Ethanol Facts: Energy Security
Reducing America's addiction to imported oil is important not only because of the risk that foreign governments will reduce supplies and raise prices, but also because of the dangers of shipping the oil from troubled regions such as the Persian Gulf.
Ethanol and National Security Brochure
This brochure features quotations from high ranking U.S. officials emphasizing the threat of our dependence on foreign oil with explanations and charts to prove ethanol’s success in reducing our reliance on petroleum. To order, contact Christopher Findlay at firstname.lastname@example.org.
FACT: U.S. dependence on imported petroleum is falling to depths not seen since the early 1990s, and growth in ethanol is the primary reason.
Import dependence in 2013 would have been 41% instead of 35% without the addition of 13.3 billion gallons of American-made ethanol to the fuel supply. The surge in ethanol production has reduced gasoline imports from 600,000 barrels per day in 2005 to near zero today. That means the ethanol produced in 2013 displaced an amount of gasoline refined from 462 million barrels of imported crude oil, which is the equivalent to that imported annually from Venezuala and Iraq combined.
FACT: Growing ethanol supplies have helped reduce prices at the pump for U.S. consumers.
Consumers paid $0.50 - $1.50 per gallon less for gasoline in 2013 because of ethanol, according to Philip K. Verleger, Jr., a renowned economist and former advisor to Presidents Ford and Carter.
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 (RFS) was enacted. In the 7 years since, the increased use of domestic, renewable fuels has been a major force in reducing our net foreign petroleum dependence to under 50%. EIA says ethanol growth since 2005 is "...helping to displace traditional hydrocarbon fuels and so reducing petroleum import needs."
FACT: We are dangerously dependent on petroleum from volatile areas of the world.
Military leaders from all branches of the U.S. armed forces have recognized that our addition to foreign oil presents real dangers to our national security, economy and environment. Secretary of the Navy Ray Mabus has said, "When we did an examination of the vulnerabilities of the Navy and Marine Corps, fuel rose to the top of the list pretty fast. We simply buy too much fossil fuel from actual and potentially volatile places. We would never allow somoe of these countries we buy fuel from to build our ships, our aircraft, our ground vehicles - but because we depend on them for fuel, we give them a say in whether our ships sail, our aircraft fly, our ground vehicles operate."
FACT: Global fossil fuel subsidies reached almost half a trillion dollars in 2010. This figure is up $110 billion over 2009 and could reach $660 billion by 2020.
Source: “World Energy Outlook 2011 Factsheet,” International Energy Agency, October 2011.
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.
Source: “Reassessing the Oil Security Premium,” Stephen P.A. Brown and Hillard G. Huntington, February 2010.
FACT: U.S. ethanol growth has reduced oil imports from the Persian Gulf region by 25% since 2005; however, an increase in oil prices has more than offset the decline in import volumes.
The price U.S. oil refiners paid in 2010 to import barrels of crude averaged 55% higher than in 2005. This price increase has caused oil imports to constitute a larger share of the trade deficit. Greater national oil import dependence can also amplify the negative economic impacts of oil price increases. An increase in the price of crude oil can quickly translate to higher prices for refined oil products like gasoline.
Source: “U.S. Oil Imports: Context and Considerations,” CRS Report for Congress R41765, Congressional Research Service, April 1, 2011.
FACT: Ethanol constitutes a large and growing share of domestically produced fuel for gasoline-powered vehicles.
Ethanol presents the U.S. with a critical opportunity to expand domestic energy production and reduce imports. Ethanol now accounts for one out of every four gallons of fuel offered for gasoline vehicles from domestic energy sources.
FACT: All oil-related external costs are estimated to be $825 billion per year.
The U.S. spends between $27 billion and $137 billion a year on military operations securing the safe delivery of oil from the Persian Gulf, equivalent to adding an extra $1.17 per gallon of gasoline. And new oil supplies are getting harder and more expensive to find. Nonconventional reserves, like Canadian tar sands, pose significant environmental and economic risks.
Sources: “The Hidden Cost of Oil,” Milton R. Copulos, 2007, and “Securing Foreign Oil: A Case for Including Military Operations in the Climate Change Impact of Fuels,” Adam J. Liska and Richard K. Perrin, July/August 2010.
Page last updated March 2014