American Motorists Deserve the Chance to Buy Home-Grown Fuel

By Tom Buis
CEO Growth Energy

Washington DC August 2, 2011; Minnesota is a leader in the production of ethanol, the only commercially viable fuel our nation has to gasoline derived from foreign oil — which is getting costlier, dirtier and riskier every passing day.

In 2011, the 21 ethanol plants in Minnesota will produce more than 1.1 billion gallons of homegrown, renewable fuel, putting Americans to work and reducing our dependence on oil from nations like Libya, Venezuela and Iran.

But even with our maturing production capabilities — American ethanol plants will produce more than 13 billion gallons of ethanol this year — a very simple problem prevents U.S. motorists from being able to buy more ethanol: the American motor fuels market is captive to oil.

There are about 9 million Flex Fuel Vehicles in this country. The owners of these vehicles have a choice of fuel blends when they pull up to a Flex Fuel pump: E30, E50 or more. But unfortunately, there are fewer than 300 Flex Fuel pumps in the entire nation. Even as domestic automakers commit to making half their fleet Flex Fuel, the lack of pumps to serve this fleet means that motorists are forced to fuel with gasoline refined from oil.

Faced with the challenging issue of investing in renewable energy infrastructure while also cutting the federal budget, Sen. Amy Klobuchar, D-Minn., demonstrated her commitment to breaking this limited market open with a smart, bipartisan agreement she forged with Sen. John Thune, R-S.D., and Sen. Dianne Feinstein, D-Calif.

In their agreement, Sens. Klobuchar, Thune and Feinstein agreed to immediately end the existing tax policy, known as the “blender’s tax credit,” that pays fuel blenders 45 cents for every gallon of ethanol they blend with gasoline. This tax credit was set to expire at the end of the year; but by reforming it now, we can direct $1.3 billion toward deficit reduction, as well as toward policies that encourage production of ethanol from cellulosic biomass, like farm waste, and invest in the installation of Flex Fuel pumps.

As with most compromises, this proposal is not perfect, but Sen. Klobuchar’s forward-looking agreement with Sens. Thune and Feinstein deserves praise. It has already received the endorsement of Growth Energy, the leading voice of ethanol supporters, the National Corn Growers Association, the American Coalition for Ethanol, and other organizations for setting a reasonable path forward for the domestic ethanol industry and our entire nation

Today, ethanol represents our best domestically-produced alternative to foreign oil. Ethanol is cheaper — studies show ethanol reduces gas prices by as much as 35 cents a gallon. It is cleaner — grain ethanol reduces harmful emissions by at least 59 percent compared to gasoline. And ethanol creates jobs that cannot be outsourced.

But unless Americans have a choice at the pump, we will continue to be held captive to oil. Flex Fuel vehicles and Flex Fuel pumps provide that choice. In states like North Dakota, where state-funded programs encouraged the rapid installation of Flex Fuel pumps, consumers started to choose higher blends of American-made ethanol and tripled ethanol sales in just a matter of years.

The choice is clear: continue America’s disastrous addiction to foreign oil, or work toward market access for renewable, homegrown ethanol, giving motorists a choice at the pump, dollars in their pocket and a cleaner energy future.

Tom Buis is CEO of Growth Energy, which lobbies for the U.S. ethanol industry.