Speak Your Piece: Ethanol Fuels Recovery
Editor's Note: Yesterday four members of the House of Representatives introduced legislation to reduce the amount of renewable products such as ethanol that go into the nation's fuel supply. The proposal was praised by food organizations like the National Restaurant Association, some environmentalists and some livestock producers. Growers and ethanol refiners oppose the changes, saying it plays into the hands of the oil industry and will hurt energy independence and the American economy. In this piece, ethanol advocates argue on behalf of home-grown energy.
Patrick Fallon/BloombergThere is a lot that is going well in rural America, but that doesn’t mean that things aren’t tough right now, too. We are not in great economic shape, and despite that, there are folks out there taking aim at one of our prime economic drivers: the renewable fuel industry.
The American Petroleum Institute (API) is leading a charge on behalf of the oil lobby against renewable fuel and the Renewable Fuel Standard (RFS), the main policy that supports ethanol production. Why? So that it can reclaim 100% of our transportation fuel market.
If they succeed, they’ll devastate our economy, hurt consumers at the gas pump and turn the clock back on our national security. If you listen to API’s rhetoric, you wouldn’t realize just how many benefits renewable fuel offers this nation.
The renewable fuel industry is relatively new and has boomed over the last 10 years. This rapid growth has brought jobs and money to Americans in a way that few other industries have, never mind in such a short period of time.
Even more impressive, they’ve created this growth during a recession and the subsequent sluggish economy.
The renewable fuel industry supports 70,000 direct jobs and supported 295,000 indirect ones from chemistry to construction. To put those figures into perspective, on April 5 the Labor Department announced the nationwide job gains for March 2013, estimating that the country has added 88,000 jobs.
This is high quality work that pays well, too: according to a survey by Ethanol Producer Magazine, nearly three out of every four of these jobs pay over $50,000 annually. In contrast, our nation’s per capita income stands much lower, at $27,915.
In a time of high unemployment and low salaries, the ethanol industry is doing its part to lift rural America. Even if you’re not directly touched by the renewable fuel industry, you’re probably experiencing the benefits it brings on a regular basis because ethanol is reducing the price of gasoline, a major expense for most families.
Congressional Research Service
Nearly all gasoline you will come across is blended with 10% ethanol. And a new type of fuel that is 15% ethanol has been approved for sale and is available in a handful of stations right now. Ethanol is less expensive than petroleum-based gasoline, so blending the two brings down the price of a gallon.
Moreover, the addition of ethanol into our energy mix extends the national fuel supply, further lowering prices at the pump. These combined benefits save consumers $1.09 per gallon, according to analysis by Iowa State University. Those savings are nothing to sneeze at.
This also means that more of the money you spend on gasoline stays within our borders. Since renewable fuel comes from America, unlike much of our oil, what you spend on the ethanol doesn’t get shipped abroad to a member of OPEC, like Iran or Venezuela. Instead it goes to support the rural economies that are home to ethanol producers. Investing in ourselves, rather than giving money to nations whose priorities clash with our own, is a smart move for everyone.
Our dependence on foreign oil hurts our nation’s security beyond the shipment of dollars to hostile nations. Let’s look at one of many examples. Our Navy spends $84 billion annually to protect oil trade routes. That’s $84 billion that could be spent on other critical functions of our military like upgrading equipment or organizing more comprehensive trainings.
The story of American renewable fuel is a successful one, and that success will continue thanks to private investment, the Renewable Fuel Standard and the hard work and dedication of our rural communities. While the oil lobby will continue to argue in favor of oil and against ethanol, the facts are clear: this new industry has added jobs in rural America that provide salaries to hundreds of thousands of families, lowered gasoline prices for us all, and helped improve our national security. We must continue on this path.
Roger Johnson is President of the National Farmers Union. Tom Buis is CEO of Growth Energy. Bob Dinneen is President and CEO of the Renewable Fuels Association.