Fueling Freedom

By Tom Buis | August 27, 2010
In July, Growth Energy proposed a change in federal energy policy to address the biggest challenge the ethanol industry faces—access to a fair, open and competitive market. We proposed a market-based solution, by modernizing current policies which would result in the permanent elimination of the blend wall. Growth Energy's Fueling Freedom proposal would gradually redirect the supports that initially helped ethanol grow—and put in its place a market-driven solution where ethanol can compete, and succeed, on its own. The Growth Energy plan would redirect a portion of the current Volumetric Ethanol Excise Tax Credit to support the build-out of the distribution infrastructure—namely, 200,000 blender pumps, and as many as 120 million flex-fuel vehicles—to give Americans access to an alternative fuel at the pump.
Currently, federal regulation mandates that all fuel be at least 90 percent gasoline, two-thirds of which is refined from imported oil. This 10 percent ethanol-gasoline blend wall restricts the ethanol industry's access to the fuel market and ultimately will threaten our ability to meet the federal mandate of 36 billion gallons of biofuel production by 2022 as enacted in the 2007 Energy Independence and Security Act.
By eliminating market barriers as outlined in the Fueling Freedom plan, we can create an open market where all fuels compete. In that scenario, domestic ethanol can win. The benefits of building out this infrastructure include an expanded fuel supply, which should help lower the price of fuel for consumers, as well as an invigorated economy in our rural communities and thousands of new jobs created here in the U.S. Expanded access to ethanol would also help decrease our dependence on foreign oil, improve our environment and strengthen our economic and national security. In 2009 alone, the production and use of 10.6 billion gallons of ethanol eliminated the need to import at least 364 million barrels of oil, reduced CO2-equivalent greenhouse gas emissions by approximately 16.5 million tons and supported more than 400,000 jobs here in the U.S.

There is no question that our plan will benefit the American taxpayer, and every American over time, due to ethanol's economic, environmental and political benefits. We have seen strong support from consumers, lawmakers, and industry groups who want to see a lasting impact of federal investment in biofuels such as ethanol.

In August, Sens. Tom Harkin, D-Iowa, and Richard Lugar, R-Ind., offered an amendment that would mandate the production of flex-fuel vehicles and require the installation of blender pumps—both provisions included in the Fueling Freedom Plan. We support their amendment and will work to get it adopted in energy legislation when Congress returns in September.

Americans deserve the freedom to choose their fuel and if given the opportunity, will choose America's fuel, ethanol.

As an industry, we must continually evolve. Today, we no longer have a problem producing ethanol—in fact, we now overproduce. Our challenge is access to the market. For this reason, we must modernize federal ethanol policies to address today's challenges. Will these changes be easy to get adopted? No. Are they worth pursuing? Yes!

At Growth Energy, we believe in the entrepreneurial spirit of America. We know that ethanol is the most competitive fuel on the planet because the marketplace will affirm it, despite academic theory to the contrary. And, if artificial suppression of demand can be removed, ethanol can flourish far beyond today's artificial government "caps". But, we must evolve. We must believe in the unlimited potential of our product.

Although accomplishing anything in an election year is difficult, it is never too late to stand up for the best interests of our industry. To stay silent while Congress debates an energy bill that does not address the challenges facing our industry would be shortsighted. Every other industry involved in energy is part of the debate, ethanol should be too. The status quo will no longer suffice.

We will continue to speak out for the need for reform of federal energy policies that reduce our dependence on foreign oil, create jobs right here in America, and improve our nation's environment by expanding the market for ethanol.

I invite you to stand with us.

Tom Buis is CEO of Growth Energy. He can be reached at tbuis@growthenergy.org or (202) 545-4000.