Ethanol Protects Against Repeat of Devastating Effects of 1973 Oil Embargo
October 15, 2013
(October 15, 2013) WASHINGTON — On the eve of the 40th anniversary of the 1973 Oil Embargo, Bob Dinneen, President and CEO of the Renewable Fuels Association (RFA), wrote on the E-Xchange blog:
The gas lines of 1973 are iconic images in America’s collective memory. October 16th marks the 40th anniversary of the oil embargo imposed by the Organization of Arab Petroleum Exporting Countries (OAPEC) as punishment for America’s support of Israel during the Yom Kippur War.
To be exact, on that date, the Organization of Petroleum Exporting Countries (OPEC) decided to raise the price of oil by 70 percent a barrel and cut production over time in 5 percent increments until they were satisfied that their political policies were understood and respected.
If you are of a certain age, your mind is likely racing through past memories of gas rationing, long lines waiting to fill-up, odd and even number license plates determining what days you could go to the gas station, red and green flags designating whether stations had fuel at all, bans on Christmas tree lights, and real, but ridiculous, threats of toilet paper shortages as a result of the embargo. Now, with as much clarity, can you recall what this country has done to protect its economy from being similarly hijacked by Middle Eastern oil supply disruptions or price shocks induced by a global price-setting cartel?
U.S. energy independence is at the heart of this country’s economic and national security. The modern industry was born from the energy crisis of 1973 and officially launched by energy legislation signed into law by President Jimmy Carter. The spirit and intent of that law to establish a domestic, renewable fuel alternative to foreign oil has been supported by Democratic and Republican Presidents ever since. Ethanol has the proven ability to not only displace foreign oil and stretch our existing domestic oil supply; it has proven to lower the price per gallon of gasoline, replace lead and other toxins, reduce green house gas emissions all while stimulating economic development and job creation here in the United States.
The facts speak for themselves:
- Today, ethanol makes up 10% of the U.S. gasoline supply. That’s up from less than 1% just 20 years ago. (Energy Information Administration, Renewable Fuels Association)
- Last year, ethanol displaced an amount equivalent to the gasoline refined from 462 million barrels of imported crude oil. That is more oil than the U.S. imported from Saudi Arabia. (Energy Information Administration. Cardno ENTRIX, “Contribution of the Ethanol Industry to the Economy of the United States”, January 2013)
- As a result, the U.S. has reduced expenditures on imported oil by $44 billion last year. (Cardno ENTRIX, “Contribution of the Ethanol Industry to the Economy of the United States”, January 2013)
- Oil imports from OPEC are down 22% since the Renewable Fuel Standard was expanded in 2007.” (Energy Information Administration)
- And oil imports from the Persian Gulf are down 30%over the past decade.” (Energy Information Administration)
- Oil import dependence dropped to 41% in 2012 — the lowest since 1995. Without ethanol, oil import dependence would have been 48%. (Energy Information Administration, Renewable Fuels Association)
- Ethanol has reduced gasoline prices by an average of $1.00 per gallon in 2012 and 2013. (Philip K. Verleger, August Petroleum Economics Monthly)
- Currently, 211 ethanol plants produce over 13 billion gallons and support over 380,000 jobs while contributing more than $43.4 billion in U.S gross domestic product. (Cardno ENTRIX, “Contribution of the Ethanol Industry to the Economy of the United States”, January 2013)
You would think accomplishments this noteworthy would merit cheering rather than jeering. Sadly, we live in a world where petty political theatrics, Big Oil corporate money, and small-minded misinformation undermine the single most effective energy policy this country has known, the Renewable Fuel Standard, a successor of the 1980 Energy Security Act. Economic times are hard enough as is; hopefully it won’t take another energy crisis to wake Congress up to the economic and national security importance of a domestically-produced, renewable fuel alternative. Now is not the time to roll back policies and undercut the progress this country has made. Ethanol is fueling a stronger, healthier, more independent nation.