Choosing America’s Farm Fields Over OPEC Oil Fields

The key to cleaner and more affordable energy for American consumers lies not in the oil fields of Saudi Arabia and Russia, but in the farm fields of our nation's heartland. Our leaders in Washington should be looking to American farmers for help.
By Geoff Cooper | September 20, 2021

Anyone who has been around the ethanol business for very long knows that one the founding pillars of our industry was the dire need for a more secure energy supply. It all started with the oil embargoes of the 1970s. President Carter, in a major televised speech on the energy crisis in 1979, vowed that “this nation will never use more foreign oil than we did in 1977—never,” and ethanol was part of the solution he presented.

Likewise, when President George W. Bush signed the Renewable Fuel Standard into law just over a quarter century later, he spoke of the role renewable fuels would play in this area. “Every time we use a home-grown fuel … we're going to be helping our farmers, and at the same time, be less dependent on foreign sources of energy.”

It was therefore understandably difficult to recently learn that President Biden was calling on the OPEC+ nations to increase oil production as a way of combatting higher fuel prices at the pump. In a letter to the president two days after this announcement, the Renewable Fuels Association made clear our position—a position that many of the president’s predecessors would agree with:

The key to cleaner and more affordable energy for American consumers lies not in the oil fields of Saudi Arabia and Russia, but in the farm fields of our nation's heartland.

We do agree with President Biden that higher gasoline prices threaten to derail our nation’s economic recovery from the Covid-19 pandemic, and we support the administration’s call for an investigation into the true causes of recent higher gas prices. However, rather than hoping Iraq, Iran, Venezuela and other OPEC+ countries will provide the cure to escalating gas prices in the United States, we urge the president to pursue a real and immediate solution to higher pump prices—increased production and use of low-carbon renewable fuels like ethanol. Using more domestically produced ethanol would not only result in lower fuel prices for consumers, but it would also support this administration’s goals related to clean energy, climate change, and jobs.

While some oil refiners continue to falsely claim the RFS somehow increases the cost of gasoline, the facts are clear. Expanded use of ethanol under the RFS has lowered gasoline prices by an average of 22 cents per gallon in recent years, saving the typical American household $250 annually. In recent weeks, gasoline containing just 10 percent ethanol (E10) has typically sold for 30-40 cents per gallon less than gasoline with no ethanol, on average. And by increasing our liquid fuel supply, it helps dampen gasoline price shocks that result from sudden oil market disruptions.

With the right policy and regulatory actions, renewable fuels can do even more to keep pump prices in check, reduce petroleum dependence, and reduce carbon emissions. We encourage the Biden administration to take three steps: Quickly finalize robust RFS volume requirements for 2021 and 2022, take action to ensure consumers have year-round access to gasoline containing 15% ethanol (E15), and work with Congress to ensure upcoming legislation includes the incentives necessary to support increased FFV production and expanded infrastructure for higher ethanol blends like E15 and E85.

U.S. ethanol producers stand ready to work with the Biden administration and Congress to deliver immediate and effective solutions to the challenges posed by high pump prices and our long history of over-reliance on petroleum. Rather than calling on the cartels of the Middle East to solve our problems at the pump, our leaders in Washington should be calling on the farmers of the Midwest.

 

Author: Geoff Cooper
President and CEO
Renewable Fuels Association
202.289.3835
gcooper@ethanolrfa.org