What was the second biggest policy story of the year in eyes of the petroleum industry? According to a recent membership survey by the American Petroleum Institute reconsidering biofuel (ethanol) blending. What was the second biggest transportation, storage and refining story of the year? The battle over biofuels blending. And what was listed 2nd on oil’s list of things they most want to see happen in 2014? Yep, reduction in EPA blending requirements.
Most of the public are too focused on their jobs, raising families and just paying the bills to have a deep understanding of the growing role of biofuels and renewable ethanol in our nation. However, years of education by supporters of the domestic fuel have generated a basic awareness of ethanol’s benefits such as job creation, reducing greenhouse gas, and providing a fuel choice that makes us less reliant on imported petroleum.
Because of this hard fought and well deserved perception that ethanol is good, many of my friends have been asking me lately what the heck is going on with the rash of negative information related to ethanol. How did proven ethanol suddenly become a bad idea over night? Most recently, the Environmental Protection Agency’s proposal to reduce the amount of ethanol to be blended in our fuel supply has been getting a lot of media attention.
Put simply, the oil industry has always been ok with ethanol as long as the market share didn’t get too large. In fact they need a certain amount of ethanol because it allows them to provide a high octane product at less cost…meaning more margin for them. Without ethanol they would be forced to do more extensive and costly refining in order to produce a product that won’t leave your car sputtering curbside.
But in today’s market things have changed. Increasing domestic oil production, more fuel efficient vehicles and a soft economy have shrunk the volume of fuel needed. Thus big oil finds themselves looking at the bigger market slice on ethanol’s plate and thinks “hey we want some of that back.”
The unspoken part of the previous statement is “and yes we will pay nicely to get it.” And they have done so in recent years. Their most recent onslaught has been sustained by millions of dollars of lobbying, advertising and poor pseudo-journalism.
You might be inclined to think the family farmers and independent businessmen that make up the ethanol industry are just paranoid but given the aforementioned high priority petroleum has placed on this issue, “it ain’t paranoia if they’re really out to get ya.”