Ethanol boom may stifle U.S. gasoline demand

"Some of the foreign gasoline that's currently being imported into the U.S. will have a more logical home to go to those growth markets in other countries," he said.

Bill Day, a spokesman for Valero Energy Corp (VLO.N), the largest U.S. oil refiner, said his company foresees ethanol growth "offsetting gasoline imports to the U.S."

And late last year's energy law mandates cars become more fuel efficient. "God forbid, you have efficiency gains, you're eroding all your sources of gasoline demand," said Lehman's Robinson.

U.S. gasoline demand growth could be hit even further if producers figure out how to economically make low-carbon ethanol out of crop waste and switchgrass, a development many experts say is a decade away.

(Additional reporting by Janet McGurty; Editing by Christian Wiessner)