Moving Forward, Not Backward

December 11, 2014

BY Tom Buis

Homegrown, renewable biofuels like ethanol offer a secure, stable alternative to foreign oil that saves consumers up to $1.09 per gallon at the pump. The ethanol industry provides job security for nearly 400,000 Americans, price security at the pump and energy security for all. 

For renewable fuels to succeed, however, the administration needs to provide an equally stable policy environment. The uncertainty that has been introduced around the renewable fuel standard (RFS) is devastating to biofuels investment and innovation. The RFS is our nation’s most successful energy policy in the past 40 years, the only policy to ever have loosened the oil industry’s stranglehold on the liquid fuels marketplace and the only policy that will help us kick our dangerous addiction to foreign oil.

It is of critical importance that the U.S. EPA moves forward, not backward in meeting the goals of the RFS as it reworks the 2014 renewable volume obligation rule. I commend EPA for listening to all stakeholders and acknowledging that the proposed rule was flawed, and I commend you all for stepping up to the plate, submitting comments and making your voices heard. The decision to not finalize the rule is a win for the renewable fuels industry, and we wouldn’t have been able to do it without your hard work and support. Although we are still surrounded by uncertainty, one thing is sure—it is important to take the time to get both the volumes and the methodology right for 2014 and beyond. The RFS enables competition that would benefit us all and would give consumers the sorely needed ability to choose a fuel that meets their price and performance needs.

It’s time for competition. It’s time for choice. And it’s also time to stick a fork in the tired food vs. fuel myth. We’re about to produce yet another record corn crop, global food prices recently hit a four-year low and ethanol production volumes are near the highest ever recorded. Clearly, the success of the industry is not harming anyone’s grocery bill. In fact, a 2013 World Bank study demonstrated that the primary driver of increased global food costs is the rising price of energy, not higher farm commodity prices or ethanol production. It outlined how crude oil prices are responsible for more than 50 percent of the increase in food prices since 2004, a full year before the enactment of the RFS. This analysis has been validated by the USDA and countless other objective economic studies.

Likewise, the ethanol industry is not driving up prices in the feed store. Only 17.5 percent of net corn bushels are used for renewable fuels because only the starch in the corn is used to produce ethanol. The rest is returned to the food chain in the form of a competitively priced, nutritious animal feed for cattle, hogs and poultry. As a result, both the corn and livestock industries are thriving, not in spite of one another, but because of one another. Since the enactment of the RFS in 2005, livestock production has gone up, livestock prices have gone up and the margin between livestock values and the cost of feed has grown appreciably.

In addition to providing livestock producers with feed, the ethanol industry provides American consumers with the ability to choose a high-performance, low-cost fuel that is grown here at home. Under the RFS, our dependence on foreign oil has been cut almost in half, from 60 percent to 33 percent. And, instead of sending nearly a billion dollars a day overseas, we are investing right here at home. The RFS is essential to our nation’s energy security, national security, environment and economy. The impact of the policy can be seen across the nation—in rural communities where farmers can once again earn a living doing what they love, in the cleaner, bluer skies out the window and in the wallets of consumers who are saving substantially at the pump. Let’s keep moving America forward.

Author: Tom Buis
CEO, Growth Energy
202-545-4000
tbuis@growthenergy.org

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