February 15, 2012
Oil Hits a New High on Iran Actions as Critics Seek to Block Ethanol – the Only Alternative
Reuters today has a report that oil is hitting another six-month record after Iran decided to cut off supplies to Europe. You can read that story here.
This is similar to what happened last year when unrest in the Middle East forced up gasoline prices on Americans. And it highlights the folly of national energy policies which chain the American economy to OPEC and the oil-producing cartels that control the Middle East’s tumultuous political landscape.
It doesn’t have to be this way. There are commercially-viable alternatives to gasoline, two-thirds of which today in the U.S. is derived from foreign oil – with much of that money going to nations that are either unstable or outright hostile to American interests.
Here’s a fact that should make American stand up and take notice: ethanol is 75 cents cheaper than gasoline. The more ethanol we blend in our fuel, the lower our prices at the pump. But what’s keeping that from happening are the body of regulations and rules that prevent alternatives, like ethanol, from reaching the marketplace.
So while Iran squeezes global oil supply, and Americans see $5 gallon gasoline looming ahead, and Big Oil’s friends in Congress slow down progress toward ending our dependence on foreign oil, those Big Oil companies are raking in what some are calling a “banner year” for their profits.
Here are some other facts about ethanol:
- Historically, ethanol is far cheaper than gasoline; organizations including RAND Corp. and McKinsey & Co. consulting have estimated savings for U.S. motorists of anywhere from 17 to 35 cents a gallon at blend levels of E10.
- Domestic ethanol production creates jobs in the U.S. Economists at the Windmill Group estimated that we could create as many as 136,000 new jobs if the nation moves to E15, as Growth Energy proposed in its petition to EPA.
- Grain ethanol is a low-carbon fuel: it is at least 59 percent cleaner than conventional gasoline in a Life Cycle Analysis. Cellulosic ethanol has even fewer emissions, but because of regulations capping the ethanol market supported by oil companies, lack of capital investment in developing cellulosic has slowed its advance. Moving to E15 would eliminate harmful emissions equivalent to removing 1.35 million automobiles from the road.
- EPA has approved Growth Energy’s E15 petition, permitting the fuel blend for all vehicles built in 2001 and newer, after exhausting and rigorous emissions-systems and engine drivability and durability testing conducted by the Department of Energy. All vehicles tested passed. A few regulatory hurdles remain before E15 can move to the marketplace.