America Must Fix Its Fuel Supply Problem
As we enter this year’s summer travel season, the issue of fuel price stability remains top of mind for Americans. Last year’s volatility in consumer fuels prices has only heightened concerns, particularly as increased demand coincides with reduced energy supplies in the United States. As a result, Americans are anxiously watching gas prices and wondering when the next major fuel price spike will arrive.
This unfortunate scenario is of our own making. For too long, America’s fuel mix has been reliant on mercurial international partners instead of domestic producers. Our dependence on foreign fuel supplies helped set the stage for today’s high prices.
Washington should make it a top priority to correct this imbalance. By passing legislation and supporting regulations that strengthen and diversify domestic, low carbon liquid fuel energy production, we can guarantee more supply and stability in the marketplace – both of which can lower prices for American consumers.
But first, it is important to clarify the dynamics driving today’s erratic fuel prices. In 2021, America relied on Russia for 8% of our total fuel imports before banning shipments following the invasion of Ukraine. Most of this was in the diesel category due to our advanced refining system. Similarly, our country traded with members of the Organization of the Petroleum Exporting Countries (OPEC) for 13% of our total fuel imports before the organization announced surprise production cuts.
This foreign reliance has produced avoidable outcomes. For example, America’s diesel reserves are at their lowest in 30 years. And overtures to international energy producers who do not share our humanitarian or environmental values, like Venezuela, have damaged America’s international reputation.
We can – and must – do better. Instead, we should craft commonsense policies that reward domestically produced fuels that deliver greater emissions reductions. The motivation for this shift should be obvious: domestic low-carbon fuels will help insulate consumers from future international market volatility while simultaneously offering home-grown solutions to help meet America’s climate ambitions.
We can start by unleashing the full potential of America’s low-carbon fuel industry. Advanced biofuels, which are required by Congress to provide a minimum 50% reduction in carbon emissions offer a drop-in, home-grown alternative to imported fuels. These renewable, low-carbon fuels are derived from a wide range of feedstocks, agricultural and forest byproducts, and industrial waste, in some cases enabling America to transform literal trash into liquid treasure in the form of sustainable fuels. Better yet, we can deploy advanced biofuels using our existing national fueling infrastructure with little-to-no cost to American taxpayers.
Alongside other sustainable fuel technologies, advanced biofuels are an important tool to reduce our national carbon emissions. They can complement ongoing electrification efforts by fueling heavy-duty shipping vehicles – the airplanes, marine vessels, and long-haul trucks that power our economy. Plus, they would offer an invaluable opportunity to honor international carbon pledges by slashing emissions from the transportation sector, which currently accounts for most of America’s annual greenhouse gasses emissions.
Congress recognized the promise of America’s low-carbon energy producers in 2022 with the passage of the Inflation Reduction Act (IRA), which contained key provisions intended to stimulate and incentivize domestically produced low-carbon fuel sources. The effect of this landmark legislation for advanced biofuels has been immediate and palpable. Already, major airlines including British Airways, Qatar Airways, and Iberia Airlines have signed agreements with American sustainable aviation fuel producers to power their fleets in the years ahead.
But the IRA represents just one step in the journey toward a more robust and resilient domestic low-carbon energy sector.
It is important that Congress and the Environmental Protection Agency (EPA) maintain this momentum by passing policy and regulations that reflect ground truths and incentivize the production of low carbon fuels. However, the EPA’s latest Renewable Volume Obligations (RVO) rulings for 2023, 2024, and 2025, despite providing much needed certainty for our industry, missed the mark and sapped the progress made by the IRA by undervaluing the volumes of advanced, biomass-based diesel, and cellulosic fuels available in the market by 500 million gallons per year. It was a missed opportunity – and one that we can ill afford to repeat in the years ahead.
It is imperative that policy and environmental leaders in Washington get this right for Americans and the planet. With the right policies, we can reduce our dependence on foreign energy producers and make promising progress toward our national climate ambitions. So let’s roll up our sleeves and build a brighter, more prosperous future for all.
Michael McAdams is president of the Advanced Biofuels Association