Ethanol: Increasing National Security

By Bob Dinneen | April 11, 2012

America’s addiction to foreign oil has had a significant impact on our economy and our national security. The millions of barrels of petroleum imported to the United States not only cost billions of dollars, they also require putting military lives in danger protecting the fuel supply lines. The only effective strategy for improving U.S. energy security is in reducing the nation’s oil dependence.

At 10 percent of the U.S. fuel supply, used in 97 percent of the nation’s gasoline, ethanol provides a domestic, renewable alternative to imported oil. In 2011, the use of 13.9 billion gallons of American ethanol helped reduce the need for imported oil by 485 million barrels. That is roughly equivalent to 13 percent of total U.S. crude oil imports, saving the American economy $49.7 billion. 

Reducing oil import dependency has been a national security priority and policy objective since the 1970s. Yet, only since 2005, the year the renewable fuel standard (RFS) was first enacted, has the U.S. seen a reversal of the long-term trend of increasing oil import dependence. During this time frame, America’s oil demand has decreased while imports have fallen from 60 percent to 45 percent, in large part due to the increase in domestic ethanol production. In 2010, U.S. oil imports fell below 50 percent for the first time since 1997. Without ethanol, without the foundation of the RFS, our oil imports would have been 52 percent last year. Maintaining critical policies like the RFS is essential to increasing our national energy security.

While gasoline demand is currently at its lowest point in more than a decade, prices at the pump continue to run up due to the increasing cost of crude oil. Nevertheless, prices of gasoline would undoubtedly be higher without the enormous contribution of ethanol in our fuel.  A study by Iowa State University and the University of Wisconsin found that in 2010, domestic ethanol production helped lower gasoline prices by 89 cents per gallon. That means the average American household spent $800 less on gasoline than would have otherwise been the case. The researchers also found that for the first decade of the 21st century, growth in ethanol production and use helped keep gasoline cheaper by an average of 25 cents per gallon. As such, American drivers saved an average of $35 billion annually on gasoline purchases from 2000 to 2010.

The Energy Information Administration recognizes the contribution ethanol has made to increasing national security stating, “increases in domestic biofuels production…played an important role in moderating import dependence.” EIA also says ethanol growth since 2005 is “helping to displace traditional hydrocarbon fuels and so reducing petroleum import needs.”

Ethanol presents the U.S. with a critical opportunity to expand domestic energy production and reduce imports. Today, ethanol is the only commercially viable renewable fuel alternative we have to imported oil. The future of energy independence, and of our security both abroad and at home, is taking place right here, right now, every day, in ethanol plants across this great nation.

Author: Bob Dinneen
President and CEO of the
Renewable Fuels Association
(202) 289-3835