How Biofuels Can Help Break Up Big Oil’s Marketshare Monopoly

Source: By Bob Dinneen, Morning Consult • Posted: Wednesday, July 6, 2016

In a recent poll conducted by Morning Consult on behalf of the Renewable Fuels Association, voters support the Renewable Fuel Standard, a program to increase the amount of biofuels in the transportation pool, by a greater than 3:1 margin. Additionally, by a 2:1 margin, those same voters oppose efforts to reduce or repeal the RFS. Voters recognize that the program has been an unmitigated success and repealing or dramatically reforming it would reverse those gains already made to reduce petroleum dependency, boost rural economic development and slash greenhouse gas emissions.

That is the message I took to Congress recently, testifying before the House Energy and Commerce Subcommittee on Energy and Power. 

In 2015, 14.8 billion gallons of ethanol was produced, supporting 85,967 direct jobs, while net petroleum import dependence fell to just 25 percent, and would have been 32 percent without the addition of domestically produced ethanol to the nation’s fuel supply. The surge in ethanol production has reduced gasoline imports from nearly 10 billion gallons in 2005 to almost zero today. Looked at another way, the ethanol produced in 2015 displaced an amount of gasoline refined from 527 million barrels of crude oil. That’s roughly equivalent to the volume of oil imported annually from Saudi Arabia and Kuwait combined.

Meantime, the use of ethanol in gasoline in 2015 reduced greenhouse gas emissions from transportation by 41.2 million metric tons — equivalent to removing 8.7 million cars from the road for an entire year. 

While some continue to criticize the RFS on the false premise that it increases food prices (see “We’re Swimming in Fuel, Why Burn our Food Supply,” by Keith Mauck and published June 28 in Morning Consult), a report recently issued by the World Bank and others found that biofuels from crops do not harm food supplies.

We don’t use food for ethanol production. The corn used in the production of ethanol is field corn, not the sweet corn that compliments every back yard barbecue. Field corn is used for animal feed and a variety of industrial products, including high fructose corn syrup and pharmaceuticals. Moreover, we’re only using the starch in the field corn, allowing all the protein and nutritional value to be used as animal feed shipped all over the globe. 

But you wouldn’t know these benefits if you listened to the American Petroleum Institute and their sycophants, who repeatedly trot out false talking points of the oil industry to distract from the fact that they want to continue their 100-year-plus monopoly on the transportation sector. The incumbent industry has already lost 10 percent of the market. If the RFS is implemented consistent with the statute, the market will make the final push to see cellulosic ethanol and other advanced biofuels to fruition, resulting in the loss of 30 percent of the market. You can bet oil companies are not too happy with that prospect.

That’s why maintaining a strong RFS is essential. Congress did an excellent job of crafting the RFS, building in a great deal of administrative and market flexibility to deal with issues as they arise. Congress shouldn’t be bullied by the hyperbole and scare mongering by the incumbent industry that fundamentally disagrees with the need for alternative, low carbon options for consumers.

The American public clearly wants alternatives to Big Oil, and biofuels can help reduce our petroleum dependence, while cleaning the environment and boosting the rural economy. 

Bob Dinneen is the president and CEO of the Renewable Fuels Association.