21-02-04 A boost in US ethanol-blended gasoline supplies, as called for in
stalled energy legislation, would slightly reduce America's oil imports and
increase retail pump prices, a government agency said.
Farm-state lawmakers are pushing for production of more ethanol, made mostly
from corn, because they say it will help diversify domestic petroleum supplies
and make America less dependent on foreign oil. But a new analysis by the Energy
Information Administration could provide ammunition for West Coast and Northeast
lawmakers who fear more ethanol will raise fuel prices for their constituents
and won't have much effect on oil imports.
Pending energy legislation, backed by the White House, calls for the
production of gasoline-blended ethanol to jump from the current 2 bn gallons a
year to 3.1 bn gallons by 2005. It would rise to 5 bn gallons by 2012.
A review by the energy agency, which is the Energy Department's analytical arm,
found higher ethanol production would trim US oil imports by 100,000 bpd, or
just 0.8 % in 2010. It would cut oil imports by an estimated 50,000 bpd, or 0.3
%, in 2015. The United States now consumes about 20 mm bpd of petroleum. Imports
account for almost 60 % of that.
However, the impact of more ethanol usage becomes more important farther in
the future, reducing US crude imports by 230,000 bpd, or 1.2 % in 2025, the
agency projected. The agency said its estimated drop in imports by 2025 would be
partially because of increased ethanol use for transportation fuels. However,
the drop would also reflect reduced demand for gasoline as the result of higher
pump prices caused, in part, by ethanol, the agency said.
Senate Majority Leader Bill Frist, R-Tenn., has said he plans to bring a slimmed
down energy bill up for a vote. The legislation's initial $ 31 bn price tag has
been cut in half to please lawmakers worried about budget deficits.
The bill's provision to provide lawsuit protection for oil companies that
make the water polluting MTBE gasoline additive, forcleaner-burning fuel, was
dropped to win Democratic support. But it remains unclear whether the House
would back the Senate's version.
Rep. Joe Barton, R-Ennis, the new chairman of the House Energy and Commerce
Committee, said the legislation won't pass in the House if the MTBE lawsuit
waiver is removed.
Source: Reuters News Service