Here at Gristmill David has already raised questions about the president’s stated goal “to replace more than 75% of our oil imports from the Middle East” (which accounts for less than a quarter of imported oil) as opposed to trying to reduce total imports, let alone reduce total consumption.
Tom Doggett, a business reporter for Reuters, looks at projections from the Department of Energy and wonders if even that goal would be achieved by the president’s current proposals:
U.S. ethanol supplies will be just 783,000 barrels a day in two decades — a drop in the bucket compared to the more than 26.1 million barrels per day of crude and petroleum products the country will consume, according to the EIA, which is the Energy Department’s analytical arm.
Even if ethanol production were to increase by 2025 to levels sought by the administration, it would not necessarily displace crude oil from the Middle East, because the region has the lowest costs for producing oil in the world and U.S. companies would continue to seek the cheapest source of energy, according to EIA analyst Anthony Radich.
“When I speak of expanding ethanol production it’s not at all clear that it’s going to reduce import dependence,” Radich said.
“Barring some (government) policy that explicitly discourages oil imports, even if we do find cheaper ways to produce cellulose ethanol, the imports from the Middle East are among the last to go,” he said.
Two quick thoughts: First, if Venezuelan or Mexican or Canadian oil remains more expensive to extract than Saudi Arabian oil, we would simply import less from those countries.
Second, if the goal is to achieve energy independence, then seeking alternative supply channels (“technology!”) without addressing demand is a bit like picking a fight with one hand tied behind your back. Your left hook better be really good.