RFA chief offers strong defense of RFS
July 10, 2012
(July 10, 2012) Washington – In testimony before the House Energy and Commerce Committee Subcommittee on Energy and Power today, Renewable Fuels Association President and CEO Bob Dinneen will underscore the importance of domestic ethanol in the nation’s fuel supply and the important role the Renewable Fuel Standard plays. The hearing begins at 10:00 a.m. Eastern.
“One important alternative fuel — ethanol — is already helping to address these national concerns,” Dinneen wrote in prepared testimony. “America’s ethanol industry — buttressed by a visionary Renewable Fuel Standard (RFS) — is already decreasing our reliance on foreign oil, already exerting downward pressure on gasoline prices, already employing tens of thousands of American workers, and already cleaning up our air. As a result of the forward-looking nature of the RFS, the industry is poised to make even more significant contributions to our nation’s economic and environmental security in the future.”
Dinneen highlighted two important contributions the RFS and ethanol are already making to our nation’s economic and energy security.
- The RFS is Reducing U.S. Dependence on Oil Imports. Since the original RFS was adopted in 2005, net imports of crude oil and petroleum products have fallen from 60% to 45%. OPEC oil imports are at their lowest level in 16 years. “Because U.S. ethanol production has grown each and every year since 1996, with an average annual growth rate of 24 percent since 2005. In fact, since 2005, ethanol has accounted for eight out of every 10 barrels of newly produced liquid fuel from U.S. sources on a cumulative basis (i.e., taking into account both production gains and losses relative to 2005 levels).”
- The RFS is Reducing U.S. Gas Prices. Two university studies – one from Iowa State University and the University of Wisconsin, and one from Louisiana State University – found that ethanol is significantly decreasing prices at the pump for all Americans. The ISU/U of W study found ethanol kept gasoline prices $0.89 per gallon lower in 2010 and a whopping $1.09 per gallon cheaper in 2011. The LSU study agreed, finding that ethanol reduced gas prices by $0.78 in 2010.
Dinneen also took the opportunity to defend the RFS and its Renewable Identification Number (RIN) tracking system. Calling the controversy over fraudulent biodiesel RINs “overblown,” Dinneen noted that these RINs represent just a sliver of the overall market and such practices are far from systemic. The 140 million fraudulent biodiesel RINs represent less than 0.5% of all RINs generated. Some 26 billion ethanol RINs have been generated without a single instance of fraud.
“In truth, the fraudulent activity was very isolated and resulted from the actions of just three bad actors in the biodiesel space,” Dinneen testified. “The U.S. Environmental Protection Agency (EPA) effectively identified those bad actors, investigated the fraud, and pursued appropriate enforcement action. In other words, the bad apples were quickly rooted out of the barrel.”
Finally, Dinneen reemphasized the ethanol industry’s commitment to flexible fuel vehicles and expanding fueling infrastructure to accommodate the growing volumes of renewable fuel called for by the RFS.
Dinneen’s entire testimony can be read here.