Here is how oil is currently used. The USA only produces about 30% of the oil that it uses. Strong development of oil shale and new gulf of Mexico oil could increase domestic production to 50% of the current level of oil demand. This could be a difficult level to reach so any biofuel production and substitution would help reduce US oil dependence.
The US would need to eliminate oil usage for heating (14.8%), find some substitutes in some chemical and plastics, make cars 5 times more efficient (32%)and trucks and planes twice as efficient 9.7% and increase overall efficiency by 20% to offset economic growth and increased demand and eliminate oil imports.
Most projection are that the level of US oil production will not rise that much, oil shale and biofuels would have to come out at the optimistic end of projections.
Even complete elimination of oil for cars and trucks (via electric or flex fuel) means that the USA would still be importing oil because of heating and other uses.
Here are my articles related to various aspects of efficiency:
My view of an energy conservation plan proposed by McKinsey and the importance of DOE Freedomcar thermoelectrics for overall efficiency
Home energy efficiency, simple steps for 44-50% less energy usage at equal cost or lower
Transportation improvements from displacing coal usage
Electric guideways and dual mode vehicles
Pulse detonation airplanes are more efficient and other efforts for fuel efficient jets. (lighter planes and better engines)
Robert Zubrin thinks congress should require that all future vehicles sold in the United States be flexible-fueled, capable of using mixtures of methanol, ethanol, and gasoline. Within three years of such a mandate, there would be 50 million such FFVs on American roads.
Dutch inventor G. A. Schwippert, who in 1984 patented an optical sensor that could determine the alcohol content of a methanol/gasoline mixture by measuring the fluid’s index of refraction (light-bending properties). Using this device and the new technology of electronic fuel injection then coming into general use, Nichols and her Ford team devised a scheme whereby a Schwippert sensor would assess the alcohol content of the fuel in real time as it was being fed to the engine. The computer that controlled the car’s electronic fuel injector (EFI) would then determine the correct air/fuel ratio for the mixture of the moment. No matter what the fuel mixture might be, the EFI would always know how much to pump to make the engine operate correctly.
By the end of the 1990s, General Motors had shipped the CEC 1,512 methanol/gasoline flex-fuel vehicles, Chrysler sent 4,730, and there were a handful of Volkswagens, Nissans, Toyotas, and Mercedes-Benzes. Some six million FFVs have been produced to date in America—a number that sounds impressive, and that indeed is quintuple the number of gas/electric hybrid cars in the United States today, but is still dwarfed by the total U.S. fleet of about 230 million cars now on the road.
Our use of gasoline poses health risks, too. According to the Environmental Protection Agency, smoke, soot, and other particulate pollution from cars currently causes approximately 40,000 American deaths per year from lung cancer and other ailments. And as a result of fuel leaks and spills, incomplete combustion, and fumes from ordinary refueling operations, vast amounts of carcinogens and mutagens are released every day, causing an increased incidence of cancer among the general public. The result is many deaths and billions of dollars in health-care costs inflicted on the nation every year. Alcohol fuels do not produce smoke, soot, or particulates when burned in internal combustion engines, and neither methanol nor ethanol causes cancer or mutations.
By 2006, about 70 percent of all new vehicles sold in Brazil were FFVs, and in 2007, the flex-fuel auto market share is projected to approach 90 percent, and it will reach 100 percent fairly quickly since all non-flex-fuel lines are being phased out.
Bush's science advisor, Marburger, and his staff do not want to recommend this because it would cost the American auto industry a total of $150 million to make the necessary conversion. This is less than the United States spends on foreign oil every five hours and because the current administration is philosophically opposed to mandates.
Barrack Obama would mandate that all new vehicles are flex-fuel by the end of first term in office.
Here is a government supplied online flex fuel cost calculator Currently the US government defines flexfuel as whether are vehicle can use E85 (85% ethanol) or regular gas or a mixture of both.
Chrysler's flex fuel vehicles
Ford produced about 250,000 flex fuel vehicles in 2006 Four Ford vehicle models are available as FFVs: the Ford F-150, Ford Crown Victoria, Mercury Grand Marquis and Lincoln Town Car.
GM has flex fuel vehicles as well.
The Speculist has articles on Zubrin's proposed solution and an interview with Zubrin