This guest editorial is from Mike Jerke, General Manager of Chippewa Valley Ethanol Co. in Benson, Minnesota. It appears in the April edition of "ET Field Notes," the membership publication for members of the American Coalition for Ethanol (ACE).
Saudi Arabia, Russia, Iran, Mexico, China, Norway, Canada, Venezuela, United Arab Emirates, and Kuwait. These are, in order, the top oil producing countries in the world, and the United States imports between 50 to 70 percent of its oil – around 11 million barrels per day – from nine of them (only Iran is cut off from U.S. import dollars).
This worries me. Venezuela’s president Hugo Chavez is openly hostile to the United States and has more than once threatened to halt oil exports to us. Saudi Arabia, Kuwait, and United Arab Emirates are known to funnel profits from oil into anti-Western Islamist education around the world. As New York Times columnist Tom Friedman has noted, when we buy oil from them, we’re basically funding hostility against ourselves.
The bottom line, though, is this: since we consume far more oil than we produce, the health of our transportation system – and thus our economy as a whole – is dependent on governments and events far beyond our control. A shift in the marketplace here, a drop in production there, or political instability anywhere could quickly make $3 seem like a bargain price for a gallon of gas.
If this seems like an exaggeration, consider the oil embargo of 1973, when OPEC nations were able to quadruple the price of gasoline – and cause widespread economic damage to the United States and other nations – simply by reducing output. Even now, the current Oil Minister of Iran shrugs off any concern over oil at $120 per barrel (which translates into gas at $4 per gallon or more).
Nothing short of energy independence will alleviate my worry. If U.S. producers filled all the fuel needs of U.S. consumers, we wouldn’t have to worry about political unrest or, to use Friedman’s phrase, “petro-dictators” disrupting our transportation and economic systems.
But how do we get to energy independence? R. James Woolsey, foreign policy analyst and former CIA director, thinks we should increase the use of ethanol, methanol, and other non-gasoline fuels, along with other measures like making natural gas the fuel for fleet vehicles like trucks and buses, improving mileage standards, electrifying as much automotive transportation as possible, and expanding domestic oil exploration. I agree with Woolsey, but would add that only the ethanol industry has:
• a well-developed and expanding infrastructure for manufacturing and distribution,
• plants that consistently produce a profit while also increasing production,
• the ability to claim one large country (Brazil) and a growing number of areas around the world as places that use ethanol to meet over 25% of their liquid fuel needs.
Ethanol, in other words, is more than a promising piece of the energy independence puzzle. It is an established source of our current energy supply, and it has proven that it can move the country toward a more reliable and sustainable energy future.
If we are willing to subject ourselves to routine economic shocks from undemocratic and unpredictable world players, then ethanol is an unneeded commodity. If we want to move toward energy independence, however, greater ethanol use and production – along with a sound federal ethanol policy – is a must.