Renewable fuels group touts benefit of higher ethanol mandate

Renewable fuels group touts benefit of higher ethanol mandate

Washington (Platts)--24May2005


The Renewable Fuels Association said Tuesday a recent study it funded shows
that lifting to 8-bil gal/year the amount of renewable fuels, mostly ethanol,
in gasoline by 2012 would "spark $6-bil in new investment" and lessen
America's dependence on imported oil. The study is in sharp contrast to two
studies released by the American Petroleum Institute Monday that show that a
Congressional renewable fuel standard over 5-bil gal/year by 2012 would be
harmful to the US economy. 

Congress is currently working on energy legislation that includes a renewable
fuels standard. The House-passed energy bill calls for a 5-bil gal/year
mandate, while language adopted by the Senate Environment Committee calls for
a 6-bil gal/year mandate. However, several senators have proposed a much
higher RFS, at 8-bil gal/year. Such an amendment, to be sponsored by Sen. Jim
Talent (Republican-Missouri) is expected to be introduced, and agreed to, in
the Senate Energy Committee's mark-up of its energy bill later this week.

The RFA said an 8-bil gal/year mandate would: add $200-bil to the US' Gross
Domestic Product; generate an additional $43-bil of household income for all
Americans; create more than 230,000 new jobs; displace over 2-bil bbl of crude
oil; reduce the outflow of dollars to foreign oil producers by $64.1-bil; and
cut US dependence on imported oil from 67.4% to 62.3%. 

The US currently produces about 4-bil gal/year of ethanol. RFA President Bob
Dinneen said a 5-bil gal/year RFS "represents no new marketplace penetration
for renewable fuels." But the 8-bil gal/year RFS "would have meaningful
impacts on the US economy and energy security. The ethanol industry has proven
it can play a large role in addressing the economic and energy needs of this
country. Enacting an 8-bil gal RFS will unlock this potential," Dinneen said.

This story was originally published in Platts Petrochemical Alert
http://www.petrochemcialalert.platts.com

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