Energy independence in striking distance
Energy independence may be closer than we realize. A recent report from the Deloitte Center for Energy, "Energy independence and security: A reality check," points out that the U.S. already enjoys significant energy independence for most sectors and much of our economy. “Transportation is really the only sector that remains dependent on imports; therefore, when people say the U.S. needs a secure supply of energy, what they really mean is a secure supply of crude oil,” the report says.
This is no treatise in support of biofuels, which are mentioned along with other renewables, but not considered in any great detail. There are a couple of points, though, of great interest to biofuels producers.
Digging into the annual report from the Energy Information Administration that tracks all energy sources and their use by each sector, the Deloitte report emphasizes that electricity already is produced from varied fuel sources which are nearly all domestically produced. The transportation sector is a different story, consuming 28 percent of all energy used in the United States, with 93 percent in the form of gasoline, diesel and aviation fuel.
Viewed from a different angle, “Petroleum accounted for 36 percent of the nation’s energy needs in 2011. The transportation sector consumed 71 percent of our oil supplies,” the report says. Unlike other sectors where the energy consumed is largely domestically produced, petroleum supplies rely heavily on imports. But the paper notes that the largest source of petroleum imports comes from our neighbors, Canada and Mexico, at more than a third, and 24 percent comes from OPEC countries not in the Middle East, such as Nigeria and Venezuela.
“To say that the United States needs a secure supply of energy really means a secure supply of petroleum, which currently makes up approximately 36 percent of the overall U.S. energy supply portfolio, less than half of which is imported. When imports from Canada and Mexico are subtracted, the real major energy independence and security challenges of the U.S. energy portfolio amount to between 10 and 15 percent of our overall energy supplies—a challenge that is well within the economic, industrial and policy capabilities of the United States to tackle.”
Is this in striking distance for biofuels? In one way of looking at it, we may not be that close. Remember petroleum accounts for 36 percent of our total energy supplies, of which 71 percent goes into transportation (gasoline, diesel and aviation fuel). Biofuels are just 4 percent of that. Thus biofuels would be less than 1 percent of the total energy supplies.
Looking at it another way, if transportation is the sector most dependent upon imports from unstable regions of the world, and biofuels now comprise about 4 percent of all transportation fuels, it’s quite conceivable that biofuels, plus the growing use of renewables in other sectors, could make a significant contribution to energy independence and security. After all, the RFS calls for 36 billion gallons of renewable liquid fuels by 2022, a little more than double today’s production. Add to that the potential for biomass-based energy for power and thermal needs plus wind, solar and other renewables, we are well within striking distance.
The Deloitte paper continues to make a case for an “all of the above” policy, spending more time talking about the prospects for new oil and natural gas production and the need for greater energy efficiency. Renewables, though, are part of the mix.
For the ethanol industry, however, the omission in the report of a discussion of biofuels’ potential contribution is the most troublesome.