API President Leaves Biofuels, Biochemicals out of his "State of American Energy" Report

By Erin Voegele | January 11, 2013

Despite the fact that approximately 10 percent of our nation’s liquid fuel supply is currently comprised of biofuel—and that percentage is poised to grow significantly under the renewable fuel standard (RFS)—Jack Gerard, president and CEO of the American Petroleum Institute, failed to utter the word “biofuel” during his third-annual State of American Energy report to Congress this week.

Gerard did, however, have a lot to say about oil and natural gas.

His only mentions of renewable energy were to say that:

“There is no question we will need more energy to meet the needs of an expanding economy and provide for a growing population in the years ahead…and oil and natural gas will be vital to that growth, even as we expand our use of renewable energy and become more energy efficient. We need more energy of all types to meet the rising demand of a vibrant country. And we can produce more of that energy right here at home.”

And, that:

“We need more energy of all types. Even as we dramatically expand renewable energy sources and increase energy efficiency, fossil fuels have an important role to play.”

A document, title “The State of the American Energy Report: 2013,” posted to the API website, does make brief mention of biofuels. Under the heading Leaders in Biofuels, the report states the following:

“The U.S. refining sector’s research and development efforts in biofuels are significant, and in partnership with universities, alternative energy companies and the scientific community, U.S refiners will continue to invest in the development of renewable and conventional fuels. One company is committed to spend $600 million or more to research the feasibility of turning algae into a bio-oil. Another is focused on “green crude,” or biomass-based fuels with a chemical composition similar to crude oil. This green crude is similar to products already made from crude oil and would require no special infrastructure or vehicles to be processed, stored or used, and is compatible with current engine technology.218 U.S. refiners also blend gasoline with corn ethanol to meet the requirements of the Renewable Fuel Standard (RFS), passed as part of the Energy Independence and Security Act of 2007. In 2011, refiners blended 13.9 billion gallons of ethanol into gasoline.”

 While I understand that the API, by definition, is a petroleum advocacy organization, given the number of oil companies that are collaborating and/or investing in the biofuels and biochemicals industry, it would be helpful to see more acknowledgement of what is likely to be a significant future component of the refining industry represented in their report.

In a reaction statement released by Growth Energy, Tom Buis said, “While oil companies talk about the future of energy in this country, they seem fixated on a finite resource and fail to acknowledge that renewable fuels will play an important role in meeting the nation’s future energy needs. While they may mention an ‘all of the above’ approach, the reality is they continue to pursue an ‘all of the above, except renewables.’”

I’m inclined to agree. Too often renewable energy resources are left out of the “all of the above” approach pushed by some industry leaders and politicians.

The Biotechnology Industry Organization has also weighed in on the issue.  “Experts are projecting an American energy renaissance and achievement of energy self-reliance within a few decades,” said Brent Erickson, executive vice president of BIO’s Industrial and Environmental Section. “The International Energy Agency’s latest World Energy Outlook predicts that the United States will become a net energy exporter by 2030. But the report also shows that renewable fuels and energy efficiency will make substantial contributions to this energy renaissance if there is long-term, stable policy in place. Still, the petroleum industry’s trade organization contrarily calls for long-term continuation of oil and gas subsidies and a discontinuation of the primary policy for opening the fuel market to competitively priced renewable fuels. The IEA report notes that subsidies to the oil and gas industry continue to distort world energy markets and exacerbate environmental concerns. Notably, these subsidies have continued as the petroleum refining sector has shuttered refineries. API clearly is not addressing the state of all U.S. energy resources. Stable, long-term policy and economic certainty are necessary for the growth of all energy producers in the United States. We cannot have a secure American energy future without alternatives. We need an all of the above approach to transportation fuels that is in the best interests of American consumers and the U.S. economy.”