The Renewable Fuel Standard Means Certainty

By Tom Buis | October 18, 2011

When Congress passed the Energy Independence and Security Act in 2007, it strengthened the renewable fuel standard (RFS) as a means of promoting the renewable fuels industry so it could begin to displace foreign oil. That energy bill was adopted by a bipartisan Congress, and signed into law by President George W. Bush. Across the political spectrum, we saw our elected leaders come together in agreement that it was critical for our nation to foster a renewable fuels industry that could make us independent of foreign oil.

Yet there are opponents of ethanol—the only viable alternative to foreign oil—who would block the growth of our industry. Their next goal is to dismantle the RFS.

America cannot allow that to happen. The RFS creates the market certainty that is crucial to both first-generation and second-generation ethanol.
Over the years, our opponents have worked against us on several fronts—they concocted the food versus fuel myth and blocked our efforts to redirect the Volumetric Ethanol Excise Tax Credit away from Big Oil and toward building out flex-fuel pumps and other ethanol-delivery infrastructure.

When the VEETC expires at the end of this year, the only significant policy in support of ethanol will be the RFS. We must make it a point to remind this Congress of the original goal of the RFS, and show that while it has succeeded in some areas—today grain ethanol represents 10 percent of the fuels market—we are still short of the goal in other areas, particularly our efforts to make next generation ethanol commercially viable.

The RFS set a goal of 36 billion gallons of renewable fuels by 2022, with the majority of that being provided by a combination of grain and cellulosic ethanol. The one industry that is taking the greatest strides toward making cellulosic ethanol a commercial reality is the grain ethanol industry itself, in part because it already has access to an abundant source of biomass as feedstock.

But as we all know and recognize, the cost of developing next generation ethanol is high. The best way to draw the private capital needed to speed its development is to make sure the market is certain. The RFS provides that certainty.

Our industry needs to send Congress a clear message: keep the RFS intact. Weakening the RFS goals for cellulosic ethanol would not just block our progress toward a viable cellulosic ethanol industry, but it will literally turn the clock back to the 1970s—and put OPEC further in control of our economy. At this point, that’s the last thing our country needs.

A continued commitment to our nation’s renewable fuel industry will strengthen our energy security, generate more U.S. jobs that can’t be outsourced and improve our environment.

Author: Tom Buis
CEO, Growth Energy