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Surprise! The U.S. is now a net fuel exporter

This year is shaping up to be the first since 1949 that the U.S. has exported more fuel than it has imported. And experts say the trend will continue.

This year is shaping up to be the first since 1949 that the U.S. has exported more fuel than it has imported. And experts say the trend will continue.

For the first time since 1949, the U.S. is exporting more petroleum products than we’re importing, according to this story in today’s Wall Street Journal:

The growth in exports is part of a “transformation of the energy system,” says Ed Morse, global head of commodity research at Citigroup Inc. “It’s the beginning signs of a process that will continue for the next decade and will point toward energy independence.”

The country already exports lots of coal and we’re increasingly looking at liquefying natural gas for export too, the story reports. (As I’ve reported, log exports are on the rise, too.)

The article cites numerous reasons for the shift:

  • Higher demand from growing economies overseas (part of the reason we’re not seeing lower prices even though we have excess supply).
  • Our own faltering economy and Americans (including Northwesterners) burning less gasoline;
  • New sources of oil in North Dakota and Texas that are adding to U.S. oil production;
  • New oil refineries in the U.S. are more efficient than those in Europe;
  • New drilling methods can extract oil we weren’t able to access before;
  • Ethanol from corn is offsetting some of the need for gasoline

What? It’s not because environmentally conscious Americans are buying hybrids and electric cars? And what about fuel efficiency? I suppose all of the above could be part of the Americans using less gasoline component.

But this story tells us that even as we’re burning less gas, someone else is burning it instead. Hence, greenhouse gas emissions overall are not going down (they’re going up worldwide, according to this recent report).

Could more biofuel production tilt the balance even further toward the U.S. exporting more fuel than it imports?

The U.S. Renewable Fuel Standard calls for billions of gallons of additional biofuels for transportation by 2022 – 15 billion gallons of conventional biofuel such as corn ethanol; 1 billion gallons of biomass-based diesel; 16 billion gallons of advanced cellulosic biofuels; and 4 billion gallons of other advanced biofuels.

An Oregon State University study released yesterday found all these biofuel mandates would reduce fossil fuel use by less than 2.5 percent – but at a less efficient rate and a much higher cost than other policies.

Combining a gas tax increase with energy efficiency improvements could reduce overall fossil fuel use in the U.S. by more than 15 percent and cut petroleum fuel use by more than 35 percent, the study concludes.

Researchers found producing biofuels requires petroleum products and other fossil fuels too. And it’s a lot more expensive to produce biofuels than to tax gasoline or promote fuel efficiency to reduce gas consumption and the associated greenhouse gas emissions.

“Each dollar spent on energy improvement programs would be 20 times more effective in reducing fossil fuel use and greenhouse gas emissions than a similar cost for the corn ethanol program,” said Bill Jaeger, a professor in the agricultural and resource economics department at OSU and lead author of the study. “Likewise, a gas tax increase would be 21 times more effective than promoting cellulosic ethanol.”

Biofuel Fossil fuels Gasoline consumption Oregon State University

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