Now, seven years later, we can look back at the public record spattered with misrepresentation of biodiesel by RFS opponents that is thwarting implementation of effective policy.
For example, a 2012 study by the American Petroleum Institute predicted that biodiesel requirements under the RFS would result in a “diesel death spiral” that would increase diesel fuel costs to about $15 per gallon in 2014 and $70 in 2015. Their predictions proved to be wildly incorrect. Despite alarmist warnings of economic collapse, none of it actually happened. Biodiesel producers sent some 1.75 billion gallons of cleaner burning, renewable fuel into the marketplace last year. We did not have $15 diesel fuel in 2014. And here we are in 2015 and we don’t have $70 diesel fuel.
Another example of disingenuousness on the part of some RFS opponents is measuring life-cycle carbon. In complex analysis biodiesel is often held responsible for implied, possible or indirect impacts that might affect land use around the globe. As the studies improve to look more like the real world it is clear these impacts, if any, do not outweigh the comparative carbon reduction biodiesel brings to the table. Even as biodiesel is held accountable for indirect effects, direct impacts of accessing new petroleum reserves are ignored. There is no question that land has been cleared to mine tar sands and to make way for fracking wells. Still some RFS opponents continue to count indirect land-use change that didn’t happen against biodiesel, but don’t count direct land use that you can see from a commercial flight and in some cases from space against baseline petroleum.
The petroleum market is being distorted by actions of hostile nations and an international cartel. This past Thanksgiving Day OPEC ministers gave U.S. consumers something to be thankful for: Even though the global price of crude had fallen by 40 percent in the previous four months amidst a global glut of oil, OPEC, led by Saudi Arabia, decided not to decrease production levels. Why did they do this? Because crude prices below the $50-70 range threaten to bankrupt fracking projects in the U.S. and around the world. Saudi Arabia is sitting on almost a trillion dollars in cash and has production costs of $5 to $6 per barrel. The Saudis can outlast all their competitors. This is what monopolies and cartels do. They use anti-competitive tactics to raise or, in this case, lower prices to squeeze competitors and alternatives out of the market, then they increase prices to maximize their profits. This is exactly why we need alternatives and options, even as prices are seemingly falling.
The NBB started out as a research organization. Our heritage is in science and data. That heritage values truth and scorns distortion and dishonesty. . . .
RFS is a critical policy. Only by diversifying the transportation fuels market and providing competition to crude oil can the U.S. truly achieve energy security.
Joe Jobe is chief executive officer of the National Biodiesel Board.