They're at it again. Big Oil, Big Food and their followers are spreading a new misinformation campaign against homegrown biofuels. I went to the Senate floor earlier today to dispel the myth. I thought you might be interested in a copy of the text of my statement or the video of my remarks on the Senate floor. Let me know your thoughts by emailing me here. - Chuck Grassley
Prepared Statement of Senator Chuck Grassley
Homegrown, Renewable Biofuels
Monday, July 26, 2010
It's that time of year again.
Without fail, every few months or so the Big Oil and Big Food interest groups start their misinformation campaign in an effort to denigrate the U.S. biofuels producers.
Last week, as if almost on cue, a group opposed to domestic efforts to reduce our dependence on foreign oil began their usual song and dance.
A press conference led by the Grocery Manufacturers Association and other special interest groups was held to malign the benefits of homegrown renewable fuels.
Don't forget, this is the same group of folks who, a few years ago, waged a high-priced, inside-the-beltway smear campaign against ethanol for allegedly leading to higher food prices.
That myth was roundly dispelled.
Economists proved what farmers knew to be true - the higher cost of corn was responsible for just a tiny fraction of the increase in food prices.
So, while food manufacturers wanted consumers to believe that corn ethanol was doubling or tripling their grocery prices, non-biased observers knew the corn input costs were just pennies of the retail price of food.
However, with dozens of multi-billion dollar corporations and profits to protect, it's not surprising to see them attack our country's farmers and ranchers who are working to produce our nation's food, feed and fuel.
After all, they have a bottom line to look out for and pockets to line.
And now these same groups are at it again. They see a new opportunity to undermine our domestic biofuels industry.
They're now arguing that our nation cannot afford government policies to foster further growth.
In other words, they're arguing that the cost of energy independence is too high, and we can't afford it.
They'd prefer we increase our reliance on fossil fuels and imported crude oil. The unfortunate outcome of such attacks, however, is that less informed individuals begin to believe them.
I think it's important to review the true costs of imported fossil fuels.
In 2008 Americans sent over $450 billion to foreign countries to satisfy our demand for oil. At $80 a barrel, we'll send nearly $350 billion overseas this year.
We rely on foreign oil to meet 60 percent of our oil demand. And don't forget, much of the world's oil reserves are located in the Middle East.
According to the Energy Information Administration, oil price shocks and price manipulation by the Organization of Petroleum Exporting Countries have cost our economy about $1.9 trillion between 2004 and 2008.
Our need for oil accounts for half of our trade deficit.
The federal government's support for homegrown ethanol equals less than 2 percent of the money we'll send to Canada, Saudi Arabia, Mexico, Venezuela, Nigera, and others.
The domestic ethanol industry supports 400,000 green jobs here in the United States. Last year, ethanol contributed over $50 billion to our Gross Domestic Product.
It contributed $8.4 billion in tax revenue for the federal government.
The incentives we provide for ethanol production leads to a surplus of tax revenue for the federal treasury.
So, which is a better bargain? Being dependent of foreign countries for 60 percent of our energy needs at a cost of $350 billion? Or, keeping this money at home, creating green jobs, and increasing our national and economic security?
The choice is obvious.
So far I've only considered the economic costs.
Mr. President, this chart depicts just a small example of the environmental costs of our dependence on fossil fuels.
The first photo is one that we're all too familiar with by now - the explosion and ensuing oil spill at BP's Deepwater Horizon oil rig.
The other photo depicts land in Canada where oil is being extracted from tar sands.
The fact is, fossil fuels are getting more expensive to extract, and are likely to come at a greater environmental cost.
The alternative is homegrown, renewable biofuels.
Today, ethanol accounts for 10 percent of our transportation fuels. No other fuel alternative comes close to ethanol's contribution.
Domestically produced ethanol contributes more to our fuel supply than all foreign imports except Canada.
More ethanol means less greenhouse gas emissions. A University of Nebraska study found that ethanol reduces direct greenhouse gas emissions by 48 to 59 percent compared to gasoline.
Ethanol production continues to improve and increasing crop yields mean we're producing more fuel from less grain and fewer acres.
Ethanol producers are reducing their energy and water usage.
Finally, Mr. President, it's important that we consider the national security cost of our dependence on foreign oil.
Oil from the Middle East accounts for 20 percent of U.S oil imports.
Seventeen million barrels of oil are shipped each day through the single most important shipping chokepoint - the Strait of Hormuz.
Fifteen crude oil tankers pass through the Strait of Hormuz on average every day, with much of the oil headed to the United States.
Two of the other largest oil shipping chokepoints are at the Suez Canal and the Gulf of Aden off the coast of Yemen.
To determine the true cost of America's dependence on foreign oil, it's important to understand the costs to the taxpayer of defending and protecting these shipping lanes.
A New York Times editorial in the late 1990's calculated the true cost of a gallon of gas, including military costs, at $5 a gallon.
Last week, I questioned four-star retired U.S. Army General Wesley Clark on the true cost of gasoline. He estimated it to be around $7 to $8 dollars a gallon.
Homegrown ethanol produced in the Midwest doesn't need a military escort to gas stations on the East or West coast.
Homegrown ethanol doesn't need the Department of Defense to protect its transport from farm fields to consumers.
Again, our nation's investment in ethanol is a bargain, and it's increasing our economic and national security.
That's why it's important that we continue our support of this industry. Some have claimed that it's a mature industry, and it no longer needs our help.
This statement ignores the fact that ethanol is competing with a century-old industry dominated by Big Oil, which itself has received billions of dollars from the taxpayers for decades longer than has the ethanol industry.
Yet, ethanol detractors continue to undermine these efforts.
One organization estimates that a lapse in the tax incentive for ethanol would shut down 40 percent of the industry and result in the loss of 112,000 green jobs. Let me repeat - 112,000 jobs that rely on the production of ethanol.
We can't allow the ethanol industry to follow the path of the biodiesel industry, which is essentially shut down because this Congress has failed to extend their tax incentive.
While President Obama spoke in his address on Saturday about investing in homegrown, clean energy, 45,000 biodiesel jobs have vanished because of the lapse in the biodiesel credit.
President Obama touted the goal of creating 800,000 clean energy jobs by 2012. Why not take action today to extend the lapsed biodiesel tax credit and immediately put 45,000 Americans back to work?
The same thing could happen to the ethanol industry if we fail to extend the tax incentive.
If you undermine ethanol, you're putting out the welcome mat for dictators like Hugo Chavez.
Last week, the senior Senator from Arizona questioned the wisdom of our domestic renewable fuels incentives.
He was quoted as saying, "Maybe we will stop doing this damned foolishness called ethanol subsidies. It's one of the greatest rip-offs that takes place on the American taxpayers."
To those who would do away with our domestic ethanol production, I have one question: Which country should we look to for 10 billion gallons of fuel - Saudi Arabia? Venezuela? Nigeria?
Who would you rather support with your hard-earned money?
Hugo Chavez or the American farmer?
Supporting Chavez is insanity. Sending money to people who buy guns to fight us is insanity.
We shouldn't be reducing our use of renewable fuels. We should be increasing it.
We should produce all we can from corn, crop residues and other biomass.
We should increase the use of biofuels by mandating the production of flex fuel vehicles and increasing the availability of blender pumps.
Ethanol is here today. It's creating a cleaner environment, keeping money at home in our economy and increasing our national security.
Undermining the only renewable fuel that has the proven ability to accomplish these goals would be insanity.