Big Ethanol’s response to EPA’s possible RFS-rollback: Panic.

posted at 3:31 pm on October 13, 2013 by Erika Johnsen

In what would be a pretty historical retreat, leaked draft documents last week revealed that the Environmental Protection Agency might actually considering reducing their ethanol-blending requirements for the country’s refiners through the Renewable Fuel Standard as the industry has grown increasingly vocal about the inherent problems of hitting the “blend wall.” The news spread like wildfire through markets and the concerned industries/lobbies, and the EPA was careful on Friday to assure everyone that they have yet to come to a final decision on the matter, via Reuters:

The Environmental Protection Agency on Friday sought to calm a furor over its apparent proposal to reduce ethanol use in gasoline next year, saying that no final decisions had been made about the contentious mandate.

On Thursday, Reuters and other news outlets reported on EPA documents that showed the agency proposing an unexpected drop in the amount of corn-based ethanol that would be required for blending next year, a historic retreat from the 2007 biofuel law and a major victory for the oil industry.

“At this point, EPA is only developing a draft proposal,” EPA Administrator Gina McCarthy said in a statement in the agency’s first public response to the reports.

She said the Obama administration remained “firmly committed” to developing biofuels as a part of the plan to reduce U.S. dependence on imported oil.

I seriously doubt that the call for everyone to calm the heck down, however, will do any good. As I said, the afflicted lobbies and companies went berserk when the news dropped, and Big Ethanol is already readying their defenses to fight for what they are very well aware is their government-sponsored market share.

“Because of the dramatic economic impact on commodity markets there should be an immediate investigation by the Justice Department, and the Commodity Futures Trading Commission to determine if this was an attempt to manipulate markets such as corn futures, ethanol futures and/or RINS markets,” Tom Buis, CEO of Growth Energy, said in a release. …

The ethanol group’s strong response illustrates the highly charged nature of the debate between two industries fighting over the future of the U.S. fuel supply. …

“I believe we are competing head-to-head with Big Oil,” Todd Becker, chief executive officer of No. 4 U.S. ethanol company Green Plains Renewable Energy Inc, told Reuters.

Oh, you are most definitely competing head-to-head with Big Oil — but the difference is, consumers voluntarily want to buy and use their product while Big Ethanol’s only competitive advantage comes from a top-down federal mandate.

The alarm bells have already started ringing all across corn country:

Ethanol advocates want to solve the problem by placing greater emphasis on the 85 percent ethanol products used by flex-fuel vehicles and on the 15 percent ethanol blends approved by the EPA last year for vehicles no older than the 2001 model year.

Todd Sneller of the Nebraska Ethanol Board said the circumstances behind EPA deliberations were no surprise.

“When the law was passed, it was clear that we would have to go beyond 10 percent (blends),” Sneller said Friday.

He and others in ethanol ranks see a potential mandate rollback from 13.8 billion gallons to 13 billion gallons of corn-based product as the wrong response for several reasons.

Among the negative effects on the ethanol industry and the agricultural economy would be “backing off a federal law that provides clear and consistent signals to investors and farmers.”

Yes, I have no doubt that farmers would prefer “clear and consistent” economic signals — which is precisely why scrapping this particularly insidious piece of politically-subjected central planning, and instead allowing the agribusiness industry to operate based on unmanipulated free-market signals like the everyone else, is such a splendid idea.


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Can you blame them? They made business decisions based on government assurances and spent likely billions of dollars to ramp up for the production.
On the other hand, it is welfare and should not exist. But arguing that they should not be upset and panicked about it seems rather stupid. Of course they are going to be upset, panicked and looking for a way to save their business. DUH!
End the corporate and individual welfare. EVERYTHING.

By the way, if you argue that you are OWED social Security and or Medicare because you have planned for it and paid into the system. These guys are OWED subsidies because they accepted the government assurances that they could plan and build huge refineries. SHUT THE F^CK UP if you are someone who is OWED money from my daughter who is over a decade away from her first vote. You have no credibility on this subject.

astonerii on October 13, 2013 at 3:39 PM

NO dont save it.

Cut this CRAP out. More Damn interference from the feds being REMOVED will be a godsend.

TX-96 on October 13, 2013 at 3:42 PM

Titty babies always cry. Decisions made stupidly with my money (not astonerii’s daughter. Not yet) against me. EPA is an anti American agency. Big Ethanol made a deal with the devil. Let her cry.

onomo on October 13, 2013 at 3:50 PM

Save END the subsidies, at all costs!

Resist We Much on October 13, 2013 at 3:54 PM

astonerii on October 13, 2013 at 3:39 PM

You bring to my mind Scrooge’s thought “Are there no prisons? Are there no workhouses?” The weepiest bleeding hearts think they care so much; they care about everything so much more than us evil conservatives. And there solution is to make somebody else pay for it and deal with it. Except leftists are worse than pre-reformed Scrooge because at least Scrooge was productive and didn’t pretend to care.

Fenris on October 13, 2013 at 3:55 PM

By the way, if you argue that you are OWED social Security and or Medicare because you have planned for it and paid into the system. These guys are OWED subsidies because they accepted the government assurances that they could plan and build huge refineries. SHUT THE F^CK UP if you are someone who is OWED money from my daughter who is over a decade away from her first vote. You have no credibility on this subject.

astonerii on October 13, 2013 at 3:39 PM

I am not sure where this came from; however, since the government has been taking money out of my paychecks for 35 years for the expressed purpose of Social Security, they do owe me. Not from your daughter, but from me. The government can repay me every cent, with interest, and I will call it even.

DAT60A3 on October 13, 2013 at 3:57 PM

?..The government can repay me every cent, with interest, and I will call it even.

DAT60A3 on October 13, 2013 at 3:57 PM

Good luck with that.

Fenris on October 13, 2013 at 4:00 PM

Good luck with that.

Fenris on October 13, 2013 at 4:00 PM

I know that! I am just responding to somebody saying that the government doesn’t owe me for what I have paid into.

DAT60A3 on October 13, 2013 at 4:02 PM

De-funding Big Ethanol is a complete no-brainer.

That’s why the government won’t do it.

MidniteRambler on October 13, 2013 at 4:06 PM

Astonterii on October 13, 2013 at 3:39pm.

Why don’t you shut up you idiot. I paid into social security for 60 years,involuntary like. They took my money and if I didn’t pay they would put me in jail. I paid over $500,000 present value. At a minimal interest rate I should be getting at least $3k/mo and still have my $500k to go to my children. Why don’t you liberal schlock give your half million to a bunch of politicians and bureaucrats. I am so tired of hearing from people like you, I can barely keep from going out and beating the sh-t out of someone.

Now lets talk about medicare. I also donated to medicare for years. Now that I am no longer having to give to social security, I still have to give to medicare and supplemental to the tune of about $250/mo, sans Rx. That is another $105. I can not refuse medicare because the bureaucrats know that medicare is a bad deal and they won’t let anyone opt out. If you do opt ou, you lose all the money you have put into social security and it’s benefits. That is NOT the law, but that is how the SOB bureaucrats interpret it. I gurantee you I could buy private insurance cheaper and better, but not those companies are running scared of our triumvirate of dictators in obamareidpelosi.

Now astonerii, YOU just STFU! What’s that obamacare telephone number?

Old Country Boy on October 13, 2013 at 4:09 PM

http://www.wattsupwiththat.com/

APACHEWHOKNOWS on October 13, 2013 at 4:09 PM

Rather than argue with Astonerii, I say let’s congratulate the EPA and and folks for seeing the pointlessness of this subsidy and PRAY and advocate for its repeal…

Here’s SOME savings, and it doesn’t even require an entitlement reform.

JFKY on October 13, 2013 at 4:14 PM

Old Country Boy on October 13, 2013 at 4:09 PM

Well said!

DAT60A3 on October 13, 2013 at 4:15 PM

a historic retreat from the 2007 biofuel law and a major victory for the oil industry.American economy

FTFY

DarthBrooks on October 13, 2013 at 4:21 PM

Love the defunding of ethanol. That would actually result in more food for humans – insane when central planners try anything. Just nuts. OK, some things they can do well but right now, I can’t think of one.

Stop ethanol subsidies. (and I come from an ag state).

MN J on October 13, 2013 at 4:22 PM

SHUT THE F^CK UP if you are someone who is OWED money from my daughter who is over a decade away from her first vote. You have no credibility on this subject.

astonerii on October 13, 2013 at 3:39 PM

So your cool with the Government taking 13% out of each and every paycheck the wife and I earned for the last 43 years and saying screw you too bad you are not owed anything? If so I have a big steaming mug of STFU sitting right here for you.

Johnnyreb on October 13, 2013 at 4:24 PM

astonerii on October 13, 2013 at 3:39 PM

I just want my money back paid into it. Other than that… yes I am owed the money.

watertown on October 13, 2013 at 4:25 PM

The FACT is that ethanol blending costs billions of unseen dollars every year in increased wear and tear on engines. It shortens the life of every vehicle that uses it, and the ONLY “benefit” is making the corn farming industry rich while oppressing the world’s poor who eat corn products and the middle class which eats corn-fed protein.

It was always a total scam. Ethanol is not even a break-even deal for the environment when all the factors are figured in.

Adjoran on October 13, 2013 at 4:35 PM

The Environmental Protection Agency on Friday sought to calm a furor over its apparent proposal to reduce ethanol use in gasoline next year, saying that no final decisions had been made about the contentious mandate.

Translation: Can you say “Trial Balloon” boys and girls? King Barry wants to see which way the wind is blowing.

Nothing better than “leadership” via wind direction.

GarandFan on October 13, 2013 at 4:35 PM

astonerii on October 13, 2013 at 3:39 PM

And just how much have the citizens subsidized those refineries- estimated to be $45 BILLION from 1980 through 2011, plus all we have been overcharged at the pump. Just say NO to ethanol.

tim c on October 13, 2013 at 4:35 PM

Ha! “Competing head to head with big oil”?!!! Don’t make me laugh. If it wasn’t for government intervention and manipulation of the markets you would have been out of everybody’s cars a long time ago.

Ethanol is crony capitalism at its worst.

ptcamn on October 13, 2013 at 4:36 PM

…give me corn liquor!

KOOLAID2 on October 13, 2013 at 4:37 PM

astonterii — Yes STFU. I bet you trained your 11 year old daughter to expect a government handout every day of her life, poor thing. By the way, that $500k paid in does not include that of the Old Country Girl. And I might add that no time did I take anything from the government, except my $222.30/month I was paid to defend this country and to take the abuse of the Astonteriis of this country.

Old Country Boy on October 13, 2013 at 4:37 PM

Easiest way to get rid of the mandates is to never increase anything. Eventually they will become so microscopic they will disappear into the backgroud. However, I do not believe that will ever happen. Remember the 1 cent per phone call tax put in place in 1898 to fund the Spanish American War? It lasted in fits and starts for over 100 years before it was finally repealed.

Johnnyreb on October 13, 2013 at 4:51 PM

astonerii on October 13, 2013 at 3:39 PM

the problem is that sophists like this actually think they are making valid points…and with the stupid part of the voting public can in fact make an impact (just like barry)

there are many differences between the two examples. State-run capitalism or corporatism is a sure way to destroy the future of a county. (and in this particular case, raises corn prices throughout the world, making poor people poorer).

obama.bots and assorted vapid leftists don’t think beyond slogan…and they are perfectly happy with that. Rs need to take these morons head one…but of course they themselves are corporatists

oh, well

r keller on October 13, 2013 at 5:04 PM

I wanna see more of those Mr. Slick and Dummy ads. The threat of taking away their sponsor’s means of support ought to do the trick.

MJBrutus on October 13, 2013 at 5:04 PM

Idea: Why don’t they use the corn that was intended for my gas tank for food?

Call me crazy…

turfmann on October 13, 2013 at 5:10 PM

I just want my money back paid into it. Other than that… yes I am owed the money.

watertown on October 13, 2013 at 4:25 PM

Agree.

The government can just write me a check for all the money I paid into the system. They can keep the interest, they’ve already squandered it anyway.

Then I won’t expect pre-teen girls to fund my retirement. Seems fair.

Of course, part of the first paycheck I earned when I was 16 years old went towards paying someone else’s retirement.

MichaelGabriel on October 13, 2013 at 5:25 PM

asteronii sure kicked a hornet’s nest there.

To everyone saying “I paid my money in, I just want it out!” Well, since the 60′s you’ve know that you don’t actually have an account with your money sitting in it. It is all money controlled by the federal government and you don’t have claim to it.

If you heard a story about someone who paid income taxes for 20 years and then decided he didn’t want to work anymore and got on welfare/food stamps/etc, we would call that person a deadbeat. His response could be “I paid income taxes for 20 years with no recourse, and so that is my money.” And we would laugh at him and berate him.

How is the flat tax called Social Security/FICA taxes different than income taxes?

cptacek on October 13, 2013 at 5:41 PM

Just a few facts concerning ethanol:
1. There has been no shortage of corn because of ethanol. Even with last year’s drought, there were still millions of bushels carried over.
2. The corn in a can is sweet corn, not field corn which is edible only if ground or liquified.
3. A bushel of corn weighs 56 lbs. If you ignored additives and water, it can produce 56 16oz boxes of cereal. At $8.40 per bushel, the value of corn per box is $.15.
4. The price of corn has collapsed. It is only a little over $4.00 per bushel even though the input costs were at the higher value. Many corn farmers will be be needing the predicted high yields to break even.
If you think farming is so profitable, stop blogging and become one. It will only require two or three million dollars of investment.

FirelandsO3 on October 13, 2013 at 5:50 PM

Oh, you are most definitely competing head-to-head with Big Oil —

no, there is no competition because consumers have no choice in whether they can buy gas with or without ethanol. big oil doesn’t care so much, they will blend what the govt requires and charge what they need to charge to make money. this is all on the ethanol lobby, who is trying to demonize an easy target

chasdal on October 13, 2013 at 5:51 PM

astonerii on October 13, 2013 at 3:39 PM

not so down on gov’t interference when it’s your ox being gored huh?

chasdal on October 13, 2013 at 5:53 PM

I disagree.

Big Ethanol is not competing with Big Oil, because Big Government requires, with its threat of force, Big Oil to buy from Big Ethanol what the EPA says this week.

Big Ethanol is competing with the American Consumers, residential and commercial, for Big Government protection re: the laws of economics.

jhnone on October 13, 2013 at 5:55 PM

So your cool with the Government taking 13% out of each and every paycheck the wife and I earned for the last 43 years and saying screw you too bad you are not owed anything? If so I have a big steaming mug of STFU sitting right here for you.

Johnnyreb on October 13, 2013 at 4:24 PM

Where does the money come from that they would pay you back with?

SLAVE MASTER!

astonerii on October 13, 2013 at 6:08 PM

So your cool with the Government taking 13% out of each and every paycheck the wife and I earned for the last 43 years and saying screw you too bad you are not owed anything? If so I have a big steaming mug of STFU sitting right here for you.

Johnnyreb on October 13, 2013 at 4:24 PM

By the way reject, the corporations have the exact same argument you have, which is why I made it about you.
We spent money already at the behest of the government, SO NOW WE ARE OWED.
The government does not OWN that money. It comes from other people’s work and is CONFISCATED to pay them off, YOU OFF. CONFISCATED like so much work by so many slaves for so many decades after the founding of this nation.

astonerii on October 13, 2013 at 6:12 PM

cptacek on October 13, 2013 at 5:41 PM

Actually, the Feds altered Social Security to become a “pay as you go” system back around 1940. While it may have been initially sold as a type of personal retirement account system, the law was changed to transform it into a Ponzi scheme so that FDR and his cronies could brag about all the people receiving many multiples of benefits vs their individual contributions.

I’ve dealt with the “I’ve paid in mine, now Big Govt *owes* me” mindset for Social Security for a long time. In my experience, most people still – even now, over 70 years after the law was changed – hold steadfast to the belief (almost a religious conviction, actually) that the money they “contributed” to Social Security (ditto for Medicare) is somehow “their money”.

Hate to tell those who espouse this belief, but if you chose to believe it because a politician said it, you’ve been fooled. Read the fine print of the law to understand that your so-called “contributions” are nothing more than taxes, levies, fees, or whatever you wish to call them. The funds are no more “yours” than your annual “contributions” to the Internal Revenue Service.

So your cool with the Government taking 13% out of each and every paycheck the wife and I earned for the last 43 years and saying screw you too bad you are not owed anything? If so I have a big steaming mug of STFU sitting right here for you.

Johnnyreb on October 13, 2013 at 4:24 PM

He didn’t say he was cool with anything, read what he said. And while you’re at it, read the law: the Government “owes” you nothing, not one single cent, for that 13%. What benefits you are paid based on whatever criteria you meet at whatever age or medical condition are entirely separate from the amounts you were taxed in previous years. Indeed, as you will discover, the current move to limit payouts to the “wealthy” are nothing more than schemes to reduce any benefits liability on the back end.

The funny thing about tax laws is, you generally have to abide by them whether you like them or not – unless, of course, you are a politician.

astonerii’s point was that anyone who accepts a politician’s assurances about anything is in for a hard lesson sooner or later.

/thus endeth the lesson

Wanderlust on October 13, 2013 at 6:21 PM

Where does the money come from that they would pay you back with?

SLAVE MASTER!

We paid for other peoples retirements and health care with the expectation that others would do the same for us.

Now you claim that isn’t fair?

Fine. End the system, give us our money back and we’ll call it a square deal.

End SNAP, end welfare, end Section 8 housing, etc. etc. etc….

Those are all programs we pay for and get nothing in return, except disrespect and a kick in the teeth.

And you call us slave masters….

MichaelGabriel on October 13, 2013 at 6:23 PM

Wanderlust on October 13, 2013 at 6:21 PM

I was alluding to the SC decision in the 60′s.

cptacek on October 13, 2013 at 6:29 PM

Just a few facts concerning ethanol:

FirelandsO3 on October 13, 2013 at 5:50 PM

To your points here:

1. “There has been no shortage of corn because of ethanol. Even with last year’s drought, there were still millions of bushels carried over.”

This point doesn’t address that subsidies for non-food crops bring marginal land into production and that while there are “millions of bushels carried over”, food crop surpluses have dropped significantly over the past decade due to market interventions by governments in regards to renewable fuels and climate change regulations. The price of food has shot up significantly over this timeframe.

2. “The corn in a can is sweet corn, not field corn which is edible only if ground or liquified.”

See my point above. If a farmer receives a subsidy to plant non-food crops (corn, rapeseed, sawgrass, or whatever the flavour of the renewables of the month may be), he will choose to plant non-food crops rather than either plant food crops or allow the land to remain fallow. The subsidies distort market signals regarding food production.

3. “A bushel of corn weighs 56 lbs. If you ignored additives and water, it can produce 56 16oz boxes of cereal. At $8.40 per bushel, the value of corn per box is $.15.”

All this tells me is that cereal, like most other manufactured goods, has quite a few value adding costs between its raw materials and the final product that are costed into the retail price.

4. “The price of corn has collapsed. It is only a little over $4.00 per bushel even though the input costs were at the higher value. Many corn farmers will be be needing the predicted high yields to break even.”

As I mentioned before, markets in farming (and dairying) are significantly distorted by government interventions, and have been this way since the Depression. There are a massive number of government rent-seekers in the farming industry, and regulation has driven small farmers out of the market in favour of the largest two rent-seekers, ADM and ConAgra. Add Monsanto into this mix for a most unholy trinity.

“If you think farming is so profitable, stop blogging and become one. It will only require two or three million dollars of investment.”

The fact that modern farming requires such a large investment comes from all the regulations imposed on the farming industry by Government. As has been written on this blog many times, regulation by design favours the largest participants by shielding them from threat of competition, because regulation drives up costs to market entry.

I remember how back in the late 1980′s the cause du jour was the collapse of small farms due to the cost of equipment acquisition, how people complained that combines and related equipment had become so expensive that they could not afford to keep their farms. Despite all the uproar, people figured out how to share or rent equipment rather than own it, and life went on.

Please understand that I have all the respect in the world for people who choose to operate farms, I realise it’s a job that runs 24/7. At the same time, I would invite those who complain about farming operating costs to appeal to their congressmen to push back on *all* the manifold market interventions that have twisted modern farming into the regulatory nightmare it has become these days. The initial result will be a shock to the market (see economist Milton Friedman’s “shock therapy” on this point), but things will come right.

(Oh, who am I kidding lol, there are votes to buy in farming states…)

Wanderlust on October 13, 2013 at 6:46 PM

I was alluding to the SC decision in the 60′s.

cptacek on October 13, 2013 at 6:29 PM

I’m not familiar with the case, but I would assume it was brought by someone complaining that social security funds paid in was “theirs”, despite the change in law around 1940.

Wanderlust on October 13, 2013 at 6:48 PM

/thus endeth the lesson

Wanderlust on October 13, 2013 at 6:21 PM

Lesson #2. Try and take that money away from everyone over 50 and see what happens at the ballot box.

Lesson ended.

Johnnyreb on October 13, 2013 at 6:50 PM

We paid for other peoples retirements and health care with the expectation that others would do the same for us.

Now you claim that isn’t fair?

Fine. End the system, give us our money back and we’ll call it a square deal.

End SNAP, end welfare, end Section 8 housing, etc. etc. etc….

Those are all programs we pay for and get nothing in return, except disrespect and a kick in the teeth.

And you call us slave masters….

MichaelGabriel on October 13, 2013 at 6:23 PM

If you paid in because you believed a politician without bothering to read the actual law, well…

…oops!

Wanderlust on October 13, 2013 at 6:52 PM

Lesson #2. Try and take that money away from everyone over 50 and see what happens at the ballot box.

Lesson ended.

Johnnyreb on October 13, 2013 at 6:50 PM

LOL! They’ve been “taking that money away” since “everyone over 50″
first began paying FICA taxes.

But to your point, PPACA was written with your political reality in mind: young voters don’t pay attention to the effects of fiscal legislation, but older voters (I am 48 btw) do so with a vengeance. Thus, we get the massive transfer of wealth from young to old that is Obamacare.

And as the Boomers retire, it will only get worse.

Thanks to socialist wealth transference and income tax opt out policies across so many mindsets, the bung fight of one group taking “what’s mine” from another, instead of everyone just being held responsible for their own choices, will only get worse as time goes on.

Coming up next: younger people who don’t pay taxes going against the decreasing cohort of Boomers who did…

Wanderlust on October 13, 2013 at 6:56 PM

If you paid in because you believed a politician without bothering to read the actual law, well…

…oops!

Wanderlust on October 13, 2013 at 6:52 PM

Paying in is not optional. The Federal government forces you to pay in under threat of imprisonment. Your childish argument about not paying in is getting tired.

Johnnyreb on October 13, 2013 at 6:57 PM

Paying in is not optional. The Federal government forces you to pay in under threat of imprisonment. Your childish argument about not paying in is getting tired.

Johnnyreb on October 13, 2013 at 6:57 PM

Dude, chill: I’ve been making that exact point all along – it’s not a “contribution” if the fact is that you get fined or imprisoned if you choose to not “contribute”. I worded that particular comment poorly.

Let me rephrase.

If you believed a politician who said that you were paying in and that politician suggested you should have the expectation of receiving something in return, well…oops.

Better?

Wanderlust on October 13, 2013 at 7:03 PM

If you believed a politician who said that you were paying in and that politician suggested you should have the expectation of receiving something in return, well…oops.

Better?

Wanderlust on October 13, 2013 at 7:03 PM

Yea, that’s better.

I never trusted politicians and I never believed they would deliver what they promised. I don’t believe they will ever be capable of fixing this mess either.

MichaelGabriel on October 13, 2013 at 7:11 PM

Better?

Wanderlust on October 13, 2013 at 7:03 PM

no, not really. I doubt there is anyone on this board who was alive much less voting age when ssi was approved. we have all been under the thumb of this program our whole lives w/ absolutely no say because no politician will touch it. to make it seem like our fault when its due to pressure from each generation of seniors is a defective argument.

chasdal on October 13, 2013 at 7:28 PM

By the way, if you argue that you are OWED social Security and or Medicare because you have planned for it and paid into the system. These guys are OWED subsidies because they accepted the government assurances that they could plan and build huge refineries. SHUT THE F^CK UP if you are someone who is OWED money from my daughter who is over a decade away from her first vote. You have no credibility on this subject.

astonerii on October 13, 2013 at 3:39 PM

but ss/mc taken by force from us while these subsidy takers voluntarily partook of the system(s).
big difference really.

dmacleo on October 13, 2013 at 7:45 PM

There’s no bigger nor more expensive version of Rent Seeking going today. I’m hard pressed to think of a bigger one ever.

Steven Den Beste on October 13, 2013 at 7:52 PM

Wanderlust @6.46: I apologize for the delay in replying.
1. If the increased price of corn brings marginal lands into play, that will increase the supply available which will lessen the price rise. Also much of that marginal ground is in conservation programs where the land owner is paid by the Government not to farm it, so the tax payers get nothing for their money.
2. Unless a farmer signs a contract with an ethanol plant (a recent development) he has no knowledge or control over his crop’s destination. He sells to a grain dealer and delivers it to the elevator.
3. He is not immune to the regulations at all governmental levels. The EPA regs on equipment and land use apply regardless of crop quality or quantity. CARB decisions have caused a great increase in cost for farmers nationwide.
4. The cost of equipment and land has caused the disappearance of the small farmer who not exist on the low grain prices which have prevailed up to the last two years. Two dollar corn was common only a few years ago. Economies of scale have been necessary for survival.

FirelandsO3 on October 13, 2013 at 7:56 PM

We paid for other peoples retirements and health care with the expectation that others would do the same for us.

Did you pay for my retirement? How about the guys I work with today, did you pay them any money? Did you pay my daughter, other people’s daughters? How about their sons? How about children not yet born yet who will be forced to pay for expectation?

Now you claim that isn’t fair?

It has always been the way it is. The tax is a RUSE to get the money out of your pocket and to give you the feeling of entitlement, and unearned feeling of entitlement. It was the insidious what FDR made sure politicians could not get rid of his great evil socialism. You are an easy target it seems.

Fine. End the system, give us our money back and we’ll call it a square deal.

Who is going to pay you back? The money does not grow on trees, it cannot be printed without consequences for other innocents. You were not innocent and are not innocent, and neither am I. It is our responsibility, well at least mine, to get rid of evil things like this so that the society and nation we pass on to our children is a better one. Some people just do not care, they are selfish and in it for only themselves.

End SNAP, end welfare, end Section 8 housing, etc. etc. etc….

EXACTLY, and get rid of corporate welfare along with it. Get rid of public unions as well, as it is another form of welfare.

Those are all programs we pay for and get nothing in return, except disrespect and a kick in the teeth.

Yes they are, but it is far worse than even that. In return we get a worse society, a worse off nation, a worse economy and we institutionalize evil in our government.

And you call us slave masters….

MichaelGabriel on October 13, 2013 at 6:23 PM

If you demand that someone who owes you nothing be forced to give up their created wealth in order to provide for you I will call you nothing better than a slave master as that is what you are. Demand the government get rid of welfare, which was all created as part of the Social Security package. It is called Social Security, but what it is called is Old Age & Survivors Insurance. Social security included disability, unemployment, food stamps and welfare for women and other things that are destroying the nation by degrading the moral character of her people. You are just one such degraded person in this nation.

astonerii on October 13, 2013 at 9:06 PM

but ss/mc taken by force from us while these subsidy takers voluntarily partook of the system(s).
big difference really.

dmacleo on October 13, 2013 at 7:45 PM

Like Social Security and Medicare you vote for the politicians that leave the law on the books. You also voted for the politicians that promised these corporations a market for a product and then lured them into spending their money. There are a few places you can go live where you can voluntarily give up social security in this county. Galveston, Texas is one of the few places I can think of.

In each case though, each group was made promises, put their money in. All I am saying is if you are not willing to give up social Security and Medicare, then you should really keep your mouth shut on the companies not wanting to give up their government wealth transfers. Each of you are demanding that other people pay for your lives. Thus, each of you is standing on the exact same moral foundation, that of takers, moochers, slave masters. Each of you use the same weapon, electoral support.

All I am doing is making sure people see YOUR hypocrisy on this issue. Wealth transfers and slaves for you but not for them!

astonerii on October 13, 2013 at 9:13 PM

Dump Ethanol altogether – just drop the subsidies and let it compete naturally on its own. The same is true with wind and solar – it only makes sense as it is paid for out of someone else’s pocket! Look at PG&E in California – abnormally high prices for electricity because they are subsidizing solar and wind with their customers higher prices.

PG&E is a monopoly – Where else do you go other than Texas, Nevada etc. where it makes sense to go.

Convert much of Detroit to a refinery and lower the shipping costs of crude and the finished product. Detroit is a Democrat Wasteland.

Obamatrix on October 13, 2013 at 9:14 PM

FirelandsO3 on October 13, 2013 at 7:56 PM

Yeah, same here, had to go afk for a while.

Responses:

1. If the increased price of corn brings marginal lands into play, that will increase the supply available which will lessen the price rise. Also much of that marginal ground is in conservation programs where the land owner is paid by the Government not to farm it, so the tax payers get nothing for their money.

As has been mentioned elsewhere, private ownership has a much higher vested interest in conserving land than does Government. Multiple interventions here, each compounding the other: forced/paid conservation, subsidies to specific types of crops, and market supply distortions.

2. Unless a farmer signs a contract with an ethanol plant (a recent development) he has no knowledge or control over his crop’s destination. He sells to a grain dealer and delivers it to the elevator.

My understanding is that specific crops attract subsidies on the basis of use for ethanol production (e.g., non-food corn vs corn for human consumption). So while he may not know what refinery the crop is ultimately processed in, he should know that if his crop is not used for human consumption – barring any other industrial use for the type of crop – that the backstop will be ethanol production.

3. He is not immune to the regulations at all governmental levels. The EPA regs on equipment and land use apply regardless of crop quality or quantity. CARB decisions have caused a great increase in cost for farmers nationwide.

No doubt, I alluded to this earlier. One of the recent regulatory insanities on the horizon is to prevent children from working on farms under the guise of “safety”. The overwhelming regulatory burden is what drives small farms out of business and rewards the large rent-seekers.

4. The cost of equipment and land has caused the disappearance of the small farmer who not exist on the low grain prices which have prevailed up to the last two years. Two dollar corn was common only a few years ago. Economies of scale have been necessary for survival.

The catch-22 of using more complex machinery that drives higher production volumes per acre is that the utilisation of that equipment (runtime hours) drops even as the acquisition cost rises significantly. There is a fine line between rental companies that offer equipment for hire (not requiring the capex investment) vs availability of the equipment when harvests come in (schedule pressures). These issues are faced by miners, manufacturers, and service providers as well as farmers, and are all built into the challenge of running a business.

Scott Adams, of Dilbert comic fame, wrote an article that was cited in the Headlines section here over the weekend about the difference between being in business because of one’s passions vs a dispassionate focus on managing a balance sheet. It was an excellent article, especially (in the context of farming) given the investment cost of running a modern farm. I recommend it.

Wanderlust on October 13, 2013 at 9:49 PM

astonerii on October 13, 2013 at 9:13 PM

well I am fully disabled and, so far for last 10 years, have refused to take the ssi/mc benefits I qualify for so not sure where you find MY hypocrisy.
I’ve also often advocated for changes to the system and to make it so a person does not get 100x or more than amount they pay in on the backs of future taxpayers so I, again, not sure where you find MY hypocrisy.
I also must pay for reduced fuel mileage, longer warmup times (in maine thats a real issue) small engine damage and more for these subsidies I am supposedly a hypocrite for wanting to repeal.
you know what?
I found my hypocrisy, its my a$$ and you can kiss it.

dmacleo on October 13, 2013 at 9:51 PM

There’s no bigger nor more expensive version of Rent Seeking going today. I’m hard pressed to think of a bigger one ever.

Steven Den Beste on October 13, 2013 at 7:52 PM

Oh, no doubt. Ethanol has all three bases covered:

1. Subsidies for growers and producers? Check

2. Mandatory production targets? Check

3. Mandatory market (EPA blend regulations)? CHECK

We are screwed, screwed, screwed…

Wanderlust on October 13, 2013 at 9:51 PM

chasdal on October 13, 2013 at 7:28 PM

Responses:

[N]o, not really. I doubt there is anyone on this board who was alive much less voting age when ssi was approved.

This is by design: if government can commit voters to fund something before they are born, they have no choice.

[W]e have all been under the thumb of this program our whole lives w/ absolutely no say because no politician will touch it.

Of course they wouldn’t, and again, this is also by design: voters who pay are only marginally affected (spreading out the costs onto a large cohort) vs voters who receive, who are significantly affected (much smaller cohort but with a lot to lose if the law changes). It’s why the biggest danger to our way of life is the continued use of this principle in politics, especially where the “large cohort of voters who pay” haven’t even yet been born. They can’t push back at all, so politicians fear only those who can – the ones receiving the payments.

[T]o make it seem like our fault when its due to pressure from each generation of seniors is a defective argument.

The only fault I mentioned was for people who assume that Social Security and Medicare are “pay in” programs where one’s payments “earn” them some kind of future benefit. This position is categorically false, as there is no law that directly ties one’s individual payments to a specific level of benefit, and the amount of the benefit can be arbitrarily changed by law at any time. In other words, no contract exists between the Government and the individual to guarantee any benefit whatsoever – despite what many politicians over the years have said. Again, read the law.

It is by design that “pressure from each generation of seniors” keep the system in its current state, as it is a very effective application of the smaller cohort of those receiving a benefit, where the loss to them would be significant, to offset any challenge from the larger, but less individually invested, larger cohort.

Wanderlust on October 13, 2013 at 10:03 PM

Wanderlust on October 13, 2013 at 10:03 PM

There is exactly 1 way to EARN guaranteed benefits from the government-service in the military.

Other than that-no has EARNED or is ENTITLED to anything! And yes I include Federal Bureaucrats and Members of the House and Senate in that statement as well as ALL Chief Executives/Cabinet dept heads past, present, and future.

The only reason that military members are entitled to that is they sign a contract (legal binding document) that spells out in detail EXACTLY what benefits they will have and what the hazards are. My grandfather EARNED every single damn cent of his VA benefits (tuition to veterinary college after he returned from WWII & VA disability checks in his last 5 years of life) until the day he died and my best friend EARNED all of his college tuition assistance with his 5 years of service in the Army (2 Iraq Tours).

In contrast I have done absolutely NOTHING (not for lack of trying) to entitle me to Food Stamps, Pell Grants, etc etc etc. Same for all the damn farmers, agribusinesses, “disabled”, poor, and aged folks who are squealing about MediCare, MedicAid, SS, SSDI, etc etc adnuseam

There was no PROMISE to PAY anyone…..just a giant stack of shite stinking lies. An amazing example of this is if anyone on here is old enough to remember when Reagan supposedly “saved” Social Security by “reforming” it? All he really did was increase the Retirement Age by 1 MONTH PER YEAR eventually from 62/63 to 65 (where it is today) with it eventually hitting 67 by 2027 (i.e. 4 years after our budget will be so top-heavy with “mandatory” payments there will be no room for anything else) and so lovingly kicked the can down the road to completely screw my parents (61 & 58 respectively) (and I for that matter (27)). And remember how much screaming and wailing and caterwauling there was?!

SgtSVJones on October 13, 2013 at 11:03 PM

Just a quick heads-up to everyone.

When you see someone suddenly posting “the facts about ethanol” and they are all positive things, you can bet your last dollar the poster is a paid shill of ADM or some other major consumer of ethanol subsidies.

Adjoran on October 14, 2013 at 12:01 AM

Just a quick heads-up to everyone.

When you see someone suddenly posting “the facts about ethanol” and they are all positive things, you can bet your last dollar the poster is a paid shill of ADM or some other major consumer of ethanol subsidies.

Adjoran on October 14, 2013 at 12:01 AM

I reckon ADM execs taught Buffet and Immelt a thing or two…

Wanderlust on October 14, 2013 at 1:39 AM

Old Country Boy on October 13, 2013 at 4:09 PM

Well said!

DAT60A3 on October 13, 2013 at 4:15 PM

The thing is, Social Security was never an investment; it was always a subsidy to the old. There is no interest on the money, and there never was, nor was there ever any intent for there to be any. The first people in it paid nothing, and the last people out will get nothing. That’s just the way it is going to be.

I personally would prefer to end it sooner rather than later, and the people nearly ready to collect would prefer to end it after they’ve gotten theirs, and as one generation robs the next it will continue until the entire edifice collapses, unexpectedly.

Voyager on October 14, 2013 at 2:36 AM

Adjoran@12.01
If I’m a paid shill, I wish someone would tell ADM because the checks must have been lost in the mail. I’m just someone who has been around farming all my life, I don’t allow ideology to blind myself to reality. I don’t farm, and my only connection to ethanol is putting it into my car’s gas tank for over ten years with no harm.
Paul Harvey’s farm began dying after WWII when returning farmers decided they liked modern conveniences as much as everyone else, and they couldn’t buy them with “three acres and a mule.” Farming has never been a free market, and to guarantee cheap available food, there has to be a safety net for the years when crops are greatly diminished. Creditors don’t simply write off loans just because it’s a bad year.

FirelandsO3 on October 14, 2013 at 4:48 AM

Can you blame them? They made business decisions based on government assurances…

astonerii on October 13, 2013 at 3:39 PM

Yea. That was their first mistake.

Tsar of Earth on October 14, 2013 at 8:16 AM

Johnnyreb on October 13, 2013 at 6:50 PM

Hence the fear from politicians to privatize.

Zomcon JEM on October 14, 2013 at 8:50 AM

Lots of great discussion in this thread!

Like wind and solar, ethanol is a big loser of a product; one which can only exist in the marketplace with a heavy dose of govt intervention. And we’ve been pouring money down these black holes for years and years, with no return or hopes that these industries can stand on their own… Let them fail already!

It all reminds me of governments’ pick of CFL bulbs and the support they put behind them. CFL’s were a crappy product that most people didn’t want anyway, they were hazardous, and they were the future! The govt spent tons marketing them, giving them away for free, and even tried to eliminate normal incandescents as a competitor. But government can’t do anything well – and as usual, they pushed a loser product when LED’s were already out there gaining traction all on their own. Are LED’s still expensive? Some are. But they will keep decreasing in price as the demand rises. And we will all eventually buy them because they are a good product and will save us money. All without the government’s intervention.

So back to fuel… We keep pushing a loser, while we’ve got a winner lurking in the background. Natural gas. Let’s just stop funding this ethanol insanity and get back to drilling please!!

(This also goes for wind and solar. We need to get the heck out of both and let the market drive innovation. If there’s money to be made, private business will find a way to get it. No government required!)

Free Indeed on October 14, 2013 at 9:38 AM

If ethanol mandates were lifted, refiners would process more crude into gasoline, and would produce more diesel as well as gasoline as there is a fixed ratio of about 2 barrels of gasoline and 1 barrel of diesel and heating oil from every 3 barrels of crude.

Diesel is relatively expensive because refiners can’t produce more without producing an even greater surplus of gasoline.

J Baustian on October 14, 2013 at 11:50 PM