Economic Health and Petroleum Reduction

Maggie Striz-Calnin, Clean Cities Coordinator

24 February 2010

Where does the money we spend on gas and diesel go? In 2008 the top suppliers of oil to the U.S. were Canada, Mexico, Saudi Arabia, Venezuela, Nigeria, and Iraq. The year before, when oil prices were lower than in 2008, Michigan spent an estimated $20.4 billion on petroleum products (source: Moving Beyond Oil, 2009, Frontier Group, et al.)

Can Michigan support our own fuel demand? Here in mid-Michigan we have an ethanol plant in our backyard. Woodbury Ethanol is up and running under new ownership. This facility uses locally grown corn, helping provide farmers with an additional source of income. The state also has biodiesel plants that produce biodiesel fuel blends. Michigan’s biofuels plants currently have capacity to supply 311 million gallons per year (MGY) of ethanol and 111 MGY of biodiesel. Combined with conservation practices, Michigan can make strides toward supporting its own fuel demand. Learn More at DOE website

Aren’t there problems with biofuels? The main complaints related to biofuels production are related to land use, energy use, and food costs. In short, sensitive lands should be protected from development – agricultural or otherwise – to avoid deforestation and endangering biodiversity; biofuels production facilities and crop growing practices should be as energy efficient as sustainable as can be; moving toward advanced biofuels (near commercialization) will reduce the need for feed or food crops used for biofuels. These concerns are all things that can be resolved. Government policies and industry practices are being developed to ensure that domestic fuels are more environmentally friendly and sustainable than petroleum. In fact, the federal government has just come out with clarification on the nations renewable fuel standards. Learn more at the EPA website

How would domestic fuel production impact our economy? 349 MGY of biofuels can be produced in Michigan with current production facilities. Talk about green jobs! The U.S. Department of Energy estimates that for every one billion gallons of ethanol produced, 10,000 to 20,000 jobs will be added. Considering biodiesel capacity in this number paints a nice picture of opportunity for Michigan. A pilot scale cellulosic ethanol plant planned for Alpena, Michigan is expected to bring 160 local jobs. Learn More

Ok, but what about me? Depending on out of state or out of country resources for our energy needs can increase our price at the pump or from the fuel supplier. The costs have a lot to do with how far the fuel is coming from, global demand for the same fuel, and energy costs to extract and refine the fuel. Your household economy can benefit from reductions in fuel costs as domestic fuels become more widely available. Clean, domestic fuels can lead to related savings, too, like a healthier population through healthier air.

Why not drill for more domestic petroleum? The EIA show US proven reserves of oil as of 2008 at about 19 billion gallons. This amount of domestic production would barely cover our own use at today’s levels. Accounting for increased demand for fuel this supply would not meet transportation energy needs alone. Accessing offshore oil beneath the sea and shale oil is expensive and can be highly polluting, and avoids the issue of reducing dependence on this limited resource. Learn More

What are the alternatives? Many alternatives to petroleum for transportation exist, while others are under development. Biofuels (ethanol and biodiesel), hydrogen, electric vehicles, and fuels like propane (liquefied for motor vehicle use) and compressed natural gas or liquefied natural gas are available today. The most accessible alternative is often overlooked, but very easy for most of us to implement – non-motorized transportation options, like walking and biking. Learn More

Is Michigan ready for domestic fuel? Our region is fast becoming a part of the solution, and we can do more. MSU and LCC perform research to get alternatives to petroleum into the market, and train vehicle technicians to service advanced vehicles, like hybrid electric and natural gas vehicles. Area farmers have an opportunity to grow crops sustainably that can be used for biofuels, like switchgrass, soy, and corn. Advanced biofuels you may have heard of, like cellulosic ethanol and biobutanol, are being developed by mid-Michigan groups, like Working Bugs. And, folks like you are learning ways to reduce personal petroleum use through domestic fuels. Keep it up, mid-Michigan!


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