By Todd Foley 8/06/2013
As we have witnessed over the past decade, the American energy landscape continues to transform. Not so long ago, energy scarcity was a significant concern, especially for transportation fuel as the petroleum supply decreased. As a result, in 2005 our nation wisely chose to diversify our fuel supply with strong bipartisan leadership from American policymakers. At that time, under George W. Bush, we created one of the most successful energy policies ever enacted– the Renewable Fuel Standard (RFS).
Even though in recent years the supply of domestic petroleum has increased, the volatile price of gasoline is out of our control and seems to climb every day. Right now gas prices are too high, especially for hard-working American families and small businesses; and it’s not getting better even as we drill for more domestic oil. Oil is a globally traded commodity and will be priced on the global market, forever. So even as petroleum supplies increases, the RFS is still a much needed policy to protect Americans from higher fuel costs. .
Every day in most parts of this country, Americans have no choice but to buy petroleum-based gasoline. But due in large part to the RFS, the situation has the possibility to get a lot better for all Americans. Currently, 10% of our fuel supply comes from ethanol, which saves consumers money at the pump. Right now, national gas prices are at $3.70 a gallon and rising. If we didn’t have the RFS and 10% of our fuel didn’t come from ethanol, a gallon of gas would instead hover around $4.00 a gallon. Also, because of increased ethanol production, many drivers in the Midwest are using blends of fuel like E30 – an American- ethanol blended fuel – for about $3.50 a gallon! That, combined with the increased deployment of flex fuel vehicles (FFVs), has provided some much-needed relief at the pump.
The goal of the RFS policy is unusually simple: to drastically decrease our dependence on an expensive fuel that is also an enormous greenhouse gas emitter. The RFS needs to continue so other cleaner, cheaper, and sustainable fuel sources gain market penetration. Cellulosic biofuels and other types of advanced biofuels are coming online across 20 states and have the potential to deliver steep cost reductions in the price of fueling up a vehicle. But as we all know, some of the incumbents of the transportation fuel sector are trying to stop this progress. The market has been dominated by petroleum for a century – making these incumbents ready to fight at all costs to block market penetration from competitors.
Efforts to besmirch and derail the growth of renewable fuels are at full throttle. Myth-based campaigns stating, “Ethanol damages cars and increases gas and food prices,“ abound on the airways. Unfortunately for the oil industry, the real facts show that most cars on the road – made in 2001 or after – can use E15 in their engines without sacrificing performance or risking engine damage. A majority of Americans also understand that gas prices are high and will remain high because of petroleum, not ethanol. In fact, recent polling shows that 73% of Americans support the RFS. So despite the ads claiming that ethanol is driving up gas prices and in turn food prices, Americans understand there is no correlation between increased food prices and increased ethanol production. Instead they see what numerous studies have shown, that there is a direct correlation between increasing gas prices and increasing prices for milk or bread at the grocery store.
The RFS is achieving the primary goal it was enacted to achieve– reducing the need for petroleum by billions of gallons of per year while decreasing air pollution and greenhouse gas emissions by millions of metric tons. And as a result of the increased ethanol production triggered by the RFS, America is benefiting from tens of billions of dollars in economic development in our country’s heartland. The ethanol industry alone supports over 400,000 jobs nationwide and the number of jobs support by renewable fuels will double by 2022 if the RFS remains intact and cellulosic and advanced biofuels gain stronger market penetration.
Imagine if in twenty years our dependence on petroleum is cut in half and our use of domestic renewable fuels and other types of sustainable transportation fuels increases exponentially—what increased benefits Americans will reap! With the RFS in place, this type of future is realistic. Without it, we’ll be paying more every day at the pump for a lack of understanding of the RFS, a bi-partisan created, winning policy for American growth and security.
Todd Foley is the Vice President of Policy and Government Relations at the American Council On Renewable Energy (ACORE). This piece was originally published in The Hill’s CongressBlog.