Ethanol Turning Tide of Oil Dependence

The latest report from the Energy Information Administration (EIA) concludes that ethanol will reduce U.S. petroleum demand by 130,000 b/d in 2008.

According to the EIA’s Short-Term Energy Outlook:
“The slowing economy combined with high petroleum prices is expected to constrain growth in U.S. consumption of liquid fuels and other petroleum products to just 40,000 barrels per day (bbl/d) in 2008. After accounting for increased ethanol use, U.S. petroleum consumption falls by 90,000 bbl/d.�

This news from EIA comes at a time of decreasing U.S. petroleum production and an unabated rise in world oil prices that shows no sign of slowing down. Continued geopolitical instability, growing demand from emerging nations like China and India, and a weakening dollar are all contributing to the meteoric rise of oil prices. EIA estimates crude oil will average $94 a barrel in 2008, up from $72 a barrel in 2007.

“America’s ethanol industry is living up to its end of the bargain by helping reduce petroleum use and moderate prices for Americans at the pump,� said Renewable Fuels Association President Bob Dinneen. “The nearly 8 billion gallons of ethanol being produced on an annual basis today is a vital component of our nation’s gasoline supply, adding volume and helping to mitigate the price increases that will occur as oil continues its meteoric rise.�