Biodiesel and Ethanol

Ethanol Now Accounts for Over 7 Percent of U.S. Gasoline Supply

January 02, 2009

WASHINGTON, D.C. --- Dec. 19 marked the one-year anniversary of the signing of the Energy Security and Independence Act (EISA), which included a section -- the Renewable Fuels Standard (RFS) -- requiring the use of ethanol and other renewable fuels to reduce dependence on foreign oil.

As a result of this landmark legislation, the American biofuels industry has expanded ethanol production capacity from 6.9 billion gallons in 2007 to over 10 billion gallons today, according to the Renewable Fuels Association. Ethanol represents more than 7 percent of the nation's gasoline supply and can be found in more than 70 percent of gasoline gallons sold in the US.

"The RFS provides an important platform for the incoming Obama Administration," said Bob Dinneen, president of the Renewable Fuels Association.

Dinneen added that "the contribution of an expanding ethanol industry to the U.S. economy is significant, particularly in the current economic climate." The production and use of 6.5 billion gallons of homegrown ethanol last year alone added more than $45 billion to the national GDP, helped create more than 238,000 green jobs, and contributed some $12 billion to the bottom lines of America's households, he added.

In addition, Dinneen said, the RFS has provided a critical boost to the production of ethanol from wood chips, switch grass, municipal solid waste and other forms of plant material, such as cellulosic ethanol.

The specific requirements for renewable fuels from feedstocks other than grain are providing security to investors putting up the capital to bring cellulosic ethanol technologies to the marketplace, he said.

"Every American ethanol producer is hard at work reducing their carbon footprint, improving the efficiency of their biorefinery operations, and investing in innovative technologies to convert cellulose to ethanol," Dinneen said. "Although these are tough economic times for America's manufacturing sector, we are confident that the energy and economic stimulus policies of the incoming Obama administration will encourage the production of biofuels, create a more energy efficient economy and build on the success of the Energy Security and Independence Act."

On Dec. 17, the Energy Information Agency stated in its "Annual Energy Outlook 2009" that imports of fuel mostly in the form of oil will account for just 40 percent of the nation's consumption by 2025. Because oil imports are used largely for the production of liquid transportation fuels like gasoline, and not for power generation, the impact of ethanol and other renewable fuels is significant, according to the Renewable Fuels Association. Last year, the production and use of 6.5 billion gallons of homegrown ethanol displaced 228 million barrels of imported oil and resulted in $16 billion spent here at home instead of being sent to foreign oil producers.

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