Now Is the Time to Maintain Momentum on Energy Independence

Posted on November 13th, 2013

We have made serious progress toward energy independence, but progress means little if we reverse course on renewable fuels. We have the opportunity to create jobs and clean the air if we take advantage of our existing renewable fuel capacity in 2014.

October marked the 40th anniversary of the OAPEC oil embargo and a fitting opportunity to reflect on the United States’ vulnerability to energy constraints and economic shocks. While the cast of characters contributing to the embargo and the ensuing oil crisis are familiar to anyone reading today’s headlines, let me provide a brief history review for those too young to remember the cause and effect of those crises.

In early October of 1973, Syria and Egypt launched a surprise attack on Israel. The U.S. supported Israel with supplies. In retaliation, the Organization of Arab Petroleum Exporting Countries (OAPEC) enforced an oil embargo, which lasted until March of 1974. During these five months, oil production was cut, the fuel supply to the U.S. was disrupted, and prices skyrocketed. The price of oil quadrupled. Gasoline was rationed in the U.S. There were days that you could not buy gas for your car regardless of the soaring price. In short, a handful of oil producers were successful in using oil as a weapon, and it had crippling consequences to our economy and political power that can be felt to this day.

nbb_bds_maintain_momentum_body_image_300x225_02Prior to the October embargo, the US imported approximately 6,000 barrels of oil each day. Experience from that boycott tells us that such heavy reliance on imported oil represents a severe vulnerability. So, what did we do? We began to conserve. We attempted to be more conscious about the source of our energy. However, even though the price at the pump continued to remind us of the toll on our pocketbook, our collective record on petroleum imports suggests that we forgot how dangerous it is to be reliant on foreign powers for the energy staple that fuels our economy. In 2005, our petroleum imports peaked at over 13,000 barrels a day. In spite of our awareness of import addiction, we managed to double the amount of oil we import and consume from foreign countries. Even as the U.S. struggled with trade deficits and spending in excess of revenues, we spent a billion dollars a day on imported petroleum. That represents $700,000 a minute flowing out of this country. Imagine the good we could do in the U.S. If we invested that kind of money in our own communities instead of sending all that cash to oil exporters.

Fortunately, some progress has been made since 2005. The last decade saw the boom of renewable fuels produced here in the U.S. Conservation continues to be important as fuel economy standards help move us farther down the road on the same relative volume of fuel. Stalling of the economy (partly fueled by volatile fuel prices, themselves) has significantly reduced demand for fuel. The high price of crude oil has also stimulated some additional domestic petroleum production. These factors combine to show that today, we import approximately 6,500 barrels a day from foreign countries, which is only slightly more than we imported in 1973.

We didn’t make much gains in energy independence between 1973 and 2005, but we have reversed that trend in recent years thanks to conservation, diversification including renewables, and more intensive extraction techniques for hard-to-reach petroleum. There remain serious questions regarding the environmental impact resulting from domestic exploitation of tight shale oils and other forms of carbon-intensive North American crude; and tapping these reserves does nothing to reduce the global price of petroleum. Extracting this expensive domestic crude merely drains our savings account of fossil fuel and makes it harder to defend ourselves in the future from global oil price manipulation or other national emergencies. Everyone agrees that conservation is a winning strategy for energy security and the environment, but conservation is only part of the solution, because we will always need liquid fuels to power our economy.

Conservation’s natural partner in reducing dependence on foreign oil is diversification including renewable fuels. Why then, should EPA step back from congressionally enacted goals to displace imported oil with renewable fuels? Alarmingly, that is precisely the course of action in a leaked proposal attributed to EPA. The leaked draft proposes to reduce the production of ethanol and biodiesel in 2014 to volumes less than actual production in 2013. The proposed cut is particularly puzzling in the case of biodiesel, because it could have the effect of mothballing nearly 50 percent of the biodiesel production capacity and ending real American jobs just as biodiesel has been emerging as a star performer in the renewable fuels program.

The Energy Independence and Security Act was enacted by Congress and signed into law by President George W. Bush with the specific goal of moving the U.S. toward more self-reliance by steadily increasing the utilization of renewable fuels. The measure was necessary, because there has been no free market for liquid fuels since the oil embargo of 1973. While the initial embargo only lasted 5 months, the enduring practice of petroleum exporting countries remained a successful strategy to control the production and price of oil. Through this market manipulation, oil cartels maintain political leverage and an economic stranglehold on the U.S. and all countries who rely on petroleum. The only way to break free from this market manipulation is to diversify our sources of fuel and to make conscious decisions about the fuel that is most beneficial to our country. Our biofuel industry, and especially the biodiesel industry is a young startup. Thousands of hard-working Americans have put their livelihoods on the line to invest in a new kind of fuel production. The biodiesel industry has proved its merit in recent years by creating thousands of domestic jobs, producing billions of gallons of new fuel production capacity, reducing carbon emission by tens of millions of tons each year, and potentially adding billions to GDP. All of this is at risk. Without a consistent policy commitment to growing U.S. fuel production capacity, all of these jobs and all this new production capacity are at risk of being snuffed out by the cartel that uses oil as a weapon.

Ironically, by failing to consistently wield the power delegated to them by Congress our very own Environmental Protection Agency could be an agent of the oil cartels if the leaked proposal comes to fruition. Rumors have already affected the markets–placing jobs at risk. Now is the time to reject such a reversal of course and continue on a steady path toward more energy independence. Send EPA a letter right now and tell them it is important to utilize our domestic resources and existing production capacity to free us from the economic control of oil exporting countries. Remind them that we produced 1.7 billion gallons of biodiesel this year, and we should use at least that much in 2014.

Don Scott serves as the Director of Sustainability for the National Biodiesel Board.

One Comment

  1. Yan says:

    Energy dependence is dangerous for a country. And fossil fuels will run out in the future. It is important for us to find renewable energy sources such as biofuel.

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