LOS ANGELES, Dec. 5 (UPI) -- On a day when energy policy was again a headline topic on Capitol Hill, the ethanol industry Wednesday unveiled a rosy new study that concludes that a government mandate for increased use of renewable fuels in gasoline would bring great economic benefits to the United States over the next 15 years.
An analysis of the economic and national security aspects of the so-called renewable fuel standard found that a proposed increase in the amount of ethanol used nationwide to 8.8 billion gallons by 2016 would both cut oil imports by nearly 302 million barrels per year and create as many as 300,000 new jobs.
"A renewable fuels standard, as proposed by Senators Chuck Hagel, R-Neb., and Tim Johnson, D-S.D., would reduce our dependence on foreign oil, improve our trade deficit, boost farm income, create new opportunities for rural businesses, and reduce farm program costs," said John McClelland, director of energy and analysis for the National Corn Growers Association.
The survey was released on the day Senate Democrats introduced their version of an energy bill, which provides for increased use of renewable fuels. President Bush had delighted the ethanol crowd late last month when he praised the "gentle" impact ethanol had on the environment.
Wednesday's survey was based on a 4 percent increase in the amount of renewable fuels used in the United States, the primary of which is corn-based ethanol that is used as a clean-burning oxygenate in gasoline. Such an increase would lead to the use of 7.6 billion gallons by 2016.
The ethanol industry and the Midwest farm states have been chomping at the bit anticipating a major increase in the use of their product, particularly since the petrochemical MTBE, the other major gasoline oxygenate currently in use, has been on the outs due to groundwater contamination and possible links to cancer.
The oil industry, which prefers MTBE to ethanol due to chemical characteristics that make it easier to blend, has argued that the cancer link is not proven and that groundwater problems can be eliminated by fixing leaky underground storage tanks.
The Oxygenated Fuels Association has warned that switching to ethanol would cause a number of supply problems and would add to the cost of gasoline.
There were also concerns that the nation's capacity to produce ethanol is still too small to support such a switchover, particularly in California where Gov. Gray Davis is expected to decided in a few weeks whether to continue with the phasing out of MTBE in his state or to push the deadline back in order to give supply more time to catch up with the state's potentially enormous demand.
The possibility of such delays doesn't sit well with the ethanol industry and they again urged Congress to make ethanol the law of the land.
"We have a real opportunity to stop the growth in imported energy," said Bob Dinneen, president of the Renewable Fuels Association. "The ethanol industry is prepared to build on our growth of the last two years. We urge Congress to take this historic opportunity to enhance energy independence, boost farm income, and promote a renewable, clean-burning fuel."
