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Breaking our cars' addiction to oilConsumers may be enjoying some relief at the pump, but another energy shock is likely just around the corner. Costs for heating oil, natural gas and electricity are expected to soar to record levels this winter, putting renewed pressure on household budgets. The oil market continues to fluctuate in dramatic fashion, baffling experts, investors and policy makers. Just last month, gas prices surged in the immediate aftermath of Hurricane Ike, and we all experienced sticker shock at the pumps--with some stations in the U.S. charging as much as $5.09 a gallon. Ike's destructive force on the Gulf Coast, which represents about 20 percent of the nation's oil processing capacity, painfully reinforced the effects of supply disruption as well as the limitations we face by spending $1 billion per day on imported oil. According to the U.S. Energy Information Administration, world energy demand will continue to grow, perhaps by 50 percent over the next two decades. This means energy prices will steadily rise, unless we can reduce our dependence on foreign oil. Congress recently sent President Bush a spending bill to lift a ban on offshore drilling and help automakers shift to more energy-efficient vehicles. And both presidential candidates have laid out energy plans that would invest billions on new technologies and alternative energy sources. These are steps in the right direction, but there's a problem. These are long-term solutions, and very little is being done to mitigate the impact of high energy costs on consumers today. Billionaire energy investor and oilman T. Boone Pickens says we need a bridge to the future--a plan to reduce America's foreign oil dependence by harnessing domestic energy alternatives, buying time to develop new technologies. He's absolutely right, and the good news is the first sections of the bridge are already in place. Domestically produced oil and natural gas, combined with nuclear, wind, solar and biofuels, all are important parts of this bridge to energy independence. Conventional biofuels like ethanol are already helping to reduce the cost of gasoline by up to 35 cents per gallon, according to the U.S. Department of Energy. For a typical household, that is a savings of about $300 per year. In his 2006 State of the Union address, President Bush pronounced, "...we have a serious problem: America is addicted to oil." I see it a little differently. It's not America that is addicted to oil, it's our cars. For over a century, automobile manufacturers have been the petroleum industry's number one customer. Until recently, manufacturers had no incentive to produce flex-fuel, hybrid or electric vehicles. Consumers had no choice but to fill their tanks up with gas. Detroit has responded to consumers' demands for the increased use of biofuels by producing more fuel-efficient vehicles. But still fewer than one in 10 new vehicles sold in the U.S. have flex-fuel engines, meaning they can operate on gasoline-ethanol blends up to 85 percent ethanol. The U.S. has invested more than $1 billion to spur the growth of a strong, sustainable domestic biofuels industry. This investment promises to reduce America's gas consumption by 20 percent within a decade, promoting a cleaner environment and keeping more of our energy dollars right here at home. We continue to aggressively pursue technologies to create advanced biofuels, and we're working diligently on constructing the biofuels section bridge away from oil. On Sept. 24, John Mizroch, acting assistant secretary for Energy Efficiency and Renewable Energy, U.S. Department of Energy, credited corn-based biofuels production with paving the way for use of "next-generation, non-feedstock" sources such as cellulosic energy crops. There is an ample supply of biofuels and the industry is on track to meet demand well into the next decade. If we want to drive down the road toward energy independence, we need to start by making smarter decisions that make it easier for consumers to make their own fuel choices. First, we must require that all new vehicles produced and sold in the U.S. have flex-fuel engines. If we start tomorrow, it will still take seven years to transition half the fleet to flex-fuel. Second, we must revise our energy tax and subsidy policies to promote domestic exploration, production and conservation, and discourage the continued use of foreign oil. And third, we must offer consumers their choice of fuels at the pump. The ethanol industry is working on the third point today. Just down the road from ICM headquarters, we recently installed blender pumps at TJ Convenience, transforming the station into a flex-fuel provider that offers ethanol-blended fuels ranging from E10 to E85. In the two months since installation, patronage has more than doubled. The canopy above the station proudly advertises "The Power of Choice." We're trying to provide exactly that by giving our cars, and American consumers, the power to support a sustainable energy strategy by choosing domestically produced renewable fuels. --Dave Vander Griend, president and CEO of ICM, Inc., one of the nation's largest biofuel technology companies. ICM is headquartered in Colwich, Kan. 10/13/08 Date: 10/8/08
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