October 23, 2018
By Jim Talent
Following the mysterious death of columnist Jamal Khashoggi, Washington was hit with a stark reminder that America remains glaringly vulnerable to economic threats from the oil oligarchs of the world. Saudi Arabia quickly issued a warning that any sanctions will be met with “greater action” and that it plays a “vital role” in the global economy.
The implication was clear. Any attempt to hold the Saudi government accountable could lead to a crippling spike in oil prices, care of the largest oil producer in the Middle East. Meanwhile, American fortunes remain subject to the global politics of oil. Without Saudi cooperation, it would be all but impossible for President Trump to press ahead on efforts to neutralize hostile forces in Iran. Why? Only Saudi Arabia would be able to replace Iranian crude exports locked in by American sanctions.
Petroleum boosters like to claim that fracking broke our addiction to foreign oil, but as the Energy Department pointed out this month, the changing trade balance is still dominated by crude oil imports. Net crude imports account for a fifth of total consumption in the United States. The need for homegrown alternatives remains as strong as ever, particularly as fuel prices climb back to nearly $3 per gallon.
Fortunately, policymakers have at least one time tested tool to shield American consumers from international intrigue, the renewable fuel standard, a bipartisan policy I championed in the Senate back in 2005. This federal program allows homegrown biofuels to supply a growing share of our energy needs, which is currently about 10 percent of all motor fuel. The renewable fuel standard has been successful in protecting American energy security, and at no cost to consumer or taxpayers.
Conventional ethanol is a highly competitive fuel, costs about $1.30 per gallon, and it gets no federal subsidies or tax breaks. Every gallon added to the fuel mix holds down prices, while providing an ecofriendly octane boost for better engine performance, replacing toxic additives like lead. Ethanol also cuts down on smog and reduces carbon emissions by an average of 43 percent, according to federal data. Best of all, the United States is the top producer and exporter of ethanol in the world, and no other nation can set the prices paid by American drivers.
There are more than 200 ethanol plants distributed all throughout the heartland, creating hundreds of thousands of good jobs in rural areas where biofuel production is a pillar of the farm economy. Nearly every dime spent on ethanol stays right here in the United States. In a free market, higher ethanol blends like E15 would be standard options at the fuel pump, giving every consumer an opportunity to save 5 cents to 10 cents per gallon. But while more retailers are adding options, the fuel supply chain remains tightly controlled by a few oil companies and the foreign cartel. They oppose consumer access to E15 for the same reason they oppose the renewable fuel standard. They know that consumers, not petroleum producers, win when drivers have a choice at the pump.
That is why President Trump has proclaimed his support for the renewable fuel standard and pledged to lift seasonal Environmental Protection Agency restrictions on the sale of E15. A boost for American biofuels is a blow against forces that would wield oil as a weapon against our national interests. Congress should rally behind the effort and fight back against efforts to cheat consumers out of affordable and reliable energy options.
Jim Talent, a former Republican senator and representative from Missouri, championed the creation of the renewable fuel standard in 2005. He is co-chairman of Americans for Energy Security and Innovation, a member of the U.S.-China Economic and Security Review Commission, and a senior fellow at the American Enterprise Institute and the Bipartisan Policy Center.
Read the original article: Saudi Arabia Shows Need to End Addiction to Middle Eastern Oil