From Mr Doug Berven.
Sir, By calling for an end to the renewable fuels standard or “biofuels mandate” in your editorial “Bloated biofuels” (March 21), you make a common and egregious error regarding the benefits of ethanol-blend fuels.
Gasoline jumped 43 cents from January to February this year. Contrary to the oil industry’s rhetoric as laid out in your editorial, ethanol actually helps keep gas prices down. The fact is, ethanol is significantly cheaper than today’s gas prices – approximately $0.80 less than wholesale gasoline costs. A variety of studies have consistently demonstrated that the increased use of ethanol in 2011 saved consumers money – anywhere from $0.89 to $1.09 per gallon. And, there is no evidence that the costs of renewable identification numbers (RINs) significantly diminish these savings. Simply put, your gas prices would be even higher without ethanol fuels.
The top five oil companies earned more than $118bn in profits last year. Trying to link gas prices to the cost of biofuels – much less to the renewable fuels standard – is not supported by the evidence and is out of touch with reality. The truth is simple: the 43 cent spike that consumers suffered in January went straight to the pockets of oil companies.
It’s time to stop using ethanol as a scapegoat for the increasingly outrageous behaviour of the petroleum industry. The biofuels industry is a growing sector that supports more than 400,000 American jobs and offers a promising alternative to the big oil monopoly. For cleaner fuel and lower prices, the Financial Times should be supporting robust biofuels policy – not fighting it.
Doug Berven, Vice President of Corporate Affairs, POET, Sioux Falls, SD, US
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