RFS Results in Enumerable Benefits

By Tom Buis | June 12, 2012

For far too long, America has been dependent on foreign oil. This leaves us at the mercy of the tumultuous Middle East, unsympathetic foreign governments and OPEC. While every president since Richard Nixon has highlighted the importance of reducing our dependence on foreign oil, it always seemed more of a talking point than a true goal. That is, until 2005, with the implementation of the renewable fuel standard (RFS). This was the first realistic policy initiative since the oil embargos of the 1970s that shifted America’s focus toward domestically produced renewable fuel.

The RFS is the only substantial energy policy the U.S. has enacted in more than 40 years. In 2007, Congress significantly modified the program, updating to the RFS2, increasing volume goals and encouraging aggressive production of renewable fuels.

While we have seen the RFS come under recent attacks, every criticism is based on distorted facts, misinformation and well-funded opposition from oil companies that will not give up their near- market monopoly on fuel without a fight. That is why it is increasingly more important to get the facts straight and continue to build support among policymakers for the RFS.

One cannot dispute the facts that show the RFS is working. It has contributed to a true American success story, producing 14 billion gallons of first-generation biofuels and we are on the cusp of the next generation that will spur more investment in America and add jobs to our ailing economy.

In 2005, the U.S. was importing 60.3 percent of its oil. As ethanol production and usage increased, foreign oil imports dropped to 45 percent in 2011. This alone demonstrates the tremendous impact the RFS has had on our domestic energy policy and the remarkable promise that lies ahead.

The RFS, along with the ethanol industry, has shown it is indeed possible to wean ourselves off our dangerous addiction to foreign oil. Ethanol contributes to enhanced energy security for our nation, while simultaneously providing consumers a choice of a cleaner-burning, less expensive, domestically produced fuel. Currently, ethanol makes up 10 percent of our nation’s fuel supply, with the capability to increase that to 15 percent and beyond.

The ethanol industry has also been a major contributor to our nation’s economy and job growth. As refineries continue to open across America, jobs are added and areas of the country that were once lacking in opportunity are being revitalized. In 2011 alone, the ethanol industry created and supported more than 500,000 well-paying jobs and contributed approximately $50 billion to the nation’s gross domestic product.

Currently, there are more than 200 biorefineries in 29 states providing economic opportunity, consumer choice and reduced dependency on fossil fuels. This is welcome news during difficult economic times, and the ethanol industry is proud to be at the forefront of innovation, pioneering the next generation of renewable fuels and investing right here in America.

Further, the production capability is available to change the direction of our nation’s energy policy. In fact, under the RFS2 targets, by 2022, the 36 billion gallons of renewable fuel produced will comprise roughly 27 percent of the nation’s projected gasoline demand, eliminating the need for Persian Gulf imports entirely. Even a recent Congressional Budget Study concluded that the only way to reduce dependence on oil is to transition to renewables. The potential for a paradigm shift is here. We must seize it.

As such, Growth Energy has continuously advocated for increased use of ethanol in our nation’s fuel supply. The first step is the implementation of an E15 blend in the marketplace. But we must not stop there. We must actively campaign to educate policymakers and the American people of the enumerable benefits that the RFS and the ethanol industry can provide. The resources are here—flex-fuel vehicles, flex pumps and higher blends of ethanol—we just need to embrace them.

For the first time in decades, America has the ability to turn the tide and start the process of increasing our energy production. Growth Energy and the ethanol industry are standing at the forefront of this movement, looking to fundamentally change our future.

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