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Posts Tagged ‘ethanol’
November 15th, 2013 at 3:46 pm
Brace Yourself: Feds Take Sensible Step on Energy Policy
Posted by Troy Senik Print

It’s rare that we get anything other than green inanity in federal energy policy these days, which is why this news is so welcome. From Ben German at The Hill:

The Environmental Protection Agency (EPA) is cutting the amount of ethanol and other biofuels that must be blended into the nation’s fuel supply, a victory for oil companies that call the federal ethanol mandate unworkable.

On Friday, the EPA proposed draft 2014 blending volumes under the federal Renewable Fuel Standard that are lower than the 2013 requirements, and far less than called for in a 2007 law that expanded the mandate.

The EPA is proposing to require 15.21 billion gallons in 2014, down from 16.55 billion gallons in 2013, marking the first time the agency has lowered the target from the prior year.

A senior administration official said the Obama administration is firmly supportive of biofuels, but said  “market, infrastructure and other constraints” warrant paring back the mandate.

If you’re wondering when the hell the Obama Administration actually started worrying about the real-life effects of their policies, the answer is: when it put them at cross-purposes with a well-financed lobby. As the Wall Street Journal notes:

The EPA says it is trying to fix a problem known as the “blend wall,” which occurs when the annual requirement mandated by Congress exceeds the amount of ethanol that can be mixed into conventional blends of gasoline.

Oil companies and refiners have been warning of the blend wall for several years. If the EPA had stuck to Congress’s original target, refiners said they would have hit the blend wall in 2014 for the first time.

Which, of course, the ethanol lobby is using as an argument that this whole thing is one big gift from the government to “big oil.” That’s pretty rich coming from an industry that wouldn’t exist at any substantial scale without political collusion.

What’s the difference between ethanol and gasoline? You don’t need to pass laws to create a market for gasoline. The oil industry isn’t looking for special favors in this case; it’s looking from relief from a government-imposed drag on its business. The ethanol folks, meanwhile, are the ones trying to use state power to force people into buying their product. Which one sounds more corrupt to you?

As Drew noted earlier this week, ethanol is one big disaster. It doesn’t work in terms of economics, it doesn’t work in terms of energy, and it doesn’t work in terms of the environment. In a perfect world, we would’ve been able to abolish its mandate outright. In this flawed one, seeing it reduced at any level is a welcome change of pace.

November 12th, 2013 at 2:56 pm
The AP Condemns Government Ethanol Policy

You could almost hear environmentalists’ jaws hit the floor this morning when they opened their newspapers and took to their phones and computers for their morning news. In a fierce 4,150-word exposé, the Associated Press dispelled any notion that ethanol is the wonder cure for what ails the environment.

The AP points out that the explosion in corn farming as a result of government ethanol mandates have damaged land, polluted drinking water from fertilizer runoff, and killed aquatic life in rivers and lakes.

To top it all off, the article notes that, “The government’s predictions of the benefits have proven so inaccurate that independent scientists question whether it will ever achieve its central environmental goal: reducing greenhouse gases.”

At best, according to the article, ethanol is only 16% better than gasoline when it came to carbon dioxide emissions. And that small 16% benefit comes at a tremendous cost to the environment:

The consequences are so severe that environmentalists and many scientists have now rejected corn-based ethanol as bad environmental policy. But the Obama administration stands by it, highlighting its benefits to the farming industry rather than any negative impact.

Farmers planted 15 million more acres of corn last year than before the ethanol boom, and the effects are visible in places like south central Iowa.

The hilly, once-grassy landscape is made up of fragile soil that, unlike the earth in the rest of the state, is poorly suited for corn. Nevertheless, it has yielded to America’s demand for it.

‘They’re raping the land,’ said Bill Alley, a member of the board of supervisors in Wayne County, which now bears little resemblance to the rolling cow pastures shown in postcards sold at a Corydon pharmacy.

All energy comes at a cost. The environmental consequences of drilling for oil and natural gas are well documented and severe. But in the president’s push to reduce greenhouse gases and curtail global warming, his administration has allowed so-called green energy to do not-so-green things.

The AP’s stunning article should send a strong message to Washington about the failure of federal ethanol policies.

About 17,500 newspapers and websites are currently featuring the piece, according to a web search.

May 27th, 2011 at 5:30 pm
Romney Supports Ethanol Subsidies

Or, to use Romney’s phrasing, “I support the subsidy of ethanol.”  Forget the passive voice; Mitt Romney is actively standing on his principles!

Two weeks ago, the former Massachusetts governor has defended his version of an individual mandate in health care.  Now, he’s declaring fealty to a $5 billion program to create a source of energy the free market will not support.

In 2008, Romney was tagged as being inauthentic because he tried to remake himself into a social conservative when he’s really more a country club Republican.  With his background in big business, Romney’s 2012 dalliances with corporate welfare may be more authentic, but they risk being out-of-step with free market tea partiers.

Mitt Romney seems like a genuinely nice, earnest guy.  Too bad he’s just not a conservative.

May 24th, 2011 at 3:55 pm
Don’t Sell Pawlenty Short
Posted by Timothy Lee Print

It is well known throughout the halls of CFIF that one challenges our own Troy Senik at one’s own risk.  That principle carries additional weight on a week in which George Will, the dean of conservative commentators, cited Troy by name in his column.

In a fit of feistiness, I’ll nevertheless do the unthinkable and metaphorically run down those same halls with exposed scissors by responding to Troy’s thoughtful ricochet.com piece “Presidential Race Freefall.” In his column, Troy laments Indiana Governor Mitch Daniels’s decision not to run for president in 2012, saying, “we’re essentially left with Huntsman, Pawlenty, or Romney.  Out of that group, Huntsman is too moderate, Romney is too elastic, and Pawlenty is more acquittable than embraceable.”  He concludes with a fear that, “it’s time to start proceeding to the exits in orderly fashion.”

Those are certainly understandable and justifiable sentiments.  But I have a hunch that a lot of people may be selling Pawlenty short.  Consider that he won the relatively liberal state of Minnesota’s highest office not once, but twice.  That accomplishment included a reelection victory in 2006, a devastating year for anyone running with an “R” next to his or her name, particularly in a state like Minnesota.  In fact, the Democrats recaptured both state legislative houses that November.  So we’re not talking about a candidate whose campaign for national office rests on a flimsy resume constructed in the fair weather of some deeply red state .  Pawlenty’s feat becomes even more impressive when one considers that despite governing a state so blue that it was the only one to support Walter Mondale over Ronald Reagan, he was one of only four governors to earn an “A” grade for fiscal management in 2010 from the Cato Institute.  Notably, Governor Daniels earned a “B” that year.  Then, in announcing his candidacy in Iowa yesterday and appearing afterward on Rush Limbaugh’s show, Pawlenty boldly called for an end to ethanol subsidies from which many in Iowa benefit.

In other words, Pawlenty is a man who has managed to win in difficult electoral environments while maintaining a remarkably strong conservative record.  There may be some steel beneath that mild Clark Kent exterior.

May 16th, 2011 at 1:38 pm
Gingrich’s “Voodoo Economics” Moment?

During the 1980 presidential campaign, Republican candidate George H. W. Bush decried Ronald Reagan’s supply-side tax cuts as “voodoo economics” because the policy promised to lower tax rates and generate more production, and thus more tax revenues.  Bush’s denunciation of Reagan’s economic vision was a proxy for Keynesian thinkers in both parties, who thought (and think) that tax reductions spur consumption (demand), not production (supply).

Of course, Bush lost to Reagan in the Republican primary that year, in part because Reagan had a more compelling message: let’s cut taxes to get the economy growing instead of cutting them simply to reduce spending.  Moreover, Bush was wrong because Reagan’s policies worked.

This weekend, 2012 presidential candidate Newt Gingrich slammed Rep. Paul Ryan (R-WI) and the latter’s “Path to Prosperity” budget proposal as “right-wing social engineering.”  Why?  Because Gingrich thinks changing the way Medicare operates – from straight government subsidy to vouchers – is too “radical.”

But that isn’t stopping Gingrich from continuing to support an individual mandate to buy health insurance.  (Like fellow contender Mitt Romney (R-MA), but unlike President Barack Obama, Gingrich wants the individual mandate at the state, not federal, level.)  So, in Gingrich’s mind, transforming Medicare from a defined benefit into a defined voucher is “radical,” but mandating individuals to buy health insurance is not?

When Reagan adopted the mantra of economic growth through across-the-board tax cuts in 1980, he gave voters a clear alternative to the shared scarcity narrative being peddled by politicians in both parties.  Ryan’s budget proposal is based on Reagan’s insight that less taxes and more growth sells; less choice and more government mandates do not.

Like Reagan, whoever wins the Republican presidential nomination next year will have to make some accommodation with Ryan’s economic vision.  Downsizing – whether it’s freedom, opportunity, taxes, or spending – isn’t enough of a message to create the kind of majority needed to enact the kind of policy changes that spur real private sector growth.  With positions supporting ethanol subsidies and state level individual mandates, it sounds like Newt Gingrich is more comfortable playing the elder Bush’s role in this campaign.

February 17th, 2011 at 7:47 pm
Famous Family Farmer Urges Cuts to Ag Subsidies

Along with his status as America’s most famous military historian and classicist, Victor Davis Hanson is also the operator of a family farm in California’s San Joaquin Valley.  In a recent article for RealClearPolitics, VDH speaks from experience about the disastrous state of U.S. agricultural policy:

We need a drastic reset of agricultural policy. The use of prime ag land to grow corn varieties for ethanol biofuel makes no sense. Why divert farmland for fuels when the world’s poor are short of food, and there are millions of un-farmable areas in Alaska and the arid West, as well as off the American coast, that are either not being tapped for more efficient gas and oil or are only partially exploited?

When North Americans do not fully use their own fossil-fuel resources, two very bad things usually follow: 1) someone else in Africa, Asia or Russia is far more likely to harm the environment to provide us oil; 2) precious farmland will be diverted to growing less-efficient biofuels instead of food – and billions worldwide pay the price.

No supporter has ever been able to explain why the advent of massive subsidies over the last half-century coincided with the decline, not the renaissance, of “family farmers.” Nor has anyone offered reasons why cotton, wheat, soy, sugar and corn are directly subsidized, but not, for example, nuts, peaches or carrots.

January 31st, 2011 at 12:01 pm
Feisty Start to 2012 Race: Newt Picks Fight with Wall Street Journal
Posted by Timothy Lee Print

Newt versus The Wall Street Journal editorial board – the unofficial 2012 Republican campaign is off to a very lively start.

On January 22, the Journal ran a commentary entitled “Amber Waves of Ethanol” in which it criticized federal ethanol subsidies.  It noted that, “Four of every 10 rows of corn now go to produce fuel for American cars or trucks, not food or feed,” which does nothing to improve the environment or our reliance on foreign oil, but wastes billions in taxpayer dollars and drives food price inflation.  Likely 2012 candidate Newt Gingrich responded in Iowa last Tuesday, repeatedly referring to himself “as an historian” and accusing the Journal as part of a sinister cabal, saying, “Obviously big urban newspapers want to kill it because it’s working, and you wonder, ‘What are their values?’”

This morning, the Journal responds in its lead commentary entitled “Professor Cornpone.” This dispute, it says, symbolizes the larger fight “between the House Republicans now trying to rationalize the federal fisc and the kind of corporate welfare that President Obama advanced in his State of the Union”:

Given that Mr. Gingrich aspires to be President, his ethanol lobbying raises larger questions about his convictions and judgment.  The Georgian has been campaigning in the Tea Party age as a fierce critic of spending and government, but his record on that score is, well, mixed…  Now Republicans have another chance to reform government, and a limited window of opportunity in which to do it…  So along comes Mr. Gingrich to offer his support for Mr. Obama’s brand of green-energy welfare, undermining House Republicans in the process.”

Regardless of one’s views toward Mr. Gingrich as a potential candidate, the fact that the race is already lively with substantive policy debate is a healthy sign.

January 10th, 2011 at 1:48 pm
Ralph Nader Cheering the Tea Party?

Believe it.  In an op-ed for BusinessWeek, the scourge of concentrated wealth and power sees a lot to love in the new, Tea Party-infused legislators walking around Capitol Hill.  Specifically, Nader isolates five issues that could bring the movement’s limited government mantra into conflict with establishment Republicans.

(1)   Ron Paul’s fight to curb the power of the Federal Reserve

(2)   Heightened criticism for corporate welfare programs (e.g. everything from ethanol subsidies for biofuel to “green” initiatives designed to get federal tax dollars)

(3)   Trimming the military budget (Apparently, Defense Secretary Robert Gates already got the memo; sort of)

(4)   Renewal and expansion of the World Trade Organization, NAFTA, etc.

(5)   Whistleblower protection for bureaucrats and corporate workers

The limited government foundations of the Tea Party movement will make predicting voting outcomes this session iffier than when Republicans could be assumed to oppose any Democrat plan.  If necessary, we’ll see how many of the new Constitutionalists in Congress are ready to buck convention and vote their principles instead of their party.