As lawmakers return to Washington, how far will the Senate get on energy policy ahead of the midterm elections? During today's OnPoint, Tom Buis, CEO of Growth Energy and the former president of the National Farmers Union, discusses the bottleneck on Department of Energy loan guarantees for renewable energy industries. Buis talks about expanding fuel choice in the United States and give his take on energy legislation prospects heading into the fall.
Monica Trauzzi: Hello and welcome to OnPoint. I'm Monica Trauzzi. Joining me today is Tom Buis, CEO of Growth Energy and the former president of the National Farmers Union. It's nice to have you back on the show.
Tom Buis: It's great to be here, Monica.
Monica Trauzzi: Tom, your company, along with several other biofuels and renewable energy companies, are calling on DOE to speed up the distribution of loan guarantees for renewable energy. If the money is not distributed quickly, where do you think we might see it go?
Tom Buis: Well, you need that investment in the infrastructure and I think everyone wants to move down the road to new generations of biofuels. And, really, the foot dragging on those loan guarantees has had a huge impact, that along with the general economy and the lack of available investment out there. And that's one component to really get us to a 50-state solution for biofuels. The other is the lack of a marketplace. Investors, lenders, anyone want to look to see if you're going to have a market for the product. Currently, the ethanol industry is capped at 10 percent ethanol that can go into our nation's cars. We obviously are trying to address that issue as well. We have a waiver that's been pending since March of 2009 to increase the amount that can be blended from 10 percent to 15 percent and we're expecting a decision, sort of a two-part decision. One in September on the 2007 and newer cars and then in November for 2001 and newer cars.
Monica Trauzzi: So, if your industry is not seeing the benefits of these loan guarantees, who is?
Tom Buis: We just don't think they're going out and I think oftentimes what happens in energy is people look down the road, instead of the existing technologies and alternatives today. Ethanol is the current alternative to foreign oil. It's the biggest alternative to foreign oil. We're virtually 10 percent of the nation's fuel source. We can be more. And the RFS mandates of 36 billion gallons by 2022 will put our nation significantly down the road. But if you don't have a market in order to sell it, you're not going to be able to, A) meet the mandates or, B) decrease our dependence on foreign oil.
Monica Trauzzi: And this sort of begs the question, is this a signal that the full speed ahead approach that we saw on ethanol and renewables is sort of slowing down right now?
Tom Buis: Well, if you look back since the beginning of OPEC, which, by the way, is celebrating their 50th anniversary this week, if you look back over the last 40 years since the first OPEC oil embargo in 1973, our nation seems to get all excited about moving forward when we have a crisis and an economic shock or a military skirmish over oil. But then when things start to settle down and the price goes down on oil and they start pumping more, it's like a light switch. We go off. We kind of go back to sleep. We're hitting the snooze button. But if you look at all the oil shocks this nation has experienced over the last 40 some years, we can't afford to continue to go to sleep because in the early 70s, that first embargo, we were counting on about 25 percent of our energy coming from foreign countries. Today it's almost two-thirds. That continues to grow and if we don't do something about it and continue to move forward without going back to sleep, we'll be dependent on foreign oil for the next 50 years and it's not good for our nation. It's not good for our economy. It's not good for jobs. It's not good for our national security.
Monica Trauzzi: Let's talk about the recession for a moment. Despite the fact that the administration has put more money and more emphasis towards green jobs, we haven't seen those job numbers come back up. Do you feel that the administration is now stepping away from green jobs in order to get those job numbers up?
Tom Buis: Well, I hope not and we've been encouraging them for quite some time. As I mentioned, the waiver that we filed to increase the amount of ethanol into our fuel from 10 percent to 15 percent, would easily create over 100,000 new jobs, jobs right here in America that cannot be outsourced. Moving to what we want to see done in energy legislation, we call the Fueling Freedom Plan, where we permanently scale this blend, while we have flex-fuel vehicles produced in the United States in mass quantities and we have the feeling distribution through blender pumps so the consumer can make that choice will continue to develop jobs here. And, again, we spend $1 billion a day, 300 and some billion dollars annually, that goes into other country's economies, funds and their economies, saps our resources, economic resources here to develop energy, to build out the infrastructure, education, whatever you need, our priorities, we're watching go out because of our addiction to foreign oil. We think there's a better way. We know there's a better way.
Monica Trauzzi: If you give consumers a choice on fuel, like you're suggesting in the Fueling Freedom Plan, what guarantee is there that they would choose ethanol, for example?
Tom Buis: Well, because we're the cheapest, most competitive fuel in the world. We can produce ethanol cheaper than gasoline and we don't have a production problem, we have a market access problem. So, what we're saying is give us that market, let us compete. We know we can compete. It's better for the consumer. The consumer gets to make the choice under the scenario that we've outlined, as opposed to a consumer being dictated by the oil distribution process and continue our addiction to foreign oil.
Monica Trauzzi: What are the impacts of the BP oil spill on your company and your industry?
Tom Buis: Well, I think the impacts just, again, highlight some of the negatives about depending everything on fossil fuels. If you take the ethanol industry, we produce, ethanol emits 60 percent less greenhouse gas emissions than gasoline, so it's better for the air. If you look at the impact on our water system or the Gulf of Mexico of an oil spill, that takes a lot of cleanup over a number of years. You don't have that problem with ethanol. So we think we'll continue to evolve and keep getting greener. Our competition, deep-water drilling, shale oil, it becomes much more difficult and much more of a challenge to the environment, as well as the resources.
Monica Trauzzi: So, heading into the fall, as Congress comes back into town, what do you think the prospects are that they'll actually take up some form of energy legislation?
Tom Buis: Well, Monica, I've been in town a long time and I learned a long time ago not to predict what these guys under the Capitol dome will do or not do, because you'll probably have to eat your words. But I think if they do the right thing, you know, it's been, in 2008 we had record gasoline prices. We had $150 a barrel oil. We had gasoline prices $4.50 a gallon and precipitated the biggest economic downturn this nation has seen since the Great Depression. We can't afford to continue to sit back. And hopefully the partisan divide will be bridged and these guys have worked together for what's best for the nation. And, you know, if we're going to become less dependent on foreign oil, you just can't flip a switch and it happens overnight. It's going to take a lot of steps and that next energy bill is really key.
Monica Trauzzi: All right, we're going to end it there. Thank you for coming on the show.
Tom Buis: Great, thank you for being here.
Monica Trauzzi: Thanks for watching. We'll see you back here tomorrow.
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