Turning Back the Tide

March 10, 2008

As you read this column, it is quite likely that gasoline prices are beginning to climb. The last I checked, the swallows still return to Capistrano.

As I write this column in mid-February, oil closed the day over $100 per barrel for the first time in history. Nothing significant happened. An oil refinery in Texas caught fire and there is concern that OPEC may keep production constant, but analysts will quickly say there is an ample oil supply on the world market. Yet, little seems to stop the seemingly unabated rise in oil prices.

With the growing demand for oil from emerging economies in China and India, it is quite likely the days of overpriced oil are here. However, America's dependence on overpriced oil need not remain. Ethanol is helping break that addiction.

For the second consecutive year, the American Petroleum Institute estimates that all the growth our nation saw in gasoline demand was met by the increased use of ethanol. In addition, analysts and petroleum companies themselves see a day in the near future when ethanol is not only displacing oil imports but also imports of finished gasoline. This is based on our domestic ethanol industry averaging a little more than 400,000 barrels a day of production. That is the equivalent gasoline output of two to three medium-sized oil refineries.

That said, our industry is just getting started. The 2005 energy bill certainly provided the kick start our industry needed to achieve the kind of success API details in changing the way America fuels its future. However, the recently enacted 2007 energy bill provides the necessary stability to allow our industry to aggressively develop new technologies that will exponentially expand our ability to renewably fuel our nation. By requiring the use of 36 billion gallons of renewable fuel derived from sources ranging from grains to garbage, leaders in Washington, D.C., responded to the calls of the American people to begin stemming the tide of increasing reliance on oil.

Today, like the little Dutch boy, America's ethanol industry has its finger firmly in the dike, precariously preventing our nation from truly being awash in gasoline, both foreign and domestic.

Tomorrow, America's ethanol industry will be able to stand proudly on that dike and see the gasoline tide receding. Until then, much work remains.

Bob Dinneen
President and CEO
Renewable Fuels Association

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