OPEC’s Anniversary – Breaking a 50 Year Old Grip on Oil Dependence

Washington – Commenting on the anniversary of the formation of OPEC, Renewable Fuels Association President Bob Dinneen issued this statement:

“The world oil cartel, known as the Organization of Petroleum Exporting Countries (OPEC) was founded 50 years ago on Tuesday. While there may be cause for celebration in the capitals of Saudi Arabia, Iran, Venezuela and other member countries, here in the U.S. it is time to thank America’s renewable fuels industry for staunching the flow of OPEC oil. OPEC’s hostility to America’s ethanol industry is clear. Ethanol displaces OPEC oil. In 2008, the International Energy Agency stated, “biofuels have become a substantial part of faltering non-OPEC supply growth, contributing around 50% of incremental supply in the 2008-2013 period.” This is precisely why OPEC Secretary General Abdalla El Badri issued a stern warning to western countries against developing biofuels. Biofuels threaten OPEC’s oil dominance. Without the growing production and use of biofuels in the U.S. and around the world, IEA calculates that more than one million barrels per day of new oil production would be required. Thanks to forward thinking U.S. policy promoting the production and use of biofuels, the U.S. can celebrate 50 years of OPEC not by cutting cake, but cutting even more oil imports.”

Our Take:
Minnesota’s billion gallons of ethanol production each year, all by itself, costs OPEC billions in lost revenue–though our oil in Minnesota comes mostly from Canada, American ethanol production has a direct effect on the world price of oil. Without ethanol, the spot price of gasoline would soar, the price per barrel of oil would climb steadily and remain elevated.

All that money OPEC doesn’t get means less money for people who tell us that they hate America and want to kill us. Not only should we take our OPEC-funded enemies at their word, but we should take away as much of that funding as possible.

And the flip side of not spending on foreign energy is that dollars are staying in America–not only creating jobs directly in the ethanol industry, but diffusing through the entire domestic economy, and putting more money in the average American’s wallet.

Ethanol opponents want to get rid of the tax credits that encourage gasoline blenders and retailers from using ethanol in gasoline, but the most cursory look at the accounting shows that ethanol sales, and the economic activity generated by ethanol production add billions of dollars more to the federal treasury than are paid out in incentives. The incentives merely prime the pump, and what flows is a stronger US economy, less dependent on foreign energy, with an improved balance of trade, and more secure because it is not filling the coffers of our enemies quite so much.

Let’s not take the next 50 years to completely shut off OPEC from the American energy picture.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: