August 18, 2010
Level the Playing Field and Ethanol Will Compete On Its Own
Ethanol has been the Oil Industry’s favorite target for years. Big Oil has consistently argued that the ethanol industry can't compete with gasoline without taxpayer support. Ironically, a recent study by the American Petroleum Institute concluded that eliminating federal tax deductions for US oil and gas production expenses would hurt the oil companies and its growth.
API president Jack Gerard said of the report, “We contribute millions of dollars to the American economy and significant contributions to the Treasury. Discriminating against this industry at a time when we contribute so much doesn’t make sense.”
In 2009 alone, the production and use of 10.6 billion gallons of ethanol contributed $53.3 billion to the nation’s GDP, generated $8.4 billion in federal tax revenues and created and supported more than 400,000 jobs across the country. And it eliminated the need to import at least 364 million barrels of oil, keeping $21.3 billion in the U.S. economy.
Following Gerard’s logic, since the ethanol industry contributes so much to the economy, discriminating against it would be unfair. But that is exactly what Big Oil has done to ethanol. They have consistently vilified ethanol as an industry that cannot compete on its own.
The truth is, the only reason the ethanol industry needs government support today is because we are arbitrarily denied access to all but 10 percent of the fuel market. The oil companies control the entire infrastructure to dispense fuel and engines have been designed specifically to use any quantity of gasoline.
By eliminating these artificial market barriers through flex fuel vehicles and blender pumps, as outlined in Growth Energy’s Fueling Freedom Plan, we can create an open market where all fuels compete. Then, ethanol will continue to create jobs and displace foreign oil without any help from the government.
That’s right; the ethanol industry can do without government support if we have a level playing field. When has the oil industry ever turned down a tax credit? Never. A June 2010 International Energy Agency study found that $557 billion was spent to subsidize fossil fuels in 2008: 12 times as much as was spent on the entire renewable fuel industry.
For over a century, Big Oil has had its turn in the spotlight, but now it is time to focus our attention to a greener, cleaner energy source: ethanol.
