According to the Oil and Gas Journal, all U.S. oil companies combined control less than 10% of the world’s oil reserves, and the world’s ten largest oil and natural gas companies are 100% owned by foreign governments.
Ponder that statistic for minute and then tell me our quest for more and better alternative sources of domestic energy is a bad idea. In the latest “Standing Out in the Field” blog they make a well reasoned response to critics who either have contrary agendas or simply have not done enough research.
The public debate over ethanol, and specifically the Volumetric Ethanol Excise Tax Exemption (VEETC), has been prominent in recent weeks so it seems a good time to look at why Congress passed this legislation originally and why it continues to be a sound decision.
An analysis by AUS Consultants shows the elimination of VEETC would result in consumers paying $3 billion more in higher gasoline costs, including $500 million in federal gas taxes, household income falling by $2.9 billion, and 120,600 more Americans having to file for unemployment. Another study shows the American ethanol industry has generated an estimated $33.4 billion in federal tax revenues and nearly $17 billion in state and local tax revenues since 1978 – a 5 to 1 return on investment of the VEETC.
Economist Donis Petersan notes a 100 million gallon-per-year ethanol plant results in:
- $70 million to the local economy during construction
- Expansion of the local economic base by $233 million each year
- 45 direct jobs, plus 101 indirect jobs throughout the area
- Household income raised by $7.9 million annually.
So until legislators are willing to apply the same yardstick to all fuel sources regarding incentives, including oil, the debate in Washington, DC should be decided in ethanol’s favor.