Ethanol Facts: Energy Security
The United States is increasingly dependent on imported energy to meet our personal, transportation, and industrial needs. As a domestic, renewable source of energy, ethanol can reduce our dependence on foreign oil and increase the United States' ability to control its own security and economic future by increasing the availability of domestic fuel supplies. By displacing hundreds of millions of barrels of imported oil, the increasing reliance on domestically-produced ethanol is making available billions of dollars for investment in domestic renewable energy technologies. The increased supply of biofuels worldwide is lowering oil demand, while also helping to mitigate the devasting impacts of volatile oil markets, which reached a record $140/barrel in 2008.
FACT: The U.S. imports 65% its petroleum needs today.
By 2030, the Energy Information Administration (EIA) projects the U.S. will import 70% of its petroleum. And oil prices are not expected to ease soon.
FACT: Two-thirds of the world's known oil reserves are located in the volatile Middle East.
Milton Copulos, President of the National Defence Council Foundation, estimates the U.S. spends more than $137 billion a year on military operations securing the safe delivery of oil from the Persian Gulf. And new oil supplies are getting harder and more expensive to find. Nonconventional reserves, like Canadian tar sands, pose significant environmental and economic risks.
"America's dependence on oil is one of the most serious threats that our nation has faced. It bankrolls dictators, pays for nuclear proliferation, and funds both sides of our struggle against terrorism. It puts the American people at the mercy of shifting gas prices, stifles innovation and sets back our ability to compete."
President Barack Obama, January 26, 2009
FACT: According to the Government Accounting Office, the U.S. has spent more than $130 billion over 32 years in government subsidies to the oil industry.
That does not take into account the billions spent since the turn of the century or the money spent to protect our military troops in the Middle East. (GAO/RCED-00-301R)
FACT: Blended with gasoline at terminals, ethanol can help extend our fuel supply by adding volume to the market.
The production of ethanol also helps to diversify our energy infrastructure with local production of renewable fuels. Bear Stearns analyst Nicole Decker estimates that the 400,000 barrels of ethanol produced daily in 2007 could displace the gasoline output from 2-3 average oil refineries (AP, Jan 2008).
FACT: The production and use of 10.6 billion gallons of ethanol in 2009 displaced the need for 364 million barrels of oil, at a savings of $21.3 billion.
This is the equivalent of eliminating oil imports from Venezuela for 10 months, or looked at another way, it would mean that the U.S. would not have to import ANY oil for 33 days.
Sources: Energy Information Administration; LECG, LLC
FACT: The U.S. ethanol industry is being forced to look beyond U.S. borders for new market growth opportunities.
the U.S. ethanol blending market is nearing saturation and demand has hit what is commonly referred to as the “Blend Wall.” This demand barrier exists because current federal regulations restrict the amount of ethanol that can be blended with gasoline and consumed in conventional automobiles to 10% (E10). As long as this blend wall exists and total gasoline demand remains consistent with recent trends, the domestic market potential for ethanol tops out at approximately 12.5-13.5 billion gallons. Today’s industry has the capacity to produce 13.5 billion gallons of ethanol, with another 1.2 billion gallons of capacity under construction.
Fortunately, a recent surge in U.S. ethanol exports is providing the industry with a much needed new source of demand while it awaits the U.S. EPA’s decision on whether to modify existing regulations and allow ethanol blends higher than 10%. Ethanol exports have boomed in recent months, with shipments going to dozens of energy-thirsty nations around the globe. The United States has been a net importer of ethanol for the last decade, but the nation is quickly evolving into a net exporter. Click here for a May 2010 analysis of rising U.S. ethanol exports.
FACT: Every 1 BTU of petroleum fuel used to produce ethanol generates 13.2 BTUs, greatly enhancing U.S. energy security.
