January 06, 2008

Biofuels Helped Lower 2006 Petroleum Consumption

For some time certain groups have attempted to downplay and in some cases flat out deny that biofuels are playing a role in reducing our dependence on petroleum. But looking at the numbers from the last two years shows that biofuels are indeed playing a role in reducing our dependence on petroleum.

First let's look at domestic oil production. It has been steadily declining over at least the last few years.

2006 - 1,862,259,000 barrels
2005 - 1,890,106,000 barrels
2004 - 1,983,302,000 barrels
2003 - 2,073,453,000 barrels
2002 - 2,097,124,000 barrels

Next let's look at petroleum imports. As domestic production has fallen off more and more oil has had to be imported.

2006 - 5,003,082,000 barrels
2005 - 5,005,541,000 barrels
2004 - 4,811,104,000 barrels
2003 - 4,476,501,000 barrels
2002 - 4,208,538,000 barrels

We also will need to look at exports for each year as well.

2006 - 480,561,000 barrels
2005 - 425,190,000 barrels
2004 - 383,636,000 barrels
2003 - 374,710,000 barrels
2002 - 359,077,000 barrels

Now to get an idea of just how much oil was used in each year, we need to add together domestic production and imports and subtract exports.

2006 - 6,384,780,000 barrels
2005 - 6,470,457,000 barrels
2004 - 6,410,770,000 barrels
2003 - 6,175,244,000 barrels
2002 - 5,945,585,000 barrels

As you can see the overall amount of petroleum used in this country steadily increased until 2006 when it dropped off. Now of course one might assume that gasoline sales went down in 2006 but that is not the case. To see how much gasoline was consumed let's look at the Finished Motor Gasoline supplied.

2006 - 3,377,174,000 barrels
2005 - 3,343,131,000 barrels
2004 - 3,332,579,000 barrels
2003 - 3,261,237,000 barrels
2002 - 3,229,459,000 barrels

The amount of gasoline consumed in 2006 continued to rise even though petroleum consumption declined. Since the Finished Motor Gasoline number includes gasoline blended with ethanol, this to me is indication that ethanol is adding to the fuel supply. To further illustrate this point let's look at the numbers for ethanol production and imports. Just to save a little time and space the next set of number will be for both domestic production and imports of ethanol.

2006 - 5,377,400,000 gallons
2005 - 4,048,900,000 gallons
2004 - 3,530,000,000 gallons
2003 - 2,900,000,000 gallons
2002 - 2,085,000,000 gallons

As you can see between 2005 and 2006 there was a large jump in ethanol consumption. This is partly due to ethanol replacing MTBE in gasoline. This also corresponded to a large jump in biodiesel production.

2006 - 250,000,000 gallons
2005 - 75,000,000 gallons
2004 - 25,000,000 gallons
2003 - 20,000,000 gallons
2002 - 15,000,000 gallons

Just like with most situations, there were more things involved than just the increased production of biofuels. Since prices through 2005 and 2006 were so high people were taking steps to conserve fuel. People switching to more fuel efficient vehicles, lower air travel, and less heating oil use due to mild weather all contributed to lower petroleum consumption as well.

But the contribution of biofuels and especially ethanol was noticeable. Even the American Petroleum Institute noted this in it's 2006 Summary.

The year’s higher volume of gasoline deliveries was, in effect, met entirely by a substantial jump in the blending of ethanol into gasoline. Ethanol use in gasoline rose by more than 1 billion gallons, or nearly 35 percent, to an estimated 5.4 billion gallons in 2006. More than 40 percent of all gasoline consumed in the U.S. now includes ethanol.

Overall the use of biofuels coupled with conservation efforts is starting to reap rewards. It will be interesting to see what the numbers for 2007 look like once they come out.


Definitions, Sources and Explanatory Notes
Crude Oil Production
U.S. Imports by Country of Origin
Product Supplied
Renewable Fuels Association: Industry Statistics
US Biodiesel Demand
API 2006 Summary


American Biofuels said...

Great report. That is surely one way to cut into the trade deficit. Bring on the biofuels.

American Biofuels said...

The figures for 2007 should look even better.

Michael A. Gregory said...

Thanks. The 2007 numbers should be finalized in about 2 months.

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