Midwestern governors: Hey now, the Renewable Fuel Standard is totally legit

posted at 1:01 pm on December 31, 2013 by Erika Johnsen

No. No, it’s not.

In a joint letter to the president, Environmental Protection Agency Administrator Gina McCarthy and Agriculture Secretary Tom Vilsack, Iowa Gov. Terry Branstad, Kansas Gov. Sam Brownback, Minnesota Gov. Mark Dayton, Nebraska Gov. Dave Heineman, North Dakota Gov. Jack Dalrymple and South Dakota Gov. Dennis Daugaard argue in defense of the ethanol standard. The letter stresses the importance of ethanol as it diversifies America’s energy portfolio, gives consumers choices at the pump, supports economic development in rural communities and reduces harmful emissions across the nation.

Providing evidence of their claims, the governors point to an Iowa State University estimate that says “corn prices alone could drop 19 cents per bushel based on the proposed rule, which could bring corn prices below the cost of production for many farmers. The proposed EPA rule could also cause a ripple effect on agribusiness, our communities, and the entire economy.” …

“Specifically, we hope that you will encourage the EPA to increase the biodiesel volume to reflect current production levels, modify the cellulosic target to match production expectations, and reinstate the statutory conventional renewable fuel target since there is clearly no domestic supply shortage.” …

Yes, by all means, please do try to delude us all further about how the Renewable Fuel Standard somehow isn’t merely a shameless piece of corporate pork for the agribusiness lobby that mandates that energy companies integrate a politically-determined volume of ethanol into the fuel supply and hence forces consumers to purchase a product for which there would clearly be no free-market demand otherwise. Please continue to dismiss the fact that the RFS is actually a net detriment to the environment and that it negatively impacts the prices of food and gasoline, and subsequently that the EPA actually shouldn’t acknowledge this reality by finally relenting on the increased-volume requirements that would force refiners to blend a higher amount of ethanol into our gasoline than is safe for use in cars and trucks. Really, don’t let the obviousness of there being “no domestic supply shortage,” since the federal government is deliberately instigating an artificial incentive for more supply, stop you.

Five out of six of those aforementioned governors are Republicans, by the way. The ability to deride subsidies and federal intervention in the free market all day long, but then miraculously come up with reasons why just a few certain subsidies really are beneficial and worthwhile, is truly quite amazing.


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I don’t have anything to say. I just wanted to be first for once…

CaptFlood on December 31, 2013 at 1:05 PM

North Dakota Gov. Jack Dalrymple

That’s upsetting, since ND has the best economic record and since everyone wants a gov for pres….McCrory, your time is now.

nobar on December 31, 2013 at 1:07 PM

Thanks, Erika. This kind of exposure is how we straighten up the Republican party and get the country back in order. ~ RD

RumblinDurango on December 31, 2013 at 1:08 PM

yo Texans, let’s get out of this broken country

DanMan on December 31, 2013 at 1:08 PM

yo Texans, let’s get out of this broken country

DanMan on December 31, 2013 at 1:08 PM

You’ll have lots of extra room when the Austin-ites pack up and skedaddle, so put in a good word for me. I can help you build the wall ;-)

CaptFlood on December 31, 2013 at 1:16 PM

Money corrupts all…

albill on December 31, 2013 at 1:18 PM

It’s embarrassing. I live in Omaha. On most things, the Governor and the editors of the Omaha World-Herald are pretty sensible. On this, they are either delusional or disingenuous.

Ethanol does not make sense from either an ecological perspective or the perspective of wear, tear and efficiency when used in internal combustion engines.

I buy from gas stations that sell regular and premium gas that does not come with ethanol. It’s not good for lawnmowers or snow blowers and even in newer cars, it reduces gas mileage, obviating the benefits of the “cheaper” price.

I have relatives who have very large farms. They will survive if the price of a bushel of corn goes down by two dimes. Farms are not the bucolic New England settings of our imagination. They are large, mechanized businesses that efficiently produce large numbers of bushels of whatever per acre. The “whatever” can be corn, alfalfa or soybeans here.

South of here, Kansas farmers produce acres of wheat, again, on highly mechanized, highly efficient farms. Agri-business will survive without the subsidies and mandates.

Now, about those milk, sugar, rice and cotton subsidies in the farm bill …

Grinch on December 31, 2013 at 1:19 PM

You’ll have lots of extra room when the Austin-ites pack up and skedaddle,

nah Cap, we can use them for cooking, entertainment and to fluff the legislature every two years

DanMan on December 31, 2013 at 1:24 PM

Let’s say that when we get rid of the ethynol standard for fuel the price of corn drops below cost of prpduction. Guess what? Smart farmers will realize this ahead of the price drop and cut their production of corn down to grow more crops that sell above production cost.

Hence…Supply of corn drops…Hence price of corn jumps up higher. Farmers seeing corn prices climb will then increase production of corn to catch up with demand.

Simple supply and demand. Apparently, they don’t teach this to Midwestern Governors anymore. They stupidly think price of corn is entirely dependant uppn thwir being an ethynol mandated standard in our fuel.

A local High School Kid could make a better governor than these half-wits.

Varchild on December 31, 2013 at 1:25 PM

Is there a politician anywhere that can be trusted?

sadatoni on December 31, 2013 at 1:28 PM

Keeping speaking the truth HA, it is a sign of hope. We all know that politics is a way to get rich and gain power and that is exactly what this piece points out though not directly. Ethanol is a travesty and will always be so.

Pardonme on December 31, 2013 at 1:33 PM

Is there a politician anywhere that can be trusted?

I think us and Utah each have one. That Jeff Sessions guy seems pretty solid as well.

DanMan on December 31, 2013 at 1:33 PM

If they can’t make their costs of production in the sale of their product, they are either doing it wrong, or need to find something else to do – one without the demand that the rest of us subsidize it.

Corn is food for both Man and Beast….Corn Likker is Sippin’ Whisky!

Another Drew on December 31, 2013 at 1:40 PM

They’re Super-Cereal!

And this is a perfect example of the dysfunction of government- that Governors and Representatives and Senators job number one is to attempt to deliver money to their states from the Federal government that should never have been able to grab it in the first place.

M240H on December 31, 2013 at 1:41 PM

The letter stresses the importance of ethanol as it diversifies America’s energy portfolio, gives consumers choices at the pump, supports economic development in rural communities and reduces harmful emissions across the nation.

Where “choice” = “buying ethanol-flavored gasoline or walking.”

DarthBrooks on December 31, 2013 at 1:42 PM

yo Texans, let’s get out of this broken country

DanMan on December 31, 2013 at 1:08 PM

Only if Dewhurst and Straus are in the first group up against the wall.

Kafir on December 31, 2013 at 1:43 PM

Eliminate the CORN subsidy and ethanol entirely… farmers can always grow a better cash crop, say SOYBEANS or something else…

Khun Joe on December 31, 2013 at 1:47 PM

The subsidies should be phased out over a 10 year period, not yanked out from under businesses whose model is based on the current regulatory scheme.

Wigglesworth on December 31, 2013 at 1:58 PM

Now if only we saw something like this on HA about so-called immigration reform.

Wigglesworth on December 31, 2013 at 1:59 PM

yo Texans, let’s get out of this broken country

DanMan on December 31, 2013 at 1:08 PM

Does that mean Rick Perry would be President…of Texas?

NOMOBO on December 31, 2013 at 2:00 PM

The subsidies should be phased out over a 10 year period, not yanked out from under businesses whose model is based on the current regulatory scheme.

Wigglesworth on December 31, 2013 at 1:58 PM

Certainly, that is the sensible thing, but if it is not done within the time-span of one favorable administration that chances of it being done completely are pretty much nil.

M240H on December 31, 2013 at 2:03 PM

Money and special interests trump common sense and facts every time.

major dad on December 31, 2013 at 2:03 PM

The letter stresses the importance of ethanol as it diversifies America’s energy portfolio, gives consumers choices at the pump, supports economic development in rural communities and reduces harmful emissions across the nation.

How does this give consumers choices at the pump, if all the choices of gasoline MUST contain 10% ethanol? If consumers had the choice to buy gasoline containing, for example, 2%, 5%, or 10% ethanol at market-driven prices, which would they buy?

“corn prices alone could drop 19 cents per bushel based on the proposed rule, which could bring corn prices below the cost of production for many farmers.

If less corn was used to make ethanol, that would increase the supply of corn available for direct human consumption, or feeding to livestock, or making corn oil for cooking, or for export to foreign countries. Meat from corn-fed livestock would become cheaper, driving up demand, and there is probably lots of pent-up demand for corn on the world market from agriculturally poor countries, into which US-grown corn could be sold.

“Specifically, we hope that you will encourage the EPA to increase the biodiesel volume to reflect current production levels, modify the cellulosic target to match production expectations, and reinstate the statutory conventional renewable fuel target since there is clearly no domestic supply shortage.”

“Biodiesel” is a separate issue from ethanol, and has little to do with corn farmers. Biodiesel is usually made by reacting methanol (wood alcohol) with triglycerides found in animal fats and vegetable oils. The process may enable slaughterhouses and butchers to extract some value from fats cut away from beef and pork, but has little impact on agriculture.

Steve Z on December 31, 2013 at 2:03 PM

North Dakota Gov. Jack Dalrymple

That’s upsetting, since ND has the best economic record and since everyone wants a gov for pres….McCrory, your time is now.

nobar on December 31, 2013 at 1:07 PM

Upsetting indeed, since North Dakota produces lots of shale oil which can be refined for production of conventional gasoline and diesel fuel, and doesn’t need to produce corn ethanol to support its already-booming economy.

Steve Z on December 31, 2013 at 2:09 PM

Wigglesworth on December 31, 2013 at 1:58 PM

Perhaps a phase out but 10 years is far too long. Petroleum refineries are justified over a 2 year amortization period. So, I could support a 2 or 3 year phase out.

tngmv on December 31, 2013 at 2:12 PM

Phil Robertson Fired!

Do you agree?

tlynch001 on December 31, 2013 at 2:19 PM

So f**king sick of these government mandates. This ethanol junk has ruined 3 lawn mowers of mine in 2 years. It’s taken a toll on my car as well.

jawkneemusic on December 31, 2013 at 2:20 PM

Five out of six of those aforementioned governors are Republicans, by the way. The ability to deride subsidies and federal intervention in the free market all day long, but then miraculously come up with reasons why just a few certain subsidies really are beneficial and worthwhile, is truly quite amazing.

Which is why we can’t have any nice things.

rbj on December 31, 2013 at 2:29 PM

yo Texans, let’s get out of this broken country

DanMan on December 31, 2013 at 1:08 PM

I’m game, when do we start?

Midas on December 31, 2013 at 2:37 PM

The letter stresses the importance of ethanol as it diversifies America’s energy portfolio, gives consumers choices at the pump, supports economic development in rural communities and reduces harmful emissions across the nation.

Ha! “Consumer choice”. There is not one gas station within 40 miles of me that sells gasoline without an ethanol blend, and I am in a major metro area. And yes, I have done my research.

Difficultas_Est_Imperium on December 31, 2013 at 2:38 PM

And this is a perfect example of the dysfunction of government- that Governors and Representatives and Senators job number one is to attempt to deliver money to their states from the Federal government that should never have been able to grab it in the first place.

M240H on December 31, 2013 at 1:41 PM

THIS!

Tim Zank on December 31, 2013 at 2:40 PM

The ability to deride subsidies and federal intervention in the free market all day long, but then miraculously come up with reasons why just a few certain subsidies really are beneficial and worthwhile, is truly quite amazing.

“It’s different when we do it.”

myiq2xu on December 31, 2013 at 2:42 PM

The big problem with ethanol mandates is that many of the dry milling ethanol plants are actually majority owned by local farmers regardless of what name is on the sign. Many of them borrowed money to get into the game.

Steve Z on December 31, 2013 at 2:03 PM

Animal fats are more difficult due the constant changing feedstock. Most biodiesel plants have already gone into full bankruptcy sold off and torn down anyway.

Kermit on December 31, 2013 at 2:47 PM

Cellulosic ethanol has been an epic failure in ALL of the few plants which were built. But you well never hear of those fires and explosions on the evening news.

Kermit on December 31, 2013 at 2:52 PM

Cellulosic ethanol has been an epic failure in ALL of the few plants which were built. But you well never hear of those fires and explosions on the evening news.

When you end up melting alloys capable of withstanding 2050 Degrees F for months, you have a problem.

Kermit on December 31, 2013 at 2:56 PM

It’s embarrassing. I live in Omaha. On most things, the Governor and the editors of the Omaha World-Herald are pretty sensible. On this, they are either delusional or disingenuous LIARS.

Grinch on December 31, 2013 at 1:19 PM

No need to be politically correct. If it’s a spade, call it a spade.

timberline on December 31, 2013 at 3:12 PM

Have you guys really not recognized that Erika is a paid schill for oil interests and their legislative goals?

I couldn’t care less about ethanol but it’s another example.

The constant push for the ability to export OUR energy resources, raising OUR energy costs, and reducing OUR stockpiles for when eventually other major powers due bit a shortage though?

One day I hope you all realize how many people have you, and attempt to get you, arguing against your and our own interests as a nation.

It’d be nice if people like this had to disclose their market affiliations before attempting to sell you on them with the veil of objectivity.

Genuine on December 31, 2013 at 3:25 PM

Pure gasoline……….study done in 2003 when gas was selling for 1.50—that the true cost was some 5.25 when all costs accounted for which includes our 40 plus year “mandated” presence in the Middle east …….

Talk to me when a USA Marine has had to die for a gallon of ethanol.

Mandates…talk to me when the ethanol mandate gets as old as the mandated presence in the middle east to protect Saudi oil exports from the likes of Iran and Saddam Husien.

Damage to engine…just a fall back for poor maintainence or a mechanic that doesn’t know the real problem. Biggest thing most don’t do as the refiners give us poor quality gas and then use ethanol to bring UP the octane is to keep tanks filled on small engines to avoid condensation buildup.

I wont even mention the 1.50 ethanol is reducing gas at the pump for years….most just prefer to be “guided” by Oil propaganda as they attempt to keep market share.

sbark on December 31, 2013 at 3:43 PM

Gravy is addictive.

It’s helped the leftists over the last century as they slowly and incrementally ate away at the free market in this country. Get enough people hooked on enough gravy, and they will fight to keep their gravy flowing.

It’s exploitive of a basic defect in human nature, and is also the reason why taking apart the welfare state is an arduous process.

Adjoran on December 31, 2013 at 3:43 PM

Ethanol also damages engines, btw. It shortens the life of any engine which uses it regularly. The cost is certainly in the billions per year – cars that would have lasted 15 years or more on straight gasoline conk out in ten or fewer years.

Adjoran on December 31, 2013 at 3:44 PM

Wigglesworth on December 31, 2013 at 1:58 PM

It came in as a fait accompli, it should leave in the same manner.

END IT NOW!

Another Drew on December 31, 2013 at 3:45 PM

For once, MN is not the R culprit – we have gov. Dayton, a solid, socialist Dem governor. Whatever O says, he does. Talk about no guts, no common sense, no standards – but hey, Dayton has his $$$$ in SD where it’s not subject to the taxes gov.Dayton is imposing on the rest of the remaining residents in the state.

MN J on December 31, 2013 at 4:06 PM

Is there a politician anywhere that can be trusted?

sadatoni on December 31, 2013 at 1:28 PM

As a great man once said (and a much lesser mortal recently tried to hide behind), “trust, but verify”.

“Biodiesel” is a separate issue from ethanol, and has little to do with corn farmers. Biodiesel is usually made by reacting methanol (wood alcohol) with triglycerides found in animal fats and vegetable oils. The process may enable slaughterhouses and butchers to extract some value from fats cut away from beef and pork, but has little impact on agriculture.

Steve Z on December 31, 2013 at 2:03 PM

Biodiesel is nonetheless a government intervention in markets that reduces consumer choice and drives inefficiencies – as the calorific value of a gallon of diesel/biodiesel blend is quite a bit lower than pure diesel.

The constant push for the ability to export OUR energy resources, raising OUR energy costs, and reducing OUR stockpiles for when eventually other major powers due bit a shortage though?

Genuine on December 31, 2013 at 3:25 PM

Evidently economics isn’t your thing, dude: blocking exports under Smoot-Hawley has been noted by economists as one of the major causes of the Great Depression. But you keep f’n that chicken, as the guys at Ace would say.

sbark on December 31, 2013 at 3:43 PM

There’s so much wrong in every one of your comments here that it just did my head in – lemme guess, you’re a hardcore Democrat, right?

Wanderlust on December 31, 2013 at 4:17 PM

The subsidies should be phased out over a 10 year period, not yanked out from under businesses whose model is based on the current regulatory scheme.

Wigglesworth on December 31, 2013 at 1:58 PM

Having been exposed to the hijinks that is Congressional funding in the military procurement world, anyone who depends on Government/legislation to support an investment case, in my humble opinion, deserves what they get when the rug eventually gets pulled out from under them. These guys were big boys, they risked their money knowing full well that legislation can be changed, but did it anyway. I have no pity for them.

Wanderlust on December 31, 2013 at 4:20 PM

Even Al Gore has said that corn based ethanol is a bad idea.

Alferd Packer on December 31, 2013 at 4:35 PM

Even Al Gore has said that corn based ethanol is a bad idea.

Alferd Packer on December 31, 2013 at 4:35 PM

He also said that the center of the Earth is very hot…several millions of degrees.

Murphy9 on December 31, 2013 at 4:39 PM

Throw this lobby a bone!!

Require all farm vehicles used in growing corn be 100% alcohol fueled — by 2015~~

in exchange for making ethanol an optional additive to gasoline.

KenInIL on December 31, 2013 at 5:34 PM

OUR Republican governor Rick Scott signed the REPEAL of our state’s Renewable Fuels Standard in June of this year. Greenies wept.

The trick is still going to be getting rid of the crap.

tree hugging sister on December 31, 2013 at 5:43 PM

Five out of six of those aforementioned governors are Republicans, by the way.

All approved by Karl Rove and K Street because they support crony capitalism wholeheartedly.

Steve Eggleston on December 31, 2013 at 6:07 PM

…CORN COUNTRY!

KOOLAID2 on December 31, 2013 at 11:28 PM

Five out of six of those aforementioned governors are Republicans, by the way. The ability to deride subsidies and federal intervention in the free market all day long, but then miraculously come up with reasons why just a few certain subsidies really are beneficial and worthwhile, is truly quite amazing.

You see, this is exactly why politics should be left to the politicians. The rest of us are just not that flexible.

There Goes the Neighborhood on January 1, 2014 at 12:37 AM

“…gives consumers choices at the pump…”

Which pump do I choose then, so I don’t have to use food for fuel? I want it clearly labeled at my gas station.

Fleuries on January 1, 2014 at 8:48 AM

gives consumers choices at the pump

pure bullcrap. nowhere in this state can I get gas w/o it involved.

dmacleo on January 1, 2014 at 8:51 AM

The letter stresses the importance of ethanol as it diversifies America’s energy portfolio, gives consumers choices at the pump, supports economic development in rural communities and reduces harmful emissions across the nation.

Let’s test the assertions:
1. “Diversifies energy portfolio”: NO…it MANDATES use of ethanol in applications where it is NOT APPROPRIATE OR USEFUL.
2. “Gives consumers choices at the pump”: NO…until the mandate is repealed and pure gasoline is once again actually available at the pump, consumers have NO CHOICE.
3. “supports economic development in rural communities”: Only in the same sense that casinos and like enterprises do. The problem is that this kind of development can be sustained only by government action: there is no “real” economic enterprise being carried out.
4. “reduces harmful emissions”: This has been thoroughly disproven. Not only does production of a gallon of ethanol require MORE than a gallon of gasoline/oil to produce, but ethanol just produces DIFFERENT pollutants – not LESS!! Ethanol is also a less efficient fuel than gasoline: it REDUCES MILEAGE!!

The entire statement is 100% BS!!! The ethanol mandate is a pure anti-consumer BOONDOGGLE which acts as an indirect tax on all consumer goods. It is hugely destructive and should be repealed immediately!!!

landlines on January 1, 2014 at 12:39 PM

Even damn Republican governors support government loonacy. Both parties can be bought for a price.

SC.Charlie on January 1, 2014 at 1:33 PM

Where can I buy Iowa-free corn?

Another Drew on January 1, 2014 at 5:47 PM