Dinneen: 2002 ended on high note

RFS became a victim of partisan politics as 2002 elections neared
By Bob Dinneen | December 01, 2002
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"2002 was definitely a year to remember.

"After much hard work and negotiation, a new alliance between the oil industry and ethanol producers was cemented when Red Cavaney, president of the American Petroleum Institute, spoke to our National Ethanol Conference about the historic fuels agreement and renewable fuels standard (RFS). This new alliance changed the political dynamic on Capital Hill and made legislative success on the fuels agreement possible.

"But just two weeks after announcing the RFS agreement between oil, agriculture, ethanol, public health and environmental interests, California announced a one year delay in its MTBE ban deadline. With many new ethanol plants nearing completion, the loss of the anticipated California market would have placed ethanol in a serious supply-demand imbalance.

"Consumers, environmentalists and the ethanol industry responded and led California refiners to realize that switching to ethanol in 2003 was the right business decision regardless of the state's official deadline. Consumers made their preference for MTBE-free gasoline clear. Refiners faced mounting liability from MTBE water contamination. And the ethanol industry demonstrated it had ample supply to meet California's needs in a cost-effective manner. Only a few short months after the official ban was delayed, four of the major gasoline blenders had announced plans to switch from MTBE to ethanol by the original deadline. Indeed, California is expected to consume more than 600 million gallons of ethanol in 2003.

"Unfortunately, the opportunity to enact the RFS last year became a victim of partisan politics as the 2002 elections neared. While we were disappointed, the historic coalition supporting the fuels agreement remains intact and focused on success in the new 108th Congress. We firmly believe the fuels agreement and RFS will help address the pressing issues of MTBE water contamination, dependence of foreign oil, refinery flexibility, and clean air concerns.

"2002 ended on a high note as ethanol producers, gearing up to supply the new California market, broke many ethanol production records. Twelve new ethanol plants were completed. Over 2 billion gallons of ethanol were produced. Ethanol use is at an all-time high. Given the high price of crude oil due to the instability in the Middle East and Venezuela, the ethanol industry is primed to break these records again in 2003."

Bob Dinneen, President
Renewable Fuels Association (RFA)