Comments: The RFS pays off

Source: By Tom Buis, Growth Energy, The • Posted: Friday, February 20, 2015

Since its passage in 2005, the Renewable Fuel Standard (RFS) has sparked innovation and investment in communities—and particularly rural economies—across the United States. Beyond spurring growth in the traditional ethanol industry, the RFS has also accelerated and encouraged the development of the next generation of clean, renewable fuel. In addition, the RFS reduces our dependence on foreign oil, makes our air cleaner and safer to breathe, and breaks Big Oil’s monopoly in the marketplace, allowing Americans to choose a less expensive and cleaner fuel alternative.

This year, the Obama Administration will issue its final rule for the 2014 Renewable Volume Obligations (RVOs) for the RFS – the minimum volume of renewable fuel, including ethanol, required to be blended with transportation fuel. Efforts to repeal or “reform” the RFS will only cost consumers at the pump, harm America’s economy, and threaten our energy and national security. Oil companies have rigged the system to block competition from homegrown renewable fuels, and we’re stuck relying on unstable foreign oil markets.

Ethanol production helps us to reduce our dependence on foreign oil. Homegrown ethanol displaces over 1 million gallons of petroleum per day. Throughout history, we’ve witnessed the extreme volatility of oil prices, with unrest in places like Iraq and Ukraine prompting prices to skyrocket at the gas pump here at home. The RFS is our nation’s most successful energy policy in the past 40 years, the only policy to ever have loosened Big Oil’s stranglehold on the transportation fuels marketplace and the only policy that will help us kick our dangerous addiction to foreign oil.Furthermore, using more American-grown renewable fuels means more jobs for American families. The ethanol industry supports nearly 400,000 American jobs annually that can’t be outsourced and each year it generates over $44 billion of economic output.

Gas stations across America are offering ethanol blended gasoline that is less expensive than regular gas – E15 saves consumers between 5 and 15 cents per gallon. Ethanol increases the available fuel supply, driving down the demand for oil and reducing the price of gasoline for all drivers regardless of whether they choose a higher blend fuel like E15. In addition, ethanol is a higher-octane fuel that improves engine performance and is actually better for engines than traditional fuel.

Big Oil lobbyists and smear campaigns have tried to blame the ethanol industry for high food prices, but those claims are not at all supported by the facts. A 2013 World Bank study showed that crude oil prices are responsible for more than 50 percent of the increase in global food prices since 2004. Ethanol is produced from field corn, only a small quantity of which is used for human consumption, and advanced technologies are allowing it to be produced from agricultural waste. According to the World Bank, the number one cause of food inflation is rising crude oil prices, because it raises the cost of producing, processing, storing and transporting the world’s food.

The fictional “blend wall” narrative created by the oil industry is designed to stifle competition and deny Americans higher blends of renewable fuels. In truth, oil companies have slowed the adoption of higher blends by discouraging and intimidating station owners from upgrading their infrastructure, fear mongering around the safety of E15, and filing lawsuits, all to protect their market share and profits.

Over the past decade, the RFS has helped us cut our dependence on foreign oil nearly in half— from 60 percent to 33 percent. It has allowed the United States to lead the world in biofuel innovation, driving the research and development of next-generation biofuels that will further break our dangerous oil addiction.  With the RFS opening up the fuel market to new fuel sources, the renewable fuels industry has been able to deliver economic, national security and environmental benefits. We need the Renewable Fuel Standard to break the monopolistic stranglehold of Big Oil and give American consumers the choices they deserve.

Buis is CEO of Growth Energy.