An economic analysis released today by the Renewable Fuels Association highlights the substantial positive impact of an 8 billion-gallon RFS. Citing the importance to job creation and rural America, the RFA urged the U.S. Senate to adopt an 8 billion-gallon per year renewable fuels standard (RFS) as part of its comprehensive energy legislation.
According to an analysis conducted by John Urbanchuk with LECG, LLC, establishing an 8 billion-gallon RFS between 2005 and 2012 would:
- Spark $6 billion (2005 dollars) of new investment to build 4.3 billion gallons of new ethanol capacity;
- Add nearly $200 billion (2005 dollars) to GDP;
- Generate an additional $43 billion (2005 dollars) of household income for all Americans;
- Create more than 230,000 new jobs in all sectors of the economy;
- Displace over 2 billion barrels of crude oil;
- Reduce the outflow of dollars largely to foreign oil producers by $64.1 billion (2005 dollars); and,
- Lessen Americaâ€™s dependence on imported oil from an estimated 67.4% to 62.3%.
"The goal of an RFS is not to just keep pace, but to displace imported petroleum and enhance U.S. energy security," says RFA President Bob Dinneen. "Ethanol production of 4 billion gallons this year represents approximately 3% of the nationâ€™s motor fuel demand. Using the Department of Energyâ€™s projected growth in gasoline demand, 5 billion gallons of ethanol in 2012 would represent only about 3% of domestic motor fuel supplies. Thus, a 5-billion gallon RFS represents no new marketplace penetration for renewable fuels."
Dinneen continues: "On the other hand, establishing an 8 billion gallon RFS would have meaningful impacts on the U.S. economy and energy security. The ethanol industry has proven it can play a large role in addressing the economic and energy needs of this country. Enacting an 8 billion gallon RFS will unlock this potential."