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Today as U.S. drivers pull up to the pump, they see gas prices at levels that most of us thought we’d never see again. As summer driving season approaches, the traditional family road trip looks a lot more attractive. Some have even argued that the need for renewable alternatives is gone.
But dig down a little deeper and it becomes clear that the low price of oil is making a case for more renewable fuel rather than less.
The prices we see today are thanks to a decision made by one nation – Saudi Arabia – to not cut back its production as it has under similar market conditions in the past. The Saudis are putting U.S. oil producers under a stress test to see how well they hold up when margins get slim. And if one decision by one OPEC nation can cut our oil prices in half, imagine what they can do if they decide to restrict the market rather than flood it.
The fact is our economy depends on the good will of nations far from our shores, and that’s a problem. The only solution is greater consumer choice at the pump, and the most abundant and cost-competitive option today is ethanol.
“How is POET doing with gas prices so low?” is a common question I hear. My answer is that POET is doing fine, as it always has. Market fluctuations are a part of the business, and we’ve built this company with that understanding. We’ve seen years where corn prices rose to $8 per bushel, and we’ve seen years like 2014 where they fall to $3. We’ve seen gas prices move by $2 per gallon in a relatively short time. Everyone knows that low gas prices are not here to stay. Fluctuations are a part of the game that we’ve come to expect.
Ethanol saves consumers money at the pump by expanding our fuel supply, by providing a lower-cost option and by changing the dynamics of U.S. trade, among other things. By one estimate, ethanol has saved Americans more than $1 per gallon thanks to those factors, and third-party analysts have shown that ethanol is saving consumers billions of dollars per year simply by offering a competing product in the marketplace.
And those aren’t the only reasons we have prioritized renewable fuel production. Ethanol is clean octane, replacing harmful and expensive chemicals in gasoline that damage human health. It is economic stability across rural America. And it is national security, proving that there is no reason for us to continue to funnel dollars into corrupt parts of the world when we are capable of providing energy for ourselves.
U.S. Secretary of State John Kerry recently spoke about the true costs of our country’s use of fossil fuels. He said that we can’t only look at our immediate energy needs. We need to consider the cost of pollution. “We have to factor in the cost of survival.” With that in mind, our pursuit of clean energy today is far more affordable than paying for the negative consequences of fossil fuels in the future.
Our nation, through the Renewable Fuel Standard, took the long view and recognized that investment today has far-reaching benefits. Short-term market fluctuations don’t change that reality.
America needs ethanol, and POET’s here to provide it now and in the future.
