Dependence, Consumption, Reserves, and Security

US OIL Consumption Ninety-five percent of transportation fuels are derived from petroleum, the majority of which is imported. The numbers tell the story. U.S. daily petroleum consumption for all sectors reached nearly 19.5 million barrels in Ten and a half million barrels per day, or 54% of total consumption, went to the transportation sector.  In the United States 205 million people are registered drivers. Registered drivers have registered 247 million vehicles.  Drivers purchased billion gallons of fuel (gasoline plus diesel sales) in 2008 — an annual average per car consumption of 805 gallons.  Gasoline makes up the majority of passenger fuel sales—accounting for 62% of the fuel mix or 138 billion gallons of gasoline per year.  Every day, U.S. drivers fill up 35 million times and drive 8.2 billion miles on 441 million gallons.

US Consumption, Production, and Importation Trends since the 70’s

Gasoline Use is Fueling our Trade Imbalance A nation’s trade balance is the value of all goods and services sold to other countries (exports) minus the value of all goods and services purchased from other countries (imports).  The U.S. trade balance has run in the red since 1975  In 1976, the trade deficit was $6 billion.  In 2005, it was $716 billion.  Petroleum products are the largest component of U.S. imports and accounted for 31% of the deficit.  In 2005, the U.S. imported 310 million barrels of petroleum at a cost of $18.5 billion each month. Annual basis = $220 billion for imported petroleum products.

Legislative History  Energy Tax Act of 1978  granting gasoline blended with 10% ethanol a total exemption from the four cent per gallon federal fuel excise tax.  Crude Oil Windfall Profit Tax Act of 1980 and the Energy Security Act of 1980  promoted energy conservation and development of domestic fuels.

Legislative History Con’t  Surface Transportation Assistance Act 1982  Raised the federal gas tax from four cents to nine cents and increased the partial exemption for 10% ethanol blends to five cents  Tax Reform Act 1984  raised the ethanol exemption to six cents per gallon  Omnibus Budget Reconciliation Act 1990  decreased the ethanol tax incentive from six cents to five cents

AND...  Clean Air Act in 1990  New standards required the use of fuel additives called oxygenates = ethanol  American Jobs Creation Act 2004  federal excise tax exemptions for ethanol blends with a tax credit called the Volumetric Ethanol Excise Tax Credit (VEETC). Cost $2.5 billion in Savings in crop payments to farmers. In 2006 high corn prices caused by ethanol demand reduced farm support payments ($ 6 Billion in 2006). Energy Policy Act of 2005 Energy Policy Act of 2005  Renewable Fuel Standard (RFS) requiring the use of ethanol and other biofuels in the U.S. fuel supply and creating tax incentives for E85 fueling infrastructure  requires an annual increase in biofuels use to 7.5 billion gallons by 2012.

Finally...  Energy Independence and Security Act EISA requires 36 billion gallons of renewable transportation fuels per year by 2022.

WHY?