; and pollutants released by car and truck engines burning the fuel.
"Everything from how you generate the power that's put into the process, to use of feedstock, matters in terms of your carbon footprint," said Jackson.
The EPA went one step further, though, in measuring the size of that footprint. The agency also measured ethanol's impacts on agriculture worldwide.
The thinking is that using corn to make energy instead of food has changed farming practices across the globe. Farmers in other nations must produce more grain for food to offset U.S. energy production, and those changes release more greenhouse gases.
The EPA's Jackson says the agency found that when those factors are included, ethanol produces 16 percent fewer greenhouse gases than gasoline.
"The idea here is to send a strong signal about what science says is the best way to reduce our greenhouse gas emissions," said Jackson.
Jackson says the EPA study demonstrates that ethanol can play a positive role in efforts to combat global warming.
“Everything from how you generate the power that's put into the process, to use of feedstock, matters in terms of your carbon footprint.”EPA Administrator Lisa Jackson
That's important to Minnesota's ethanol industry, which employs more than 1,000 workers and buys more than $1 billion worth of corn each year.
But some environmental groups question how much ethanol helps reduce global warming. They say the EPA's own data supports their position. The debate is over which EPA number you believe.
Kate McMahon with Friends of the Earth questions whether ethanol is really 16 percent better than gasoline.
"That figure looks at emissions over a 100-year timeframe," said McMahon.
McMahon says when farmers break new cropland anywhere in the world to grow corn or other grains, there's an immediate global warming impact. Breaking the ground releases a burst of greenhouse gases. By spreading that initial burst over 100 years, the EPA puts ethanol in its most favorable light.
But the agency also ran a second scenario, a 30-year timetable. Kate McMahon says in the shorter time frame, ethanol actually produces more pollutants than gasoline.
"You're going to get an increase of 5 percent of greenhouse gas emissions over gasoline," said McMahon.
She says figuring the shorter time frame makes more sense, since it's unlikely corn ethanol production will last 100 years. Even the EPA calls it a temporary bridge to more efficient alternative fuels.
Environmental groups are not alone in criticizing the EPA study. The ethanol industry also doubts some of its claims.
Renewable Fuels Association President Bob Dinneen questions the accuracy of the EPA's analysis of worldwide farming changes linked to U.S. ethanol.
"What EPA essentially has done is taken three different models and cobbled this together, to try to make some projections about international land use impacts," said Dinneen.
Dinneen says ethanol's international impact should be left out of the EPA study; he says there simply is not enough detailed information available to support the EPA's conclusions.
Dinneen says if ethanol-produced greenhouse gases are measured for the U.S. only, the fuel easily beats gasoline. Dinneen says under that analysis, ethanol releases 61 percent fewer global warming pollutants than petroleum products.
EPA's final decision on how much ethanol contributes to global warming is still months away, but it could have a big impact.
Congress has mandated that ethanol must produce 20 percent fewer greenhouse gases than gasoline or risk reductions in federal support.