Massive Increase in Ethanol Production

Description:
Yearly production of Ethanol in the United States since 1980.

Data:

http://www.ethanolrfa.org/

Analysis:
When it comes to fuel - especially for transportation - oil is king. In 2010, the United States imported 180.8 billion gallons of crude oil which doesn't include the amount produced locally. That's a lot of oil!

Although there are many competing factors which drive the demand for foreign oil, there are some which are pushing for a reduction in this dependence. While there are a number of ways to accomplish this, one obvious path lies in replacing oil as a fuel source.

Since the internal combustion engine is ubiquitous in automobiles in the United States (and world-wide for that matter), it is not a simple matter to switch fuels to something like electricity (which does not use internal combustion). In practical terms, it might be advantageous to gradually reduce this oil dependence using the technology already out on the road.

Enter ethanol.

Ethanol is an alternative fuel which is produced from starches via yeast - a technology which has been around since our ancestors figured out how to become intoxicated.  In many parts of the world the starch used comes from sugar cane while in the United States it begins as corn. Since ethanol can be burned in internal combustion engines, it can be added to existing oil-based fuel in varying quantities, thus reducing the amount (and need) for imported oil.

In 2010, the United States produced 13.2 billion gallons of ethanol. That sounds like a lot until you compare it with the amount of imported oil (180.8 billion gallons for the same year).  In other words, for each gallon of ethanol produced locally, the U.S. imports nearly 14 gallons of crude oil.

It will be quite interesting to see how ethanol shapes our future fuel consumption.

Questions:
1) Will production of ethanol continue to increase exponentially?
2) By how much can we reduce our dependence on foreign oil, in practical terms?
3) How has this affected agriculture in the United States?

Code:
This graph was generated using the 'ggplot2' package within the R programming language:

ggplot(us.ethanol.frame, aes(ymin=0, ymax=gallons_millions, xmin=year, xmax=year+0.5, 
      x=year, y=gallons_millions,
      label=gallons_millions)) +
  geom_rect(fill="dark green") +
  geom_text(size=3.5, colour='black', hjust=0.1, vjust=-1) +
  ylab("Quantity (millions of gallons)") +
  xlab("Year") +
  opts(title="Annual United States Ethanol Production",
    legend.title = theme_blank(),
    panel.background = theme_blank(),
    plot.margin = unit(c(0,4,0,0), "lines")) +
  scale_y_continuous(formatter = sep)

Further Reading (the following all have at least 3 stars or are unrated):