In 1973, Arab oil producers cut off exports to the U.S. to protest American military support for Israel in its war with Egypt and Syria. This brought soaring gas prices and it contributed to a major economic downturn in the U.S. Similar to the oil embargo in 1973, the recent military actions carried out by Russia in the Ukraine should remind the U.S. how easily oil can become an unreliable, expensive source of energy. Therefore, it is essential that we maintain policies such as the Renewable Fuel Standard (RFS), which helps foster innovations in renewables, such as advanced biofuels, and can lead us on a path towards energy independence.
In his piece, Ukraine Crisis Endangers Exxon’s Black Sea Gas Drilling: Energy, Stephen Bierman explains how easily political conflict can quickly impact the U.S. fuel supply:
“Crimea’s hastily organized vote this weekend on whether to leave Ukraine to join Russia is threatening Black Sea oil and natural gas drilling prospects coveted by Exxon Mobil Corp. and Eni SpA.
“Before violent protests in Kiev overthrew pro-Moscow President Viktor Yanukovych and Russian troops occupied parts of Crimea, a group including Exxon and Royal Dutch Shell Plc planned to spend $735 million drilling two wells about 50 miles (80 kilometers) from the region’s southwest coast.
“Today it’s not even clear whether the government in Kiev will have the power to award oil and gas licenses in Black Sea waters around the disputed region.”
Bierman continues on by noting his consultation with Julian Lee, an analyst at the Center for Global Energy Studies in London, who shines light on the uncertainty for future oil investment in the Ukraine:
“Given the situation, exploring the Ukrainian part of the Black Sea is unlikely to be high on the agenda of any international oil and gas company right now, said Lee. I can’t imagine any foreign investor wanting to commit people or money in the current state of uncertainty. The situation with Crimea currently is totally unpredictable.”
Global instability in the crude oil market means less access to fuel and higher gas prices for Americans. The AAA has said that “a relative lack of international distress could help keep gasoline prices from going as high this year as in previous years when incidents in Syria, Libya and elsewhere influenced the global oil market. But the conflict with Ukraine and Russia could change that.”
The Renewable Fuel Standard (RFS) has laid the foundation for further private investment in the domestic biofuels industry which includes conventional, advanced and cellulosic biofuels. It has helped generate jobs, revive rural economies, reduce oil imports, lower gasoline prices, reduce air pollution, and cut greenhouse gas emissions.
In response to the EPA’s 2014 RFS Proposal, BIO commented that the devastating cuts to RFS “will strand existing investments in advanced biofuels, curtail any further investment and development of future facilities, and put hundreds of thousands of existing and future jobs at risk.”
Changes to the RFS as proposed by the EPA will hinder the current work of the industrial biotechnology industry and the future work it has committed to do in order to get the U.S. on a path independent from a reliance on fossil fuels.