50 Years of OPEC

By Tom Buis | September 23, 2010
Last month marked a dubious milestone in our nation's history: the 50th anniversary of the founding of OPEC, the Organization of the Petroleum Exporting Countries. That is 50 years of a foreign cartel controlling our economy through the coordinated manipulation of the production of Middle East oil.

The United States has been held over a barrel of oil for far too long, sending more than $300 billion annually to the economies of foreign countries to feed our addiction. As explained by Gen. Wesley Clark, former NATO Supreme Commander and our co-chairman here at Growth Energy, that means every man, woman and child in the U.S. sends a $1,000-a-year tribute to foreign governments.

It may get worse. The International Energy Agency forecasts that as output by non-OPEC nations fall in the next five to 10 years, the global economy will only grow more reliant on OPEC, and more vulnerable to cartel-driven spike shocks.

Increasing the production of domestic, renewable fuels such as ethanol can reduce the power OPEC exerts over our economy. Every gallon of clean-burning ethanol that we produce in this country decreases the demand for foreign oil and keeps U.S. money in the U.S. economy, where it can create U.S. jobs.

In 2009 alone, U.S. production and use of ethanol eliminated the need to import at least 364 million barrels of oilkeeping $21.3 billion in the U.S. economyand reduced CO2 equivalent greenhouse gas emissions by approximately 16.5 million tons in the U.S., or the equivalent of removing more than 2.7 million cars from America's roadways. An increase from E10 to E15, as Growth Energy seeks with its Green Jobs Waiver, would create 136,000 new American jobs.

Ethanol's contributions to our nation are undeniable, but the industry's potential is constrained because we are arbitrarily denied access to all but 10 percent of the market.

Federal regulations mandate that 90 percent of our transportation fuel come from gasoline refined from oil. But we can eliminate these market barriers. As outlined in Growth Energy's Fueling Freedom Plan, we can create an open market where we can competefair and squareagainst oil, and against OPEC. It is time we loosen OPEC's grip over the transportation fuel market and strengthen our nation's economy and national security.

Fueling Freedom seeks to create permanent access to the fuel market. The benefits of those market reforms and open market benefits would long outlast any public financing of Fueling Freedom.
Ethanol is more than a fuel, it's a solution. A strong ethanol industry will create American jobs, stimulate economic growth and make our country truly energy independent.

Since 1960, America's dependence on oil from OPEC has put our country's security and economic strength at risk. If we really want America to become energy independent, we need to increase the use and consumption of domestic ethanol.

Otherwise, we will be celebrating another 50 years for OPEC.

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