Instead of drilling into deeper waters, the U.S. should go deeper into clean energy, say renewable fuel experts.
“If we’re serious about moving forward, we need to concentrate on comprehensive energy legislation and increase investment in research and technology,” says Tom Buis, CEO, Growth Energy, a group that is taking the clean energy message to Washington, DC, and nationwide. Buis points out that despite the OPEC oil crisis decades ago and record high gas prices as recent as 2008, the U.S. still has not overhauled its policy concerning energy (and most importantly, energy security).
Although organizations such as the Growth Energy and the Renewable Fuel Association (RFA) believe that Congress will ultimately extend the Volumetric Ethanol Excise Tax Credit (VEETC) beyond the end of this year, they add that Congress needs to extend tax credits more than just a year or two.
RFA President and CEO Bob Dinneen says, “Extending the incentive is critical to ensure current technologies are allowed to mature and developing technologies can commercialize. There is a lot at stake. It is a question of priorities: Are we serious about replacing oil, or are we just giving it lip service?”
If VEETC is not extended, 40% of the ethanol plants in this country and 112,000 of its employees will lose their jobs, Dinneen says, adding, “The hard lessons from the failure to extend a similar incentive for biodiesel are still to be taught.”
Also at stake with energy legislation are the proposed extension of the Cellulosic Ethanol Producer Tax Credit, the secondary tariff on ethanol, and the Small Producers Tax Credit. “Cellulosic incentives will be vital to ensure these technologies can properly incubate and grow,” Dinneen says. “Extending the tariff on ethanol is a must if VEETC is extended. Without the tariff, ethanol producers in foreign nations would gain access to American taxpayer dollars through VEETC, as it doesn’t distinguish country of origin.”
With congressional elections on the horizon, will energy legislation be passed this year? Dinneen concedes that in an election year, it is difficult to get any kind of legislation passed, but adds, “I believe that most members of Congress understand the necessity of diversifying the nation’s energy supply and lessening our dependence on oil. To that end, I think energy legislation, should it pass, will contain elements to accelerate all forms of renewable energy, including biofuels like ethanol. We will need them all.”
Like the American public, elected officials are reading and seeing coverage of the BP oil spill on a daily basis. “Politicians are paying attention and usually react in times of crises,” Buis says. “But 60 votes in the Senate are still needed to pass energy legislation, and the political climate right now is not conducive to getting things done.”
“The spill in the Gulf is a tragedy and the nation’s first priority should be cleaning it up and finding out why it happened so that it won’t again,” Dinneen says. “But a longer-term strategy is needed as well. We must develop renewable alternatives to oil so that the need to drill in a mile of seawater is not necessary. Increasing the use of ethanol, such as E15 and other higher-level blends, is a good place to start. I would urge the Obama administration to immediately approve the use of higher-level ethanol blends and begin the necessary work to end this country’s addiction to oil.”
Growth Energy’s Buis adds that the federal government also needs to look ahead to meeting the goal of the Renewable Fuel Standard (RFS2), which is to incorporate 36 billion gallons of renewable fuels into the total U.S. fuel supply by 2022. Growth Energy favors a federal flex-fuel vehicle mandate as well as increasing the number of blender pumps nationwide.
The U.S. auto industry already has established a voluntary time frame for manufacturing more flex-fuel vehicles. According to Buis, GM, Ford and Chrysler have indicated that 50% of their vehicles will be flex-fuel by 2012. He adds that some 90% of vehicles could be flex-fuel by the end of the decade. It has been done in Brazil; there should be no reason why it cannot be done here, he says.
The question remains, however. Is the U.S. prepared to go deep when it comes to energy?