The Renewable Fuel Standard Is a Proven Success
Around the State
Nicolás Gutierrez’s call for an environmentally-friendly solution to America’s reliance on foreign oil is easily answered by the very policy he rails against (“EPA Must Reform Bad Renewable Fuel Standard,” June 16).
The Renewable Fuel Standard (RFS) has helped lower our nation’s reliance on foreign petroleum to 35 percent since reaching a high of 60 percent in 2005. Ethanol production has reduced finished gasoline imports from 600,000 barrels per day in 2005 to near zero today.
Contrary to Gutierrez’s assertions, the RFS does not noticeably affect consumer food prices. Food prices increased just 2.1 percent in 2013, lower than the 25-year average of 2.92 percent (1988–2012). Corn is only a minor ingredient in consumer grocery items. When consumers spend $1 on food at the grocery store, only 12 cents pays for the value of the farm products themselves while the other 88 cents pays for processing, energy, transportation, labor, packaging, advertising and other costs.
Oil, however, has been proven to have a substantial effect. Last year, the World Bank found that “most of the contribution to food price changes from 1997-2004 to 2005-12 comes from the price of crude oil …” In addition, the RFS contributes to the livestock feed sector through the generation of distillers' grains. More than 35 million metric tons of this highly nutritious feed was generated in the 2012–13 marketing year, with 37.8 million expected in 2013–14. That is enough feed to produce six hamburger patties for every one of Earth’s 7.2 billion residents.
Indeed, the EPA must consider the economic benefits of the ethanol industry. The industry directly supports more than 86,000 well-paid jobs as well as 300,000 indirect and induced jobs. Last year, the industry added $44 billion to the nation’s GDP, raised $30.7 billion in household income, and displaced 462 million barrels of imported oil -- equal to the total amount of crude oil imported from Iraq and Venezuela.
The RFS is a proven success.
Bob Dinneen is president and CEO of the Washington, D.C.-based Renewable Fuels Association (RFA), the leading trade association for America’s ethanol industry.