America Is Off Foreign Oil, No Thanks to Ethanol
America is importing less oil than any time in the last 45 years, no thanks to costly federal support for ethanol.
Federal programs such as the Renewable Fuel Standard (RFS), which requires gasoline sold in the U.S. to contain a certain amount of ethanol, were not responsible for getting America off foreign oil according to a report published Tuesday by the Institute for Energy Research (IER).
“The RFS was justified under several false assumptions, including that American oil production would continue to decline and imports would increase,” Chris Warren, a spokesperson for the Institute for Energy Research, told The Daily Caller News Foundation. “That clearly didn’t happen, as we’ve seen oil production on state and private lands increase dramatically. So much so that since 2008, 82 percent of the total increase in world oil production came from the U.S. That’s the reason imports have dropped.”
In 2005, when America became the largest producer of ethanol, the country imported 60.3 percent of its oil. These days, the U.S. only imports 24.2 percent of its oil. The enormous increase in U.S. oil production is roughly five times the output of all the ethanol distilleries in the country.
America’s ethanol mandates cost motorists $10 billion annually in additional fuel costs, according to a study by the Manhattan Institute.
The decline in oil imports is mostly due to increases in American oil product due to new technologies like hydraulic fracturing, or fracking, and horizontal drilling.
America passed Russia in oil and gas production last year and now produces more oil than any other country. The U.S. produced an average of about 9.3 million barrels of crude oil per day last June. Oil production last year was 80 percent higher than it was in 2008.
Taxpayer support for ethanol mandates and subsidies was originally justified as a way to free America from dangerous dependency on foreign oil, according to the Congressional Budget Office.
Despite the huge oil boom, ethanol production continues to grow. The amount of corn used to produce ethanol in America exceeded the entire corn consumption of Africa or any other single country in the world except China in 2012. Roughly 40 percent of America’s corn crop is used to produce ethanol, according to the IER report.
“It’s true that ethanol production recently hit record levels, but it’s peanuts compared to the increase in oil production,” Warren said. “The RFS is a broken and costly mandate. The only way to fix the program is to scrap it entirely.”
Copyright 2016 The Daily Caller News Foundation
