Global oil production grows at slightly higher pace than ethanol

By Susanne Retka Schill | June 27, 2012

The rate of growth in global oil consumption is declining as ethanol production increases, according to recent reports. The Worldwatch Institute published its analysis of global oil consumption, saying it increased by 0.7 percent in 2011 to reach an all-time high of 88.03 million barrels per day. The rate of increase was considerably slower than in 2010, when oil consumption rose by 3.3 percent following a decline of 1.3 percent in 2009 due to the global financial crisis.

The Global Renewable Fuels Alliance, in cooperation with F.O. Licht, released its global ethanol production forecast June 26, which projects 2012 fuel ethanol production will hit 85.2 billion liters (22.5 billion gallons), up 1 percent from the 84.5 billion liters produced in 2011. Global annual production has now surpassed 536 million barrels of ethanol per year, according to the GRFA.

Global oil production rose at a slightly higher rate in 2011 than the increased ethanol production projected for 2012 ethanol. Global oil production rose for the second year in a row, by 1.3 percent in 2011, to reach 83.58 million barrels per day. Most of this increase was driven by higher production in countries that belong to the Organization of Petroleum Exporting Countries, which overall grew by 3 percent in 2011, according to Worldwatch. Meanwhile oil production in non-OPEC countries fell slightly by 0.1 percent. Oil production growth was slow compared with natural gas and coal production, which grew by 3.1 and 6.1 percent, respectively, in 2011.

In the ethanol analysis, GRFA spokesperson Bliss Baker said the global ethanol industry is a bright spot in the world economy, displacing hundreds of millions of barrels of imported crude in producing countries.  “It continues to grow, supporting nearly 1.4 million jobs and contributing $277.3 billion to the global economy in 2010,” he said. “Policy makers and governments must recognize the significant contribution biofuels are making to the global economy while reducing the world’s foreign oil consumption.”

The United States and Brazil continue to be the largest producers of ethanol with production continuing at a steady pace in 2012. Although production levels in Africa remain relatively low, this region will see the largest increase in production for 2012 which is expected to grow by 36 percent. “Many African economies are net importers of crude oil making them extremely vulnerable to the swings in crude oil prices. Domestic biofuel production will help ease this crippling reliance on oil,” Baker said. “It is encouraging to see some African countries seizing their biofuels opportunity because it will encourage investment in agricultural, create much needed local employment and help reduce their reliance on foreign oil,” added Baker.

In the European region, ethanol production continues to grow at a robust pace, according to GRFA. In 2011, Europe saw its production grow by 4 percent over 2010.  This year, Europe’s production increase will more than double last year’s growth rate. Europe is expected to produce 4.9 billion liters of ethanol, which is an 11 percent increase over 2011.