Bad News, Good News
Posted: January 3, 2008
Oil hit $100 a barrel this week for the first time, however briefly, foreshadowing another year of higher gas prices.
That’s the bad news. The good news is that a cost-effective alternative fuel is already commercially availably to help reduce our dependence on foreign oil.
Brian Jennings with the American Coalition for Ethanol says, “For the sake of the nation’s economic health, our New Year’s resolution must be to put the brakes on this costly and risky reliance on oil and accelerate our use of domestically produced ethanol.”
ACE outlines it like this:
The bad news of high oil prices:
The U.S. imports around 12 million barrels of oil per day, resulting in more than $1 billion per day being shipped to foreign oil suppliers.
Gas prices have more than doubled since 2002, costing Americans nearly $300 billion annually.
In spite of the high oil prices, U.S. consumption of gasoline has continued to increase by about 2% annually.
High energy prices directly impact the cost of consumer goods that are dependent upon energy for processing, packaging, and transportation.
As of 2005, petroleum imports accounted for 31% of the U.S. trade deficit, a cost of $220 billion. The Department of Commerce estimates that every $1 billion of trade deficit costs the nation 19,100 jobs.
The good news of ethanol availability:
The use of 36 billion gallons of ethanol, as scheduled in the new RFS, will be enough to drive America’s transportation sector without any oil for at least two full months each year.
Today more than 50% of America’s gasoline contains ethanol.
While no new gasoline refineries have been built in the last 30 years, more than 130 ethanol production facilities have come online and more than 70 new facilities are under construction – providing critical supplies of cost-effective renewable fuel for consumers.
For every barrel of ethanol produced, 1.2 barrels of petroleum is displaced at the refinery.
The combination of reduced farm program costs and increased income tax revenues results in a net gain to the U.S. Treasury of $1.30 per gallon of ethanol produced.
No joke.
