Oh, noes: 80 percent of biofuels producers have cut back production due to federal-mandate uncertainty

posted at 6:01 pm on May 15, 2014 by Erika Johnsen

Well, who woulda’ thunk it? The Environmental Protection Agency finally decided to acknowledge the incompatibility of the Renewable Fuel Standard with both America’s declining gasoline consumption and the environmental degradation caused by the production of corn ethanol, thereby obliterating the entirely government-imposed “market” for biofuels — and what do you suppose happens? Via The Hill:

Almost eight in 10 biodiesel producers in the United States have cut back production this year due to uncertainty over federal policies that encourage making the fuels, the National Biodiesel Board (NBB) said.

The report released Wednesday was based on a survey the NBB conducted. In addition to the finding that 78 percent of producers reduced output, 57 percent of companies have idle or shut down plants and 66 percent have reduced their workforces or are considering it.

Almost all of the surveyed companies attribute the industry’s decline to two recent policy developments: the expiration at the end of last year of the tax credit to produce biodiesel and a proposal last year by the Environmental Protection Agency not to increase the biodiesel mandate in the Renewable Fuel Standard.

“Inconsistency in Washington is wreaking havoc on the U.S. biodiesel industry,” Anne Steckel, NBB’s vice president of federal affairs, said in a statement.

“Inconsistency in Washington is wreaking havoc on the U.S. biodiesel industry”? …Yeah, how about we go a little more big-picture and try, “The U.S. biodiesel industry’s utter dependence on handouts from Washington is wreaking havoc on the U.S. biodiesel industry,” perhaps? This major slowdown in production is precisely why, when the EPA announced late last year that they would be reevaluating the annually-increasing volumetric requirements mandated by the Renewable Fuel Standard for 2014 (a decision on which we’re still waiting, by the way), the biofuels industry flipped out — and their respective lawmakers have been engaged in a relentless pander-fest ever since, most recently at a Capitol Hill press conference on Wednesday including Democrat Sens. Heitkamp, Durbin, Klobuchar, Franken, Donnelly, and Cantwell:

“We want to make sure that biofuels are included in the future when it comes to America’s energy,” Durbin said. “When there’s uncertainty about the future of biofuels, there’s uncertainty about these jobs.”

Klobuchar and Franken said Minnesota officials have estimated that the EPA’s biodiesel mandate would cause the state to lose 1,500 jobs.

Yes, it’s always very easy to talk about the tragic loss of the jobs that have been created via direct federal largesse, but what these senators aren’t talking about is the opportunity cost, i.e. the other jobs that would have been created in other and more useful areas of the private sector, if the federal government wasn’t depriving taxpayers of those dollars in the first place. Much like the huge dropoff in the egregiously subsidized wind industry without the surety of their finely tuned array of precious subsidies, the fact that biofuels producers are cutting back without their own mandates and subsidies firmly in place should serve as a red flag about the real and economically (not to mention environmentally) costly nature of this industry.


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federal-mandate uncertainty ie. democrat governance.

Murphy9 on May 15, 2014 at 6:08 PM

Cut it back to zero and drill.

Sven on May 15, 2014 at 6:12 PM

Next we need to repeal the light bulb mandate, the health insurance mandate, and all other unnecessary interference which is making our lives more miserable and expensive.

landlines on May 15, 2014 at 6:14 PM

Bwahahahahahahahahahahahahahah….You’re up, Schad.

vnvet on May 15, 2014 at 6:18 PM

It’s really hard for someone as dumb as I am to go from thread to thread, seeing ridiculous problems with obvious answers (well, obvious to me)… and my intellectual betters do not see the answers that my simpleton mind grasps instantly…

The government wants to promote renewable energy? Well, hell… that’s easy. Instead of pissing away billions of dollars on boondoggles like ethanol and Solyndra and Fisker, just offer an X-prize. One billion dollars to the company that brings a working, practical, cost-effective electric car to market. One billion dollars to the company that brings effective, cost-effective solar panels to market. One billion dollars to the company that can make auto fuel from algae for two bucks a gallon.

Governments don’t innovate. People do. Incentivize creativity, and oil might be gone in a decade or two.

Sorry… I guess that’s just retarded, Sir…

PointnClick on May 15, 2014 at 6:20 PM

It’s pretty simple, really. If you can’t sustain an industry without federal subsidies, then you can’t sustain that industry. Period.

Chewable Jim on May 15, 2014 at 6:21 PM

If it was economic it wouldn’t need government subsidies to survive. I think that answers the question.

And by the way, why should we be worried about losing 1500 jobs if we don’t care about the tens of thousands that would be created with the Keystone Pipeline. 1500 jobs is insignificant in the eyes of the administration.

COgirl on May 15, 2014 at 6:28 PM

If necessity is the mother of invention then in economic terms, necessity can be appropriately substituted with the word demand. The Democrat’s insistence on utter ignorance of any economic maxim is costing us a fortune.

anuts on May 15, 2014 at 6:47 PM

PointnClick on May 15, 2014 at 6:20 PM

Agreed

wifarmboy on May 15, 2014 at 6:53 PM

Fantastic, lets take the production cut to 100%

leader4hru on May 15, 2014 at 7:21 PM

Aren’t there theories that we do this to deliberately drive food up (which we produce a lot of) to offset against the price of oil (which gulf states do not produce much of)? Even if that were true, it seemed like we put way too much into it, considering how much oil we consume in proportion to how little they eat. But still, there are bilderberg-type theories surrounding this whole scheme.

Capricio on May 15, 2014 at 7:22 PM

You mean that if they want a productive crop they might have to… GROW CORN TO EAT?

Perish the thought!

They’ll let it go fallow instead, not enough graft in feeding people.

ajacksonian on May 15, 2014 at 8:03 PM

…how is JugEars going to pay his bundlers?

KOOLAID2 on May 15, 2014 at 8:20 PM

The government wants to promote renewable energy?

PointnClick on May 15, 2014 at 6:20 PM

Just so you know. There is not such thing as renewable energy. It doesn’t exist.

Oldnuke on May 15, 2014 at 8:28 PM

The biggest mistake the ethanol industry ever made was allowing the RFS to pass, which permitted gasoline retailers (oil companies, natch) to rack and retail their product. They accepted a guaranteed market in their infancy in return for giving oil retailers a veto on their growth.

Naturally it’s come back to bite them. Lie in bed with dogs, wake up with fleas.

I use E85 frequently because it is often the least expensive fuel on the market to run on per mile here in the Midwest, and I drive a lot. It’s good to have the option, and to exercise it as your pocketbook demands!

Remember paying farmers not to farm? Or paying them to lock their grain in storage for two years in hope that inventory would clear and get prices up to a profitable level? Or letting grain rot in piles? That cost the taxpayer a shit ton more than ethanol subsidies ever have. Energy from the ground has turned ND into a booming state, and ethanol changed the fortunes of farm states and the millions living in them as well.

Caustic Conservative on May 15, 2014 at 9:43 PM

Klobuchar and Franken said Minnesota officials have estimated that the EPA’s biodiesel mandate would cause the state to lose 1,500 jobs.

Reassign those 1,500 people to dig ditches on even days and fill them back in on odd days. We’ll save money in the end.

slickwillie2001 on May 15, 2014 at 10:31 PM

We shouldn’t be forced to put corn in our gasholes. Neither should these welfare bum ethanol companies have money out of our paychecks.

This isn’t complicated.

Another Libertarian on May 15, 2014 at 10:40 PM

Who is forcing you to do that? Last time I was at the pump there was premium gas. It just cost 1.09 more a gallon. Knock yourself out.

Caustic Conservative on May 16, 2014 at 9:10 AM

What’s holding up the legalization of incandescent light bulbs? It’ll cost tens of thousands of jobs in the CFL and LCD light bulb businesses — but all those jobs are in China.

Wait a minute — all the incandescent light bulb jobs are in China, too.

Never mind.

wagnert in atlanta on May 16, 2014 at 4:23 PM