While that analysis suggests that emphasizing domestic oil production over foreign imports has some advantages, the authors note that the security premium is minor compared to the current and future direct costs of oil, which the authors project to increase to more than $130 per barrel by 2030. Given that high price, the report concludes that the best policy would be to emphasize reductions in U.S. petroleum consumption, regardless of the source of oil. See the RFF summary and the full discussion paper (PDF 497 KB).
Report Emphasizes Need to Reduce U.S. Petroleum Consumption
The price of oil is currently hovering near $80 per barrel, but that doesn't include the potential economic costs to the US that would be caused by disruptions in oil supply, according to a recent discussion paper by Resources for the Future.
The report estimates the oil security premium for domestically produced oil at about $2.28 per barrel in 2008, rising to $4.45 by 2030, in constant 2007 dollars. In contrast, the oil security premium for imported oil starts at about $4.45 per barrel in 2008 and rises to $6.82 by 2030.
While the analysis suggests that emphasizing domestic oil production over foreign imports has some advantages, the authors note the security premium is minor compared to the current and future direct costs of oil, which they project to increase to more than $130 per barrel by 2030.
Given that high price, the report concludes the best policy would be to emphasize reductions in U.S. petroleum consumption, regardless of the source of oil. See the RFF summary and the full discussion paper (PDF 497 KB).
USDA Guarantees $80 Million Loan to Georgia Biorefinery
The U.S. Department of Agriculture (USDA) announced its first guaranty for a commercial-scale cellulosic biofuel plant. The $80 million loan is for Range Fuels, which is building a cellulosic biorefinery near Soperton, Georgia. DOE is also providing $50 million to support initial construction and will provide another $26 million to support its eventual expansion.
The plant will use heat, pressure, and steam to convert wood chips into synthetic gas. The syngas will be cleaned and passed over a catalyst to yield cellulosic biofuels, such as ethanol and methanol. The first phase should be completed in March and production should begin by June. The plant is expected to produce 20 million gallons of cellulosic ethanol per year, mostly from Georgia pine harvested nearby.
USDA's Biorefinery Assistance Program promotes development of emerging technologies to produce advanced biofuels. See the USDA press release, the Range Fuels press releases, the Biorefinery Assistance Program Web site, and the technology description on Range Fuels' website.
Recovery Act Funds 191 Transit Projects
Vice President Joe Biden announced that 191 new transit projects in 42 states and Puerto Rico will receive over $600 million in Recovery Act funds.
Among the projects: the City of Santa Rosa, California, will use $1 million to buy two hybrid electric buses; Florida's Sarasota County Transportation Authority will spend part of its $4.6 million acquire two 350-foot hybrid buses; and the Michigan Department of Transportation will spend its $168,000 grant to modify buses with mini-hybrid components.
