Higher Blends Best For America’s Energy Future

Big Oil is living in an alternate reality, blaming the renewable fuels industry for damaging the environment and receiving federal tax subsidies, writes Tom Buis of Growth Energy. The real reason for the misinformation is the fight for market share.
By Tom Buis | July 17, 2014

The greatest challenge the ethanol industry faces is making higher blends of our product available to consumers nationwide. Producing ethanol is not the problem, it’s getting the fuel into the marketplace. 

The production efficiencies of ethanol continue to improve: less energy, less water, less greenhouse gas  emissions and higher yields, which makes our industry the envy of the world.  Meanwhile, all the new oil gains from fracking and tar sands are taking the nation in the wrong direction, higher costs, increased use of resources and greater risks to our environment and air.  

Incredibly, despite overwhelming evidence about oil’s dangerous practices and impacts, the renewable fuels industry is blamed by Big Oil and special interests for damaging the environment. It is as if Big Oil is living in an alternate reality. The facts speak for themselves, tens of thousands of spills a year, earthquakes from fracking and who could forget the BP spill in Gulf of Mexico or the Exxon Valdez spill in Alaska? The list goes on and on. 

Our industry is often unfairly criticized for receiving federal tax subsidies when, in fact, we volunteered to give up the Volumetric Ethanol Excise Tax Credit in 2011. However, oil tax subsidies began over 100 years ago and continue today. And, if that’s not enough, our industry is blamed for higher food prices. In reality, the World Bank found that the biggest driver of food price increases is the cost of oil. Talk about the fox guarding the henhouse! In all my years in Washington, that is the biggest whopper I have ever heard.

Time and again, Big Oil damages our environment and actively propagates misinformation to keep the American consumer addicted to their product, and fearful of a cleaner, greener homegrown alternative to fossil fuels.

The real reason for all this misinformation is simple. It is a fight over market share. The ethanol industry already has captured 10 percent of the market because of all the benefits it offers to consumers and the oil industry knows we have the capability to secure even more.  All of the misleading rhetoric and all of the fights over the renewable fuel standard (RFS) in Congress, along with all of the efforts to get U.S. EPA to roll back the RFS is for one reason: market share.  They are spending millions, not for what’s best for America, or our environment, air, health or energy security, but to simply protect their monopoly on transportation fuels.

The key to success is simple, breaking down the barriers to give consumers a choice at the pump. We know ethanol is a better performing fuel, cleaner, less expensive, higher octane and renewable. And, we have seen consumers actively choose higher blends of ethanol when given the choice. That is why we need to continue to fight to expand infrastructure and availability of higher blends. The demand is there and now we must overcome the legal, regulatory and public relations hurdles Big Oil has put in place in attempts to block market access for our product.

Luckily, we have the facts on our side. In reality, the investment is not the burden, as consumer demand and competitive advantage will mitigate any short term spending with future growth in profit margins. Higher performance and lower fuel costs will keep customers coming back. The only hindrances are the misinformation Big Oil is spreading to mislead consumers about E15.

Independent retail chains are beginning to realize that E15 offers them a price advantage and better margin opportunity. Chains such as Mapco, Minnoco and Murphy USA and others have all committed to expanding E15 offerings. In fact, retailers who currently have E15 available to consumers have reported the sale of the blend accounts for nearly 30 percent of all sales while providing better profit margins for the retailer.  

For anyone who is paying attention, E15 is the clear choice.  Consumers can rest easy knowing that by using homegrown renewable fuels they are investing in American jobs and the American economy.  By continuing to fight for our share of the market, spreading the word to our neighbors and increasing availability of higher blends throughout the country, we will win this fight.  It is obvious higher blends of ethanol are what is best for America’s energy future.

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