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 devastating impacts of volatile oil markets, which reached a record $140/barrel in 2008.
FACT: Ethanol is helping to permanently reduce America’s reliance on foreign oil.
According to the Energy Information Administration (EIA), America’s net foreign petroleum dependence peaked in 2005 at just over 60% - the same year the federal renewable fuels standard was enacted. In the seven years since, the increased use of domestic, renewable fuels has been a major force in reducing our net foreign petroleum dependence to under 50%.
FACT: Ethanol now represents 25% of all the fuel for gasoline engines that is refined and produced from domestic sources.
This not only frees up American oil supplies for use in other markets, it also helps to relieve some pressure on the need to dangerously exploit every possible source of petroleum under American soil.
As ethanol production innovates and evolves, greater supplies of increasingly sustainable renewable fuels will be available to displace hard to come by sources of petroleum with dangerous and not understood consequences.
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.
FACT: The 13.9 billion gallons of ethanol in 2011 displaced the need for 485 million barrels of oil, at a savings of $49.7 billion to the U.S. economy. This is roughly the equivalent of 13% of total U.S. crude oil imports.
To put this into perspective, that is a total greater than all the oil we import from Saudi Arabia.
FACT: America’s addiction to foreign oil exposes very real dangers for our economy, environment, and our nation's security.
Military leaders from all branches of the armed forces and all walks of life have recognized this fact.
In an announcement on the importance of biofuels to U.S. military operations, Secretary of the Navy Ray Mabus said, “There are great strategic reasons for moving away from fossil fuels. It’s costly. Every time the cost of a barrel of oil goes up a dollar, it costs the United States Navy $31 million in extra fuel costs. But it’s costly in more ways than just money. For every 50 convoys of gasoline we bring in, we lose a Marine. We lose a Marine, killed or wounded. That is too high a price to pay for fuel.”
FACT: According to the Congressional Research Service, $46.6 billion in tax expenditures has been granted to fossil fuels 1977-2010, and more than $130 billion in government subsidies have gone to the oil industry from 1968-2000, as detailed by the U.S. General Accounting Office.
This 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.
Sources: “Energy Tax Policy: Historical Perspectives on and Current Status of Energy Tax Expenditures,” CRS Report for Congress R41227 (Congressional Research Service, May 2, 2011). [Molly F. Sherlock] “Tax Incentives for Petroleum and Ethanol Fuels,” GAO/RCED-00-301R (U.S. General Accounting Office, September 25, 2000).
"With more research and incentives, we can break our dependence on foreign oil with biofuels...We need to get behind this innovation. And to help pay for it, I'm asking Congress to eliminate the billions in taxpayer dollars we currently give to oil companies. I don't know if you've noticed, but they're doing just fine on their own. So instead of subsidizing yesterday's energy, let's invest in tomorrow's."
Source: President Barack Obama, State of the Union Speech, January 25, 2010.
FACT: Ten of the 11 U.S. recessions since World War II have been preceded by significant oil price spikes.
Rapidly rising oil prices likely contributed to the U.S. economic recession in 2007-2008. Some suggest that every major oil price increase since the 1970s has been associated with a recession.
Source: “U.S. Oil Imports: Context and Considerations,” CRS Report for Congress R41765, Congressional Research Service, April 1, 2011.
FACT: The cost of U.S. oil dependence since 1970 is greater than $8 trillion.
The estimated transfer of wealth to oil producing countries, the loss of U.S. economic potential, and sudden oil price movements cost our society the equivalent of an extra $18 per barrel, or $0.92 per gallon of gasoline.
Source: “Estimating the Energy Security Benefits of Reduced U.S. Oil Imports,” Paul N Leiby, Oak Ridge National Laboratory, 2008.
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). We need to allow for the use of blends above 10%, expand the fleet of flex-fuel vehicles able to use up to 85% ethanol (E85), and ensure the infrastructure exists to dispense these fuels. 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 more than 14 billion gallons of ethanol, with another 140 million 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. 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.
