Oil Prices Hit Record $115 a Barrel As Ethanol Helps Prevent Higher Prices
Without the expansion of biofuel production and use in the US, Brazil and elsewhere, world oil demand would increase and so would the price. Merrill Lynch analyst Francisco Blanch told the Wall Street Journal that world oil prices would be 15% higher. At today’s record prices, that would equate to $132 per barrel of oil. But that’s not all:
--In 2008, worldwide ethanol production is expected to reach more than 16.2 billion gallons which is equivalent to 1 million barrels of oil per day.
--According to one estimate, as of April 4, the US consumed over 1.9 billion gallons of ethanol, the equivalent of nearly 46 million barrels of oil. Without ethanol, the oil industry would have had to draw down gasoline inventories and import those barrels.
--Without ethanol in America’s gasoline supply, gasoline prices could be more than 25% higher than they are today. Diesel prices, already higher than gasoline, would be another 16% higher.