By Sen. Tom Daschle
30-04-04 On April 1, USA Today ran a story, "Ten Tips for Getting the
Most at the Pump," that missed the boat when it recommended that
price-conscious consumers should not use ethanol-blended gasoline. The truth is
that, with gas prices rising, now more than ever it makes sense for motorists to
purchase domestically produced, clean-burning ethanol-enhanced gasoline.
USA Today bases its recommendation on the argument that ethanol has a slightly
lower energy content than gasoline. It fails, however, to recognize the reduced
federal tax on ethanol blends or its higher octane rating. The fact is that the
higher octane ethanol blended gasoline allows motorists to purchase mid-grade
gasoline at the pump for 4 to 5 cents less than conventional regular gasoline.
The addition of as little as 10 % ethanol to gasoline increases a gasoline's
octane by 3 points, which means increased performance. Moreover, ethanol's
increased oxygen content ensures that the gasoline burns more completely, thus
reducing tailpipe emissions, especially harmful carbon monoxide. Since 1978, the
US Congress has recognized these benefits of fuel ethanol by reducing the tax on
ethanol-blended gasoline. Today, the cost of gasoline containing ethanol
reflects 5.2 cents per gallon less in federal excise taxes than conventional
gasoline, which enables marketers to reduce the pump price accordingly.
Finally, as we look to the future, it has been suggested that rising gas prices
argue for drilling for oil in the Arctic National Wildlife Refuge or other
environmentally sensitive areas. It is worth comparing the potential benefit of
opening up ANWR to that of increasing domestic ethanol production.
A recently released Department of Energy report concludes that if ANWR was
opened to drilling this year, crude oil could begin flowing at the earliest by
2013, and that such reserves could reach a peak flow of 876,000 bpd by 2025. The
report also concludes that tapping into ANWR would only reduce our dependence on
imported oil from 70 % to 67 % and, at full production in 20 years, would reduce
US oil prices by a negligible 50 cents per barrel, or 1.12 cents per gallon.
Contrast these projections to those of the renewable fuels standard (RFS)
established in the pending energy bill that will increase ethanol production
steadily over the next 10 years. The RFS alone, conservatively estimated,
produces 500,000 barrels of ethanol per day, and, since it is a refined product
(unlike crude oil) and is high-octane, it actually is equivalent to two barrels
of crude oil. Therefore, if the RFS were enacted this year, ethanol would
displace more than 3.5 bn barrels of crude oil by 2025.
Simply put, ethanol will displace many times more barrels of foreign crude
oil than ANWR could ever hope to displace. This increased volume of domestically
produced, already-refined, high-octane product will reduce gasoline prices by
several cents per gallon during this time period, a greater cost reduction
impact than the DoE projects for ANWR.
The truth of the matter is that savvy consumers should look for ethanol-blended
gasoline wherever they can. They will save themselves money and contribute to
important national policy goals at the same time. At a time when our nation's
dependence upon oil imported from dangerous regions of the world threatens our
security, economy and potentially American troops, we should all be looking for
ways to use domestically produced renewable fuels whenever we can.
Source: North Dakota Farm Newspaper