The Oil Drum

As a result of the recent Rolling Stone article on ethanol, I have been getting a lot of e-mails in which the same topics come up again and again. Therefore, I decided to write a comprehensive ethanol FAQ, which will eventually be placed in full here at TOD. Right now, the FAQ is a work in progress on my blog (feel free to provide comments/criticisms), but I will occasionally post various topics here as I work my way through them. Today's topic is the claim:

Ethanol Reduces Dependence on Foreign Oil

It is interesting that this claim is so popular, given that it is so easily shown to be false. From the Renewable Fuels Association's (RFA) "Energy Facts":

FACT: In 2006, the production and use of ethanol in the U.S. reduced oil imports by 170 million barrels, saving $11 billion from being sent to foreign and often hostile countries.

Interestingly, the RFA's page on industry statistics shows that ethanol production in 2006 was 4.86 billion gallons. This is 116 million barrels. Somehow using 116 million barrels of ethanol, with a per barrel BTU value of just over half that of a barrel of oil, displaced 170 million barrels of oil. To be precise, 116 million barrels of ethanol contain the BTU equivalent of 64 million barrels of oil.

There have been many claims in recent years that ethanol is going to help wean us off of fossil fuels. In fact, many of our political leaders claim that as long as we just keep subsidizing the ethanol industry, eventually cellulosic ethanol will take over and we will all motor happily along on E85. We are making energy policy decisions based on this assumption.

As this analysis will show, the data we have to date don't support those kinds of projections. Let's consider the effect to date of the explosive growth in grain ethanol production. The difficulty in producing ethanol from cellulose is probably an order of magnitude greater than it is for producing ethanol from corn. Therefore, it is highly unlikely that the growth curve for cellulosic ethanol production (presuming it is ever commercially viable) will rival that of grain ethanol. So, let's take a look at how gasoline consumption has evolved as we ramped up billions of gallons of ethanol production.