(June 23, 2011)  Washington – Even as gas prices have moderated during the summer driving season, the Obama Administration’s decision to release 30 million barrels of oil (the volumetric equivalent of 1.25 billion gallons of ethanol) from the Strategic Petroleum Reserve (SPR) underscores the continued volatility and uncertainty in the world oil market. The Renewable Fuels Association (RFA) took the opportunity to emphasize the need for greater Obama Administration efforts to increase production and use of domestic renewable alternatives to imported oil.  Unlike corn, switchgrass, ag wastes, and other feedstocks for renewable fuels which are regenerated each year, supplies taken from the SPR are gone forever and can only be replaced by buying more oil. 

“The need to release supplies from the SPR could have been avoided if American fuel policy allowed for more ethanol to be used in a standard gallon of gasoline,” said RFA President and CEO Bob Dinneen. “American ethanol producers could supply the 1.25 billion gallons of ethanol equivalent to the 30 million barrels of oil released right now, spurring economic opportunity, creating jobs, and weakening the hold imported oil has on our nation. Instead, American ethanol producers are forced to export excess supply as domestic fuel regulations and infrastructure limit ethanol’s place in the market. While releasing oil supplies may be necessary, this move needs to be coupled with a renewed commitment to the increased production and use of domestic renewable alternatives like ethanol.”

Domestic ethanol production is the only alternative to oil that is putting downward pressure on gasoline and oil prices today. A recent study from the Center for Agriculture and Rural Development found that the 13.2 billion gallons of ethanol available in 2010 helped keep gasoline prices an average of $0.89 lower than they otherwise would have been.

The impact of ethanol has also gotten the attention of OPEC nations, including Saudi Arabia. In confidential 2010 U.S. Embassy cables recently uncovered by WikiLeaks, Ambassador James Smith stated that the Saudi assistant petroleum minister had expressed concern that Saudis could be “greened out” of the U.S. fuel market by biofuels like ethanol. According to the cable, “Prince Abdulaziz (the Assistant Minister of Petroleum) noted that in 2009, the U.S. for the first time consumed more ethanol domestically than Saudi oil. Saudi officials watched the ethanol debate with great interest…”