How much does business-as-usual cost? This morning, Green Car Congress reported that the US is projected to pay $440 billion for imported petroleum in 2008:

The increase to the estimated $440 billion for 2008 is based on an average $90 per barrel crude oil price for the year. In 2002, before the current bull market for oil began, US oil imports cost less than $103 billion. The preliminary figures for last year came to some $327 billion.

With little prospect for cheaper gas prices in the future, any decrease in the US export bill will have to come from a reduction in petroleum usage.

Which brings to mind two important questions:

1. What percentage of our Gross Domestic Product will the US have to export before things start to change dramatically?
2. Where is all this money going, anyway?

Wired Magazine’s Autopia blog posted a partial answer to the first question last week ($3 Gas–No, $4 Gas–Will Change U.S. Driving Habits. Really.):

In the past six weeks, gas consumption has dropped by 1.1%. That’s the most sustained drop in 16 years, except for the period following Hurricane Katrina, according to the “Wall Street Journal.” And if prices reach $4, as many economists predict, an estimated 65 percent of American car owners report they will dramatically change their driving behavior, according to a study commissioned by the Automotive Aftermarket Industry Association.

As for the second question, this list from the Energy Information Administration may be helpful. Here are the top 5 countries we import oil from (and export oil money to):

1. Canada
2. Mexico
3. Saudi Arabia
4. Venezuela
5. Nigeria

Forty percent of our total oil imports come from OPEC countries, which means that in 2008 we should be exporting $177 billion to countries that hate the US or actively fund terrorism (more on this later).

But hey, at least there’s a lot of love for our Northern neighbors, eh?

Related Posts:
U.S. Gasoline Still Among World’s Cheapest
6 Ways To Find And Use Biodiesel Anywhere
The Growing Need for Fuel Substitution, Efficiency, and Conservation

Sources:
EIA: U.S. Imports by Country of Origin
GreenCarCongress (Mar. 9, 08): Projection: US to Pay $440B for Imported Petroleum in 2008

Photo Credit

An economic analysis released February 25th shows major gains for the U.S. job market and GDP from 2007’s ethanol industry boom (emphasis added):

The analysis, conducted by John Urbanchuk of LECG, LLC, determined that the increase in economic activity resulting from ongoing production and construction of new capacity supported the creation of 238,541 jobs in all sectors of the economy during 2007. These include more than 46,000 jobs in the U.S. manufacturing sector. The goods and services required to produce the estimated 6.5 billion gallons in 2007 added $47.6 billion to the Gross Domestic Product and raised household incomes by $12.3 billion.

While the gains themselves aren’t all that surprising, they may turn the conventional wisdom that “ethanol subsidies are bad” on its head since increased tax revenue actually paid them off:

The resulting economic activity from the domestic production of ethanol also paid dividends in the form of lower government expenditures and higher tax revenues. In 2007, the tax incentives provided for the production and use of ethanol totaled $3.4 billion. However, the increased tax revenue collected by the Federal Treasury totaled $4.6 billion. Moreover, state and local governments saw tax revenues increase by $3.6 billion.

Here’s to an industry that can’t be outsourced, and it points to a bright future for the renewable fuels industry in the United States. Subsidies arent always just hand-outs — they can be good investments, too. And as we’ve seen lately, new non-food based ethanol and biodiesel technologies may be ready for prime-time soon.

Related Posts:
Europe Faces Biodiesel Feedstock Crunch; Subsidies Play A Role
Popular Mechanics: Ethanol Subsidy Bill Bad News

World-Grain.com (Feb. 25, 2008): Analysis: Ethanol industry was economic bright spot in 2007
See the full report here.

Photo Credit