Federal Farm Policy Is Corrupt Regardless of the Latest Uproar

James Bovard  – July 1, 2021 @ American Institute for Economic Research

Federal agricultural policy has been permeated by political racketeering since President Franklin Roosevelt appointed America’s first farm dictator in 1933. On Tuesday, the Washington Post revealed that Trump’s Secretary of Agriculture, Sonny Perdue, purchased a South Carolina grain plant from Archer-Daniels Midland (ADM) for a fire sale price shortly after it became clear that Trump would nominate him. 

ADM initially asked for $4 million for the plant but sold it to Perdue for $250,000 in December 2016. The deal was closed before Perdue was confirmed by the Senate. A few months after Perdue took office, his family trust sold the plant (along with other properties) for a hefty profit, the Post reported. Federal law did not require Perdue to reveal the transaction on his federal financial disclosure forms since it was completed prior to his confirmation. 

The Post noted, “Public officials are barred from accepting anything of value if the benefit is given ‘with intent to influence….’ The Perdue years were good ones for ADM, which hit many targets among the top issues listed on its lobbying forms.” ADM is one of the nation’s largest ethanol and biodiesel producers, and in September 2019 Trump added “hundreds of millions of gallons of ethanol to the U.S. gas supply.” In early 2020, “Perdue announced a $100 million subsidy of biofuels, including ethanol and biodiesel.”

Perdue was dealing with a multinational corporation whose ethics have never been confused with the Girl Scouts. ADM has long been one of the most prominent recipients of corporate welfare. The Post noted that it “has a history of manipulating markets. In the late ’90s, three ADM executives were convicted in a global price-fixing scheme and sentenced to prison terms. It was fined $100 million — the largest antitrust fine in U.S. history at the time.” 

“Ethics reform” is an eternal crusade in Washington, and almost every new presidential administration promises to fix the mess or – in Trump’s lingo – “drain the swamp.” It is unclear at this point whether Perdue violated any laws. Walter Shaub, the chief of the Office of Government Ethics in 2017, suggests that an FBI investigation of Perdue could be appropriate. Perdue did not respond to Post requests for comments, and ADM denies any wrongdoing.

Unfortunately, the media is ignoring the vastly greater corruption of federal ethanol policy. Ethanol is holy water for Iowa farmers who profit from the increased demand for corn. But ethanol epitomizes the political treachery that follows government interventions. 

A 1986 Agriculture Department study concluded that increased production of ethanol costs consumers and taxpayers roughly $4 for each $1 of extra farm income. The report stated: “Consumers would be much better off if they burned straight gasoline in their automobiles and paid a direct cash subsidy to farmers in the amount that net farm income would be increased by ethanol production.” But instead of a straight payoff to an interest group with huge clout in the Iowa presidential caucuses, politicians devised a convoluted Rube Goldberg regime that camouflages their windfalls for wealthy landowners. Presidents George W. Bush and Barack Obama were both champions of mandating more ethanol use. 

Ethanol has long been hyped as a linchpin of national energy independence. But it routinely requires more energy to produce — including tractor fuel, the cost of shipping grain, etc. — than it generates as a vehicle fuel. Besides, since ethanol contains only about two-thirds as much fuel energy as gasoline, it guarantees worse gas mileage — leading drivers to buy more gasoline. It can also damage auto engines. 

Biden’s Agriculture Secretary, former Iowa governor Tom Vilsack, is one of the biggest ethanol zealots in the nation. The Biden administration jumped on the bandwagon despite 40+ years’ evidence of its harm to the environment. The Clean Air Act of 1977 actually banned products such as ethanol. When the Clinton administration sought to mandate more ethanol in gasoline, a federal appeals court ruled in 1995 that “the sole purpose of the Reformulated Gasoline Program is to reduce air pollution…. EPA has even conceded that the use of it might possibly make air quality worse.” 

The Congressional Budget Office admitted in 1995, “Ethanol evaporates quickly, especially in hot weather, contributing to ozone pollution.” Stanford University’s Mark Jacobson estimated in 2007 that the use of “E85 (85% ethanol fuel, 15% gasoline) may increase ozone-related mortality, hospitalization, and asthma by about 9% in Los Angeles and 4% in the United States as a whole relative to 100% gasoline.” In 2018, when Trump sought to nullify a Clean Air Act provision for selling 15% ethanol in the summer, the Sierra Club denounced him for “once again ignoring Americans’ health and safety. Despite claims, corn ethanol is not a safe and environmentally-friendly fuel source — it is hugely detrimental to the environment and public health.”

Why all the largesse? As Forbes noted in 2016, “From the 2008 through 2014 election cycles, the [biofuels] industry showered federal lawmakers with $10.9 million in campaign contributions. Even that pales in comparison to the money they spent lobbying the federal government. From 2008 to 2014, the industry spent $188 million on an array of special interest perks.” According to a USDA-financed report from the Food Marketing Policy Center of the University of Connecticut, “For every dollar invested in contributions to political action committees, farm groups obtained on average approximately $2,132 in policy transfers.” (“Policy transfers” is a euphemism for subsidies.)

Unfortunately, the vast majority of farm policy corruption is legal – thanks to laws written by politicians. Buying votes is the only farm policy most members of Congress understand. When politicians and political appointees have free rein to set prices and rig markets, only a damn fool would not expect shady payoffs. Subsidized corporations favor politicians controlling the game, since they are confident they will control politicians. But no one has ever discovered how to make bureaucracies competent. As Texas Commissioner of Agriculture Jim Hightower quipped in the 1980s, “Federal agricultural bureaucrats couldn’t run a watermelon stand if we gave them the melons and had the Highway Patrol flag down their customers.” 

Since the 1930s, federal farm policy has been “socialism for one industry,” with endless interventions to profit the most politically connected groups of growers. Almost a century and a half ago, the Supreme Court clearly recognized the perfidy of such schemes: “To lay with one hand the power of the government on the property of the citizen and with the other to bestow it upon favored individuals to aid private enterprises and build up private fortunes is nonetheless a robbery because it is done under the forms of law and is called taxation.”

Lamentably, this ethical gold standard vanished from American public life long ago. Or maybe politicians simply “defined down” robbery? Regardless of the results of any investigations into the former Secretary of Agriculture, the only way to fix federal farm subsidies is to abolish them.

READ MORE

James Bovard

James Bovard is the author of ten books, including Public Policy Hooligan, Attention Deficit Democracy, The Bush Betrayal, and Lost Rights: The Destruction of American Liberty. He has written for the New York Times, Wall Street Journal, Playboy, Washington Post, New Republic, Reader’s Digest, and many other publications. He is a member of the USA Today Board of Contributors, a frequent contributor to The Hill, and a contributing editor for American Conservative

Get notified of new articles from James Bovard and AIER.

SUBSCRIBE

 

Time to Shut Down the Ethanol Racket

 August 21, 2020 by  Dan Mitchell @ International Liberty

When I wrote yesterday that Trump’s overall rating on economic policy was “bad,” a few people wrote to complain.

I did acknowledge in the column that it may be too soon to give the current president a grade, but it’s not looking good. He not only has a bad record on big issues such as spending and trade, but he also is prone to cronyist policies in other areas.

Such as goodies for the coal industry.
Such as goodies for the housing lobby.

And goodies for corn growers, which is the topic of today’s column.  But we’re not going to look at traditional agriculture subsidies (which are awful in their own right). Instead we’re going to focus on government handouts that bribe corn growers and others into turning crops into fuel.  This is a policy that’s bad for taxpayers, bad for consumers, bad for the environment, and probably bad for motherhood and apple pie.  The Competitive Enterprise Institute wrote last year about this boondoggle.

President Trump has again sought changes to the Renewable Fuel Standard (RFS)… The previous reform effort granted ethanol producers and corn growers their request to raise the amount of ethanol allowed year-round in gasoline from 10 to 15 percent (E-15)… But this did not create peace. Pro-RFS forces soon demanded both E-15 and fewer small refinery waivers. Now, the administration has announced that, while it will still grant small refinery exemptions, it will reallocate the waived amounts to non-exempt refineries and thus preserve the 15 billion gallon maximum set out in the law. It will also ease the labelling requirements for gas stations selling E-15. …Lost in the debate between the biofuels industry and the petroleum industry is what the RFS means for consumers. Gasoline prices are relatively low right now, but not because of the RFS. And we are always one bad corn crop away from an ethanol-induced price spike. …The proposed changes can only add to the upward pressure on pump prices.

The year before, the Independent Institute criticized Trump’s approach.

…instead of terminating the Renewable Fuel Standard (RFS) — which mandates a sharp increase in renewable fuel consumption by 2022 — the Trump administration has doubled-down on biofuels. President Trump has said that he supports ramping up ethanol production even further by allowing gasoline containing 15 percent ethanol to be sold year-round. Doing so would expand ethanol use and encourage the EPA to ratchet that percentage up in subsequent years. …a comprehensive meta-analysis in the American Journal of Agricultural Economics found the greenhouse gas benefits of ethanol to be almost zero. For other pollutants like nitrogen oxides (NOx) and ozone, ethanol actually is worse than gasoline. Because 40 percent of the nation’s corn crop is used in the production of biofuels, ethanol production also raises food costs. As a result, consumers pay higher prices for beef, milk, poultry and pork, among other items. …Because the RFS moved corn growing to areas that require more water, more fertilizer, and more acreage, prairies and other wild-lands are disappearing, soil is eroding, groundwater is being depleted, and ocean dead zones are expanding. …If ethanol truly were a good substitute for gasoline, no E10 or E15 mandate would be necessary.

Ironically, Trump’s misguided handouts aren’t necessarily buying him any friends.  As reported by Bloomberg, one of the big recipients says it may diversify away from ethanol unless subsidies are increased.

American ethanol makers have for years been reliant on a government policy that mandates biofuel use. But industry stalwart Green Plains Inc. wants to break away from that dependence… The Omaha, Nebraska-based company has lost faith that the ethanol industry will get the support it needs from parts of the Trump administration, said Chief Executive officer Todd Becker. …“We are going to spend half a billion dollars transforming this company to be not dependent on government policy,” Becker said in an interview. The EPA is “no friend of ethanol. They’ve done everything they can to destroy the market for us. They’ve done everything they can to destroy this industry.” …The U.S. ethanol industry was born out of government support. In the 1970s, President Jimmy Carter asked agribusiness leaders to make biofuels… The industry got another boost in 2007, when the Renewable Fuels Standard expanded the mandate to blend ethanol into gasoline.

This takes chutzpah. Ethanol arguably could be the most subsidized product in the United States, yet beneficiaries say they may exit the industry without ever-increasing handouts.  I’m not sure how to react to this supposed this supposed threat.  

• Should I say, “Here’s your hat, what’s your hurry”?
• Should I channel Clint Eastwood and say, “Go ahead, make my day”?
• Or should I simply say, “Don’t let the door hit you on the way out”?

The bottom line is that ethanol handout were bad policy when they were first created and they are bad policy today.  These handouts are misguided when Democrats are in charge, and they’re misguided when Republicans are in charge.  I’d like Trump to switch his position because of a newfound appreciation for free enterprise, but I’ll be happy if he shifts in the right direction simply because he doesn’t appreciate greedy complaints from the ethanol industry.

P.S. Trump isn’t the only Republican who is bad on this issue. Indeed, the GOPers who support free markets – such as Rand Paul and Ted Cruz – may be in the minority of the Party.

EPA finally admits ethanol mandate is causing environmental damage

By Thomas Lifson August 5, 2018

The federal requirement to blend ethanol into gasoline on the theory that it will reduce the hypothetical global warming that hasn’t appeared yet has been a joke from the start. By adding a huge amount of demand for corn, it did push up prices for that commodity, and made vast swaths of the rural Midwest prosperous, though it has injured poor Mexicans and others who depend on corn for a substantial portion of their nutrition and driven up the rice of feed used for animals, raising meat prices...............Read more

My Take - Another EPA/Environmentalist solution to another non-problem turns into a legitimate problem.  Once these things go into effect there seems to be no way of stopping them no matter what goes on in reality.  They mention the farmers in the Midwest and early primaries, but in the last election cycle the Midwest supported those presidential contestants who were opposed to this mandate. 

We need to understand this once and for all.  All.....and I mean all....alternative energy schemes are environmentally detrimental, expensive, incapable of supplying our energy needs and totally unnecessary.  All this clabber came into effect as a result of two verifiably false claims.   First, we were running out of fossil fuels and secondly those fuel sources were causing catastrophic global warming.

The ethanol gravy train rolls on

Opponents make compelling case but can’t derail or even slow this well-protected industry

Paul Driessen

Like most people I’ve spoken with, I have no innate, inflexible antipathy to ethanol in gasoline. What upsets me are the deceptive claims used to justify adding mostly corn-based ethanol to this indispensable fuel; the way seriously harmful unintended consequences are brushed aside; and the insidious crony corporatist system the ethanol program has spawned between producers and members of Congress.

What angers me are the legislative and regulatory mandates that force us to buy gasoline that is 10% ethanol – even though it gets lower mileage than 100% gasoline, brings none of the proclaimed benefits (environmental or otherwise), drives up food prices, and damages small engines. In fact, in most areas, it’s almost impossible to find E-zero gasoline, and that problem will get worse as mandates increase.

My past articles lambasting ethanol (here, here, here and here) addressed these issues, and said ethanol epitomizes federal programs that taxpayers and voters never seem able to terminate, no matter how wasteful or harmful they become. That’s primarily because its beneficiaries are well funded, motivated, politically connected and determined to keep their gravy train rolling down the tracks – while opponents and victims have far less funding, focus, motivation and ability to reach the decision-making powers.

Ethanol got started because of assertions that even now are still trotted out, despite having outlived their time in the real-world sun. First, we were told, ethanol would be a bulwark against oil imports from unfriendly nations, especially as the USA depleted its rapidly dwindling petroleum reserves. Of course, the fracking (horizontal drilling and hydraulic fracturing) revolution has given America and the world at least a century of new reserves, and the US now exports more oil and refined products than it imports.

Second, renewable fuels would help prevent dangerous manmade climate change. However, with the 2015-16 El Niño temperature spike now gone, average global temperatures are continuing the 20-year no-increase trend that completely contradicts alarmist predictions and models. Harvey was the first major hurricane in a record twelve years to make US landfall. And overall, the evidence-based scientific case for “dangerous manmade climate change” has become weaker with every passing year.

Moreover, the claim that ethanol and other biofuels don’t emit as much allegedly climate-impacting (but certainly plant-fertilizing) carbon dioxide as gasoline has also been put out to pasture. In reality, over their full life cycle (from planting and harvesting crops, to converting them to fuel, to transporting them by truck, to blending and burning them), biofuels emit at least as much CO2 as their petroleum counterparts.

Ironically, the state that grows the most corn and produces the most ethanol – the state whose Republican senators had a fit when EPA proposed to reduce its 2018 non-ethanol biodiesel requirement by a measly 315 million gallons, out of 19.3 billion gallons in total renewable fuels – buys less ethanol-laced gasoline than do average consumers in the rest of the USA. That state is Iowa.

In fact, Iowans bought more ethanol-free gasoline in 2016 than what EPA projects the entire United States will be able to buy in just a few more years, as the E10 mandates ratchet higher and higher.

And so this past week, after months of battles, debates and negotiations, President Trump hosted a White House meeting with legislators The purpose was to address and compromise on at least some of the thorny issues that had put Ted Cruz, Joni Ernst and other politicians at loggerheads, as they sought to reform some aspects of the Renewable Fuel Standards (RFS) system while protecting their constituents.

In an effort to expand the reform agenda, by making legislators and citizens better informed in advance of the meeting, 18 diverse organizations wrote a joint letter to EPA Administrator Scott Pruitt, underscoring why they believe broad and significant RFS reform is essential. Signatories included major national meat and poultry producers and processors, restaurants, marine manufacturers, small engine owners, consumer and taxpayer organizations, and conservation and environmental groups. They were especially worried about the prospect that the Congress and Administration might allow year-round sales of 15% (E15) ethanol blends in gasoline, but they raised other pressing concerns as well.

• As large shares of domestic corn and soy crops are now diverted from food use to fuel production, poultry, beef, pork and fish producers (and consumers) face volatile and increasing prices for animal feed.
• Ethanol wreaks havoc on the engines and fuel systems of boats, motorcycles and lawn equipment, as well as many automobiles, which are not capable or allowed to run on E15. Repair and replacement costs are a major issue for marine and small engine owners (as I personally discovered when I owned a boat).
• Consumers and taxpayers must pay increasing costs as biofuel mandates increase under the RFS.
• Millions of acres of native prairie and other ecosystems have been turned into large-scale agricultural developments, because the RFS encourages farmers to plow land, instead of preserving habitats. This endangers ecosystems and species, exacerbates agricultural run-off and degrades water quality.
• Biofuel demand promotes conversion of natural habitats to palm oil and other plantations overseas, as well as domestically. Their life-cycle carbon dioxide emissions rival or exceed those of oil and gas.
• Expanding markets for corn ethanol by increasing E15 sales ignores and exacerbates these problems – while benefiting a small subset of the US economy but negatively impacting far more sectors, including the general public and the industries and interests represented by signatories to the Pruitt letter.

Following the meeting, several signatories expanded on these concerns – and noted that the compromise did increase E15 sales, while reducing the RFS impact on small refineries that were being forced to buy paper biofuel certificates because they weren’t making enough gasoline to need mandated real biofuel. 

Requiring every American to buy ethanol gasoline “isn’t good enough” for biofuel companies anymore, the National Council of Chain Restaurants remarked. “Now they want a waiver from federal clean air laws so they can sell high blends of ethanol, which pollutes the air in warm weather months, year round.”

“Arbitrarily waiving the E15 [ozone emissions] restriction and permitting year-round E15 sales, without comprehensive reform of the RFS,” merely boosts ethanol sales and justifies future government-imposed increases to the ethanol mandate, the National Taxpayers Union noted. These “hidden taxes,” damage to small engines, and lower gas mileage are “a direct hit” on family budgets, especially for poor families.

The new year-round E15 policy will “cause serious chaos for recreational boaters,” the National Marine Manufacturers Association stated. Over 60% of consumers falsely assume any gasoline sold at retail gas stations must be safe for their equipment. It is essential that EPA launch “a public awareness campaign, improved labeling standards, and new safeguards at the pump that protect American consumers.”

“Granting a Clean Air Act waiver for the corn ethanol industry … would mean doubling down on a policy that has already been a disaster for the environment,” the National Wildlife Federation said. Congress needs to … reform the ethanol mandate before it does more damage.”

“US farmers are in a severe crisis and millions of people around the world are forced to go without food,” ActionAid USA pointed out. “We need policies that guarantee everyone enough food to eat, fair prices for farmers, and protect our environment. Biofuels don’t do that.” In fact, they make the situation far worse.

Unfortunately, a deal was struck. The noisiest and best-connected warring factions got what they wanted. These other pressing concerns were ignored, as the can once again got kicked down the road.

Refiners will now save hundreds of millions of dollars a year, by not having to buy ethanol that they don’t need to blend into the smaller quantities of gasoline they are refining. Corn farmers and ethanol producers will rake in hundreds of millions more a year. All that is good for those industries, their workers and investors, and the politicians who get their campaign contributions.

But what about the rest of America? The Congress, White House and EPA need to address our environmental and pocketbook concerns, too. When will the next negotiating session be held?

Paul Driessen is senior policy analyst for the Committee For A Constructive Tomorrow (www.CFACT.org) and author of books and articles on energy and environmental policy.

 

Pruitt Should Call for End to Ethanol Subsidies

Peter Ferrara, The Daily Caller

Scientific American reports roughly 40 percent of today's corn crop is used for ethanol made from corn, which is added to gasoline. That is more than the second largest use of corn "as feed for livestock" which consumes 36 percent of the annual corn crop. New EPA Chief Scott Pruitt and the rest of the Trump economic team need to recognize that the Renewable Fuel Standard and ethanol mandate represent a net loss to the economy, subtracting from growth. Abolishing the RFS and its tax would consequently amount to a pro-growth boost to the economy.......... Read More

Ethanol loses its few friends

Posted by Marita Noon @ OILPRO

Early in his campaign, now top-tier Republican presidential candidate, Ben Carson, supported ethanol—a position for which I called him out. It has long been thought, that to win in Iowa, a candidate must support ethanol.

However, in a major policy reversal, Carson told a national audience during the CNBC GOP debate that he no longer supports subsidies for any industry, including U.S. ethanol producers: “I have studied that issue in great detail and what I’ve concluded, the best policy is to get rid of all government subsidies and get the government out of our lives and let people rise and fall based on how good they are.”

Plainly irritated, the ethanol industry shot back immediately, saying it receives no government subsidies. But it neglected to mention a very important fact. Instead of subsidies, ethanol producers get something better: a mandate that orders refiners to blend ethanol into motor fuels which forces consumers to buy their product. A federally guaranteed market beats a subsidy every time.

The ethanol industry also benefits indirectly from agriculture programs that support farmers who grow corn for ethanol. And recently, the Obama Administration announced the U.S. Department of Agriculture is offering $100 million in grants to subsidize the installation of blender pumps at gas stations all over the country.

In attempt to push more ethanol into the motor fuel market, the Environmental Protection Agency (EPA) readily admits it plans to “drive growth in renewable fuels by providing appropriate incentives. (Italics added.)”

Carson, and a majority of Republicans and many Democrats, knows the ethanol mandate is a do-gooder program that has gone horribly wrong.  Enacted by a well-meaning Congress, in a different energy era, it is part of the Renewable Fuel Standard (RFS), which requires refiners to add biofuels to gasoline and diesel—ostensibly to reduce imports of foreign oil. This multi-headed hydra is siphoning money from consumers’ pockets.

The ethanol mandate has been blamed for rising food prices—particularly for beef and poultry—because it has increased the cost of animal feed. Ethanol-blended fuel provides fewer miles per gallon because ethanol contains only two-thirds as much energy as gasoline, forcing motorists to fill up more often.

The mandate puts at risk millions of vehicles owned and operated by private citizens and fleets. Ethanol is corrosive. In tests, it has been proven to eat engine components, including seals and gaskets, causing expensive repairs. The government does not reimburse motorists for their loss; rather it is allowing—in fact, encouraging—the sale of fuels containing more and more ethanol.

Most vehicles on the road today can withstand E10, a gasoline blend containing up to 10 percent ethanol, but the EPA has granted a “partial waiver” for the sale of 15 percent blends. AAA advises owners of non-flex-fuel vehicles to avoid E15, warning that manufacturers will void their warranties. Although the EPA maintains that 2001 model-year and newer vehicles can safely use E15, studies by the prestigious Coordinating Research Council found that E15 caused engine damage to some of the EPA-approved vehicles, leading to leaks and increased emissions.

Likewise, marine engine makers also caution boat owners to avoid E15. During winter storage, they suggest pouring a fuel stabilizer into built-in gas tanks to avoid problems. A survey of boat owners has shown ethanol-related repairs cost an average of about $1,000.

These days, ethanol has few friends. Opponents include such strange bedfellows as the petroleum, restaurant, livestock and auto industries—and environmental groups.

Despite government claims to the contrary, studies show ethanol also harms the environment. Earlier this year, the Environmental Working Group (EWG) discovered the EPA grossly understated the amount of carbon spewed into the air by the expansion of corn farming. This month, the EWG found the corn-ethanol mandate is discouraging advanced biofuels development, which could have environmental benefits.

These are just some of the problems. There’s also the EPA’s complicated Renewable Identification Number (RIN) trading scheme, which allows refiners to buy ethanol credits when not enough is available for purchase. This poorly managed program has allowed phony ethanol companies to sell fictitious credits and abscond with millions of dollars. And then there were the huge fines levied against oil companies for failing to add cellulosic ethanol to gasoline although the advanced fuel did not exist in commercial quantities—even according to the EPA’s own data.

All of these costs have an impact on consumers who buy fuel and for taxpayers who pay the salaries of the bureaucrats who administer the RFS program. Yet the RFS continues to stumble along because Congress has not mustered the will to repeal it.

By November 30, the administration must finalize the amount of biofuels that must be blended into motor fuels in the next couple of years. A pitched battle is developing on Capitol Hill. On one side are those who want an even larger market share for ethanol. On the other side are those who see the program for what it is—a massive payout to one allegedly “green” industry.

The latter group includes more than 180 Washington lawmakers, including Rep. Bill Flores (R-TX), who have sent a letter to the administration asking it to “limit the economic and consumer harm this program has already caused.” Rep. Peter Welch (D-VT.) was more direct. “We’ve got to just acknowledge that the corn-based mandate is a well-intended flop,” he said.

If their effort succeeds, it will not end ethanol production, as there is a free-market call for it. Energy Economist Tim Snyder, who was influential in developing many early ethanol plants, told me: “Regardless of the limits the EPA sets, or the fate of the RFS, we will continue to use ethanol as an additive to provide an adequate oxygenate for our fuel. Oxygenates are beneficial in reformulated fuels to reduce carbon monoxide and soot. Formerly we used lead. We replaced lead with methyl tertiary butyl ether (MTBE) then ethanol replaced MTBE. Ethanol was initially targeted as only a replacement for previous oxygenates, however, today with ethanol being 23 cents per gallon more expensive than NYMEX RBOB, the math doesn’t work and the need to increase blends of ethanol doesn’t meet the test of proper blending economics.”

Wisely, Ben Carson has figured out that government meddling in the marketplace is a bad idea. Contrary to conventional wisdom, his rejection of special treatment for ethanol is not hurting his campaign. Although the State of Iowa has made support for ethanol a litmus test for presidential candidates, polls conducted before and after the Oct. 28 debate, when he announced his revised view on ethanol, show Carson continues to rise in popularity nationally. Even the pro-ethanol lobby, using its semantic gymnastics, cannot dispute that fact.

Congress could learn from Carson’s positive poll numbers by once and for all ending the ethanol subsidies, er, mandates, without fearing political reprisal. Like Carson, doing so might even help Congress’ pitiful approval numbers.

The author of Energy Freedom, Marita Noon serves as the executive director for Energy Makes America Great Inc. and the companion educational organization, the Citizens’ Alliance for Responsible Energy (CARE). She hosts a weekly radio program: America’s Voice for Energy—which expands on the content of her weekly column. Follow her @EnergyRabbit.

Green Tech – the climate crisis syndicate

Manufactured climate crisis fears and renewable energy schemes create gold mine for the rich

Paul Driessen

Renewable Portfolio Standard advocates recently held their 2015 National Summit. The draft RPS agenda suggests it was quite an event – populated by bureaucrats, scientists and consultants who have jumped on the climate and “green energy” bandwagon, to follow the money.

Indeed, they are no longer content with 10% corn ethanol in gasoline, or some wind and solar power in the electricity mix. Now they want to convert the entire electrical grid from fossil-fuels to renewable sources and, if Catholic bishops get their way, totally eliminate hydrocarbons by 2050, despite the horrendous impacts that would have on workers, families and the world’s poorest people.

There’s certainly a lot of money to be made. The green revolution is estimated at $1.5 trillion per year, which means potentially huge profits for those with political connections. Many who are making big bets on green technologies are ultra-wealthy people who say they are protecting the planet, when they really seem to be “protecting their wealth for future generations” of family members and cronies.

One is Ward McNally, great-great-great grandson of the founder of Rand McNally maps. He and 11 other billionaire families created the Green Tech Syndicate in 2010. So far they have invested $1.4 billion in green schemes – for a greener environment, but mostly to put still more green in their bank accounts.

Wags might suggest that “syndicate” is a perfect name, as it recalls Capone, Cosa Nostra, yazukas and tongs. But what they are doing seems perfectly legal, if not always in the public interest. And the “climate crisis” foundation of this vast enterprise seems increasingly based on exaggerated, manipulated, even fabricated science, data, computer scenarios and official reports – and on silencing CAGW skeptics.

President Obama is the piper leading the nation and world to a green Shangri La. As he continues to impose policies that move the US economy away from fossil fuels and toward pseudo-alternatives, he is calling for public and private investments. The Clean Energy Investment Initiative, for example, seeks investors who will plow $2 billion into wind, solar and other infrastructure projects – all of them augmented with money from taxpayers and consumers who have no voice in the decisions.

There’s another problem: Fossil fuels remain more affordable than renewable energy, a better value for consumers and generally better for the environment. For green investors and the Administration, this means coal, oil and natural gas must be made more costly, so that renewables can compete. What to do?

As a 2014 Senate Environment and Public Works Committee staff investigation revealed, a cabal of billionaires, millionaires, foundations and “charitable” organizations are colluding to smear fossil fuels and scare Americans about fracking and climate change. They funnel millions of dollars into far-left environmentalist groups, which launch campaigns and create phony grassroots groups that hold protests and spread more anti-fossil fuel propaganda, to kill projects and jobs and reduce living standards.

Using an Amazon-sized river of cash, these 0.1 Percenters buy the services of the Natural Resources Defense Council, Sierra Club, American Lung Association and many similar groups, to stir up fear, loathing and opposition among the 99 Percenters. They want to make the electorate feel guilty about pseudo-problems: the plight of polar bears, rising asthma rates, and “environmental injustice” – the claim that minorities are disproportionately affected by fossil fuels and “dangerous manmade climate change.”

Their “charitable” contributions fund 350.org and its battles against fossil fuels. Founder Bill McKibben has called the organization “a scruffy little outfit” with “almost no money.” But between 2011 and 2014 it received multiple six-figure grants from outfits like the Park Foundation, Marisla Foundation, Tides Foundation, Climate Works Foundation, Rockefeller Brothers Foundation and Rockefeller Family Foundation – with much of the money passed through the Sustainable Markets Foundation.

The Senate report says such pass-throughs allow secretive donors to remain anonymous and get tax deductions for contributing to a supposed charity. Last year, 350.org spent more than $8.3 million on anti-fossil fuel activities around the globe.

But 350.org pales in comparison to the Energy Foundation (EF), the “quintessential example of a pass through.” The report says EF receives huge sums from the Sea Change Foundation, which gets money from Vlad Putin cronies and whose other “major donors are heavily invested in renewable technologies.”

Sadly, this is not the first time a greedy few have elevated their interests over the needs of working-class consumers. A prime example is the Renewable Fuel Standard (RFS). With its ethanol mandate, the RFS was pitched to the public as a way to wean America off foreign oil, which fracking does much better. But one of its primary goals was to “incentivize” the U.S. ethanol industry. It certainly did that.

Corn farmers and ethanol producers grew fat, while American families footed the bill. Forcing ethanol into motor fuels caused food prices to climb, vehicle engines to be damaged, and motorists to get fewer miles-per-gallon. Ohio motorists alone paid $440 million more in additional fuel costs during 2014.

Since the RFS was passed ten years ago, the clever racket that gives influential 0.1 Percenters sway over environmental and energy policy has become increasingly sophisticated and less transparent. The RFS was negotiated openly, but today’s policies appear to be generated by a group of insiders who put profits over honesty and fairness, and rabid environmentalism over the well-being of our nation and citizens.

Indeed, EPA justifies the ethanol mandate by claiming it reduces greenhouse gas emissions (GHGs). However, even the Environmental Working Group says ethanol puts more carbon dioxide into the air, not less. In October, the EPA Inspector General said it would investigate ethanol’s impact on GHGs. 

Unfortunately, most Americans do not comprehend the huge self-interest behind the green movement, nor its harmful effects and minimal benefits. EPA’s anti-coal Clean Power Plan, for example, will sharply hike electricity rates and lower household incomes by $2,000 a year – but reduce global temperatures by only 0.02 degrees C (0.03F) over the next 85 years, assuming CO2 actually drives climate change!

In reality, global temperatures haven’t warmed in 19 years, no category 3-5 hurricane has hit the United States in ten years, Antarctic sea ice is expanding, and seas are rising at just seven inches a century. But anyone who questions climate chaos mantras faces vilification, and worse. Famed French meteorologist Philippe Verdier was fired from his TV job after calling climate change hype a “global scandal.” A Paris journalist says Verdier was the victim of an “outrageous, unjust, ridiculous” climate “fatwa.”

But these critically important facts get short shrift in the radical world of climate cataclysm. They will certainly be ignored at the upcoming UN climate gabfest in Paris. Legions of bureaucrats and activists will gather there to plot global governance, energy restrictions and wealth redistribution – while crushing debate and free speech, to prevent the world from learning the truth about climate chaos deception.

Returning to the RPS conference, its agenda notes that Day Two was closed to the public and open only to selected federal and state officials. That’s because a major discussion topic was the scheduled reduction in federal solar tax credits, from 30% to 10% at the end of 2016. Green investors are up in arms, have launched a TV ad blitz, and wanted to lobby officials privately for expanded government largess.

Wake up, America. The ruling class and rich elites are picking your pockets. Don’t get snookered by the president’s claim that climate change is the biggest threat to future generations. Don’t blithely assume the government is working in your best interests. (That’ll be the day.) Don’t buy claims that the enemy is corporate greed. That ancient diversionary tactic is designed to make you look the other way, while the Green Cabal, Climate Crisis, Inc. and renewable opportunists enrich themselves at your expense.

Above all, pay attention to next year’s elections. Your own and your children’s futures are at stake.

Paul Driessen is senior policy analyst for the Committee For A Constructive Tomorrow (www.CFACT.org) and author of Eco-Imperialism: Green Power – Black Death.

Ethanol policy reform--the rare place where environmentalists and energy advocates agree

By Marita Noon

We all expect to pay a price for missing deadlines—fail to pay a parking ticket on time, and you may find a warrant out for your arrest. People have lost their jobs when they can’t get the work done on schedule. Students, who turn in papers late, get lower grades—maybe even fail the class.

But the Environmental Protection Agency (EPA) can apparently miss deadlines (many) with impunity. For the past two years, the EPA has failed to meet the statutory deadline under the Renewable Fuel Standard (RFS), requiring the agency to tell refiners how much ethanol to blend into the nation’s motor fuels.

In November 2013, the EPA did make an attempt to announce the proposed 2014 blend levels—which by then were already months past the legally mandated deadline. The EPA surprised and pleased the RFS opponents when it utilized its authority to adjust the mandate and took market conditions into consideration. The EPA set the proposed 2014 standard to a level lower than 2013’s, even though the law requires increasing amounts. Ethanol producers, who were expecting the usual uptick, loudly opposed the reduction. They made so much noise, the EPA agreed to reconsider. To date, the 2014 standards have not yet been announced.

Then, on November 21, 2014, the EPA announced it would make a decision next year (2015) on how much ethanol refiners had to add to gasoline this year (2014)—yet, if refiners don’t meet the unknown requirement, they get fined. That’s akin to handing out the class syllabus after the students have failed the final exam.

With the goal of a reduction in foreign oil imports, Congress enacted the RFS in 2005 and revised it in 2007—which also provided incentives to America’s fledgling ethanol industry. At the time, gasoline demand was rising to an all-time high and oil imports comprised more than 58 percent of U.S. oil consumption. No doubt Congress believed it was saving American consumers from their addiction to oil.

Then the world changed. The U.S. economy plunged into its worst recession ever, unemployment soared, and gasoline demand fell sharply. Meanwhile, advanced drilling technologies, including the long-used hydraulic fracturing and newer horizontal drilling, began producing oil and natural gas from U.S. shale formations—which were previously uneconomic to develop—leading to America’s 21^st Century energy boom.

Today the U.S. is the world’s largest natural-gas producer and is projected to pass Saudi Arabia as the number one oil producer. With crude oil supplies flooding the market, prices have been cut in half. Although fears over foreign-oil dependence have abated, the U.S. remains stuck with an ethanol mandate that is outdated, unworkable, and even harmful to vehicles, engines, and the environment.

Consider just some of the RFS’s flaws.

The law requires refiners to cap their blending of corn ethanol and use more cellulosic biofuels. Never mind that very little cellulosic biofuel has ever been produced—even according to EPA’s own data. But that fact hasn’t prevented the EPA from levying millions of dollars in fines against refiners for failing to use the phantom fuel, without any assurance that enough cellulosic biofuel will ever be available. It’s kind of like receiving a bill for something you cannot buy because it doesn't exist, but you’re being charged anyway.

The nonpartisan Congressional Budget Office reports cellulosic biofuels are: “complex, capital-intensive, and costly.” Given the difficulty of producing them, capacity will “fall far short of what would be necessary to achieve the very rapid growth in the use of cellulosic biofuels required” under the RFS.

Then there is the “blend wall” problem. With less gasoline being sold than Congress anticipated, refiners cannot add ever-rising amounts of ethanol to gasoline without exceeding E10—the fuel consisting of 10 percent ethanol and 90 percent gasoline sold virtually everywhere in the country today. To get around the blend wall issue, the EPA granted a “partial waiver” allowing the sale of E15, a fuel blend containing up to 15 percent ethanol for model-year 2001 and newer vehicles.

The EPA’s quick fix made a bad situation much worse, and all at the taxpayers’ and consumers’ expense. Ethanol levels higher than 10 percent can damage or destroy vehicle engines, according to a study conducted by the well-respected Coordinating Research Council. Automakers are voiding warranties and refusing to be held responsible for mechanical problems caused by fuels containing more than 10 percent ethanol. And the marine industry warns of potential engine failures on various types of watercraft powered by the industry’s most common engines.

The Outdoor Power Equipment Institute (OPEI) is so concerned about safety hazards that it has launched a campaign telling consumers to “Look Before You Pump.” OPEI says equipment ranging from lawn mowers to “jaws of life” devices could be damaged by ethanol’s corrosive properties if used in concentrations above 10 percent. Do want your expensive new lawn mower to quit the third time you use it? You certainly want life-saving devices to work on demand.

And that’s not all. Ethanol contains less energy than gasoline, forcing motorists to fill up more often, thereby causing more consumer expenditures. Ethanol production has driven up food prices here and abroad. Additionally, some studies indicate ethanol usage increases greenhouse gas emissions. Politico reports: “Some green groups have vocally abandoned their support for corn ethanol, blaming the crop for polluting water supplies, wiping out conservation land and even increasing carbon emissions.” According to Craig Cox, director of the Ames, Iowa, office of the Environmental Working Group, an environmental group that opposes the mandate as it is now structured: “Corn ethanol’s brand has been seriously dented in the last 18 months. …it certainly doesn’t occupy the same pedestal that it occupied two years ago.”

But then, despite the fact that the EPA says decisions are made on merits, politics entered the scene. Rumors flew that the announcement of the 2014 blend levels was delayed to help Rep. Bruce Braley (IA-D) in his Senate bid. Braley was pushing for an increase in the proposed levels and was hoping that he would be able to influence the White House to raise the targets. Additionally, a Republican-controlled Senate would be more likely to pass legislation to reform or repeal the RFS. Braley was quoted in Politico saying: “Voters in Iowa look at where I stand on this issue and where my opponent stands, who’s supporting me in this campaign and who’s supporting [Ernst].” The Politico story states: “Iowans say wavering on corn ethanol once would have been certain political suicide in a state where 90 percent of the land is farm acreage. So Braley sought to capitalize on Ernst’s expressed qualms about big government, portraying her as someone Iowans can’t trust to fight for them.” Yet, Ernst, a Republican, won the Senate seat formerly held by Democrat Tom Harkin by 8.5 percentage points.

The EPA’s unwillingness to do its job by setting ethanol volumes—along with ethanol’s loss of “political heft”— should provide the impetus for ending the complex and wasteful RFS program. Ethanol is a rare topic where environmentalists and energy advocates agree. Now is the time to get our elected officials all on board. As soon as the new Congress convenes in January, it should give the RFS an “F” and reform, revise, or even repeal it.

(A version of this content was originally published on Breitbart.com)

The author of Energy Freedom, Marita Noon serves as the executive director for Energy Makes America Great Inc. and the companion educational organization, the Citizens' Alliance for Responsible Energy (CARE). Together they work to educate the public and influence policy makers regarding energy, its role in freedom, and the American way of life. Combining energy, news, politics, and, the environment through public events, speaking engagements, and media, the organizations' combined efforts serve as America's voice for energy.=