Yesterday American Petroleum Institute’s (API) Jack Gerard delivered the 2016 State of American Energy Address. During the presentation he made remarks about the Renewable Fuel Standard (RFS), federal energy legislation that API has been a vocal opponent of since it’s inception in 2007.
Citing impediment of environmental improvement and cost to consumer Gerard remarked, “For example, ignoring clear consumer preference and in spite of the current record levels of domestic crude oil production, EPA continues to push the Renewable Fuel Standard, a relic of our nation’s era of energy scarcity and uncertainty.
A 2014 Congressional Budget Office study projected that the RFS could raise the cost of fuel prices because “Given the design of the RFS, the cost of encouraging additional sales of high-ethanol fuel falls on the producers and consumers of gasoline and diesel.”
What’s more, there is very little consumer demand for high ethanol fuels….It is well past time that we end or significantly amend the RFS.”
The ethanol industry responding to API’s continued attack on the RFS. Tom Buis, Growth Energy co-chair said, “API’s ‘State of American Energy’ speech, brought to you by Big Oil, is nothing new. While oil companies talk about the future of energy in this country, they seem fixated on a finite resource and fail to acknowledge that renewable fuels play a critical role in meeting the nation’s growing energy needs.
“Year after year, API attempts to drive the narrative that the Renewable Fuel Standard (RFS) must be reformed or repealed. This argument is fundamentally flawed. The claims that renewable fuels will increase the cost of energy or that they are worse for the environment are simply ridiculous. Countless independent studies have shown that renewable fuels like ethanol help drive down the cost of fuel. Furthermore, when it comes environmental damage, no one has a worse record than oil companies. Their record of ecological disasters is extensive and deeply troubling.Between 2008 and 2014, more than 25,000 oil spills accounted for more than 217 million gallons of oil and petroleum based products being discharged into U.S. navigable waterways, territorial waters, tributaries, the contiguous zone, onto shoreline, or into other waters and land that threaten the environment. That’s an average of more than 30 million gallons spilled a year. In contrast, ethanol is biodegradable and no beaches have ever been closed due to an ethanol spill…
API notes the importance of consumers in their speech, yet seems to believe the American consumer is best served by denying them a choice. Furthermore, they attempt to distort the truth saying there is no demand for renewable fuels. Yet major retail chains like Sheetz, Kum & Go, MAPCO and others are adopting higher blends and offering them to consumers and seeing tremendous success and growing demand.
The bottom line is that API wants to kill any competition that may threaten their bottom line and record profits….The RFS is a win-win for America, as it is an essential part of a true ‘all of the above’ energy strategy needed to meet the growing energy demands of the 21st century.” (Click here for Buis’ complete remarks.)
Renewable Fuels Association (RFA) President and CEO Bob Dinneen soundly rejected API’s claims. “I’m not sure what reality Jack is living in, but it is clear that he believes API’s actions and policies are making our nation more energy secure when nothing could be further from the truth. Perhaps he has convinced himself that fracking will provide the answer to all of our nation’s energy needs. What Jack conveniently failed to mention is that as oil prices have crashed, so has the rig count. The number of active U.S. oil rigs has plunged 67 percent from its peak in 2014. Last week’s rig count was actually the lowest since May 2010, according to the oil field services firm Baker Hughes. If Jack spent time living in the real world, instead of his revisionist reality, he would find himself whistling past the graveyards of shuttered wells that have been abandoned in the bust that inevitably follows a temporary boom of an oil well. Continue reading