Today, some $4 billion in direct federal subsidies go to the oil and gas industry annually even as oil prices promise to remain at the lofty level of $100 a barrel and climb higher. Indirect subsidies such as infrastructure support and the United States’ sizable military presence in the Persian Gulf add an extra $50 billion to $100 billion a year to help Big Oil.
The renewable-fuel standard now assures that currently 10 percent, and in the future more, of the gasoline we use to run our cars and trucks contains ethanol. Without the standard, the ethanol component of gasoline would likely drop to the lower threshold of 4 percent to meet other fuel requirements. And what would make up the difference? Approximately $47 billion worth of petroleum. No wonder oil interests are encouraging a “reform” of the renewable-fuel standard. Home-grown renewable American fuel hurts multinational oil company profits, and the profits of the foreign oil-producing countries, while it reduces the price American consumers pay at the pump and creates American jobs that can be outsourced.
In 2007, when President George W. Bush asked Congress to expand the RFS he said, “It is in our vital interest to diversify America’s energy supply — and the way forward is through technology.” That statement remains true today, and the investment in new technology sparked by the RFS is paying off. Congress should reject any move to reopen, reform or reduce the RFS. The RFS is working.
Hugh Welsh is president of DSM North America, a Dutch-based life sciences and materials sciences company with more than 4,000 employees across the United States.
Vice President Joe Biden waits to conduct a mock swearing-in ceremony with Sen. Brian Schatz, D-Hawaii, in the Capitol's Old Senate Chamber, December 2, 2014. Schatz was sworn in to serve the remainder of his term since he was appointed to the seat after Sen. Daniel Inouye, D-Hawaii, passed away.