Corn Commentary

What Facts Are Really Facts?

whats in gas

(This guest blog is provided by Matt Reese who writes for Ohio’s Country Journal).

It can be really hard to know which way to feel about some issues because these days it seems everyone has their own set of “facts” that conclusively proves their point. The problem, of course, is that as soon as you conclusively prove a point, you run into someone else who has an entirely different set of facts that definitively proves their point, which happens to be the opposite view of the first point that was proven. Confused yet? I know I am.

One only has to sit and listen to a political debate on any issue between any candidates of any party to get all caught up in a muddled mess of my-facts-versus-your-facts. Then there is often a behind-the-scenes reporter who does a fact check on the aforementioned facts to clarify the situation. Unfortunately, more often than not, these fact checks often just compound the problem by providing another opportunity to spin the issue with a set of suspect facts about the facts.

Of course, in my line of work I see this all the time in great detail with the wide variety of complicated issues facing food and agriculture. This is certainly true in the current debate over the Environmental Protection Agency’s impending decision about the levels set in the Renewable Fuel Standard (RFS). The recent story by Joel Penhorwood on this issue highlights the divergent facts in the RFS debate. Here is an excerpt:

ACCF (an anti-ethanol group) Executive Vice President Dave Banks responded strongly to the outcry by Ohio ag and pro-ethanol groups.

“I think these guys sometimes get lost in this weird, parallel universe in which they actually convince themselves that this mountain of damning, definitive science and data about corn ethanol’s environmental impact doesn’t exist, or that folks don’t actually know about it,” Banks said in a statement.

That environmental impact Banks spoke of is one of negative consequence. The ACCF points to research that they say shows the production of ethanol doubles greenhouse emissions when compared to gasoline over 30 years, making it a dirtier fuel in the end — a highly disputed claim. 

“It’s just misinformation,” said Ohio grain farmer Chad Kemp about the anti-RFS ads. “The things they’re saying there is no scientific backing for. They’re trying to get the people to jump on board with it and basically, their idea is to kill renewable fuels in this country.”

The heated debate over the RFS really ramped up in recent weeks with dueling ad campaigns in Ohio and Washington, D.C. highlighting very different sets of facts pertaining to ethanol’s impact on the environment, the economy and so forth. So whose facts are right?

In the end, the complexities of these various issues generally boil down to some basic truths. The key for me is getting down to those basic truths and sorting out how I feel about those. So, here are some facts about the RFS (that are really facts) that helped me to form my opinion.

  1. Congress created and approved the RFS.
  2. Businesses planned their investment strategies based upon the RFS.
  3. The RFS was implemented and businesses responded as they saw fit.

While there are many more nuances to the RFS debate, for me this set of undisputable facts is reason enough to support it. The government made a deal. Regardless of whether you like the deal or not, it was made and I believe it should be upheld and seen through to fruition. Maybe this set of facts doesn’t address your primary concerns about he RFS. Here are more real facts.

  1. Ethanol offsets the purchase of foreign oil.
  2. Ethanol is made from corn produced by American farmers.

I would rather support farmers in the U.S. with my energy dollar than who knows who I am supporting when I use petroleum.

In the end, there is usually at least some kernel of truth in either side of these debates. Which facts matter to you? The way I sort through them is by identifying the key (and real) facts of the matter that really matter to me.

Either way, the RFS is a no-brainer in my book.

Love It or Hate It- NPR Has Mixed Emotions on Ethanol

NPR needs an all-hands-on-deck meeting. Recently, the reporters covering ethanol seem to be operating under almost opposing sets of assumptions. Sometimes, they hit it out of the park. Defying anti-ethanol propaganda disguised as conventional wisdom, they cut through the crud and achieve the accuracy journalists value above all.

But, sometimes, they fall victim to the trap laid by anti-ethanol activists who have worked for years to ingrain their false facts so deeply that they achieve an aura of un-questionability.

In this story from June 10, NPR reporter Grant Gerlock tackles why U.S. farmers and the EPA disagree vocally on changes made to the Renewable Volume Obligations outlined in the Renewable Fuel Standard. Gerlock speaks with a variety of guests, from the Union of Concerned Scientist’s Jeremy Martin to Iowa State University’s Bruce Babcock, an agricultural economist. While this may appear to be a good faith effort to present a well-rounded view of the situation, Gerlock’s unquestioning acceptance of anti-ethanol rhetoric quickly becomes apparent.

Speaking with USDA researcher Rob Mitchell, a proponent of switchgrass as a feedstock for cellulosic ethanol, Gerlock makes a mental leap based upon the assumption that some ethanol is good and some is bad. He just assumes that corn-based ethanol could not possibly lower greenhouse gas emissions – even in comparison with oil. While both products do so, it does a grave disservice to suggest that the one more widely available today does not offer this important benefit.

To read the transcript (and see the incredible leap of misinformed faith for yourself), click here.

Yet, in a piece by Michael Tomsic that host Audie Cornish highlighted, NPR accepts NASCAR’s assertion that corn-based ethanol blends have been key to their efforts to make the sport “more green.” Discussing the move to ethanol, Tomsic sites that switching to a 15 percent ethanol blend has “reduced emissions by 20 percent” for NASCAR.

To read the transcript, click here.

Notably, he not only touts the virtue of using E15, he also points out that legendary driver Dale Earnhardt Jr. no longer has concerns about how his car will perform on the fuel after having a chance to use it.

Yes, NPR showed in the first instance that it can fall prey but, in the second, it showed that others within the organization can find the positive, honest story America’s farmers have to tell about ethanol- the story which they have raced feverishly to share.

Want to say kudos highlighting NASCAR Green? Want to set the record straight on corn-based ethanol’s environmental advantage? Either choice, there is a way.

NPR offers listeners the opportunity to submit their comments to the Office of the Ombudsman. Unlike traditional comment sections, the letters submitted are considered carefully. Each week, some are even chosen to be read aloud on the air.

So no matter what you want to say, speak up! They have the story half-right. Your voice can make a difference.

To contact the NPR ombudsman, click here.

NASCAR Starts Fifth Year on E15

american-ethanol-fuelFuel with 15 percent ethanol, known as E15, has been approved for sale by the Environmental Protection Agency since January 2011. Two months later Sunoco Green E15 debuted at the 2011 Daytona 500.

American Ethanol
celebrated the start of the fifth year of its partnership with NASCAR at the Great American Race this weekend. “They’ve put over six million hard-earned miles at high RPMs on these race cars,” said Tom Buis of Growth Energy at the race on Sunday. “They got better performance, they didn’t lose mileage and they haven’t had a single problem.”

Interview with Tom Buis, Growth Energy, at Daytona 500

NASCAR Chief Operating Officer Brent Dewar says the partnership with American Ethanol has been very positive for them. “What we love about ethanol is not only is it a great renewable but it’s a great racing fuel, higher octane so it’s great performance for the drivers,” he said. “It’s also great for the environment, reduces greenhouse gases, homemade here in America …. it’s a win-win-win and in car races we’re all about winning!”

Interview with Brent Dewar, NASCAR, at Daytona 500

Growth Energy, the National Corn Growers Association, New Holland and POET-DSM are partners in American Ethanol with NASCAR.

nh-daytona-dillonAmerican Ethanol NASCAR driver Austin Dillon says he really supports the efforts American Ethanol and is proud to be part of it. “It’s funny that you wouldn’t think NASCAR would be a “green” sport” but what we’ve done with American Ethanol has helped us be the leader in sports with green American Ethanol,” said Dillon.

Dillon drove the number 33 car in the Xfinity Series Alert Today Florida 300 race at Daytona Speedway on Saturday and the #3 car in the Daytona 500 race for Richard Childress Racing.

Interview with NASCAR driver Austin Dillon

If It Looks Like Big Oil, and Walks Like Big Oil, It’s Probably…Big Oil

enviro impactsA story in today’s New York Times cites a new study by the World Resource Institute that attempts to discredit the significant and increasing contributions of biofuels to meet the world’s energy needs. On close inspection two things become abundantly clear.

First the so-called “new” study is nothing but the same old stuff trotted out by the anti-ethanol crowd nearly annually to see if any of the misinformation sticks to the wall. Take the wig and mustache off and it’s the same old pig.

Second, the former journalist in me always says to consider the veracity of the source to validate the data. In this case the World Resource Institute is funded by Shell and Statoil, two of the world’s largest oil companies. Always follow the money.

This fraudulent study has more holes than a colander but to address some of the most egregious point by point:

Ethanol production is not inefficient? Some of the best research to date from the University of Illinois Chicago shows you get a 40% net energy gain from ethanol production compared to all the energy used along the production chain from farm to gas pump.

The article begs the question why have so many invested billions of dollars in biofuels if they are a bad idea with no future? They do so because ethanol is a plug and play fuel source that meets the needs of our transportation fleet today. What makes it even more attractive is the bright future for biofuels. Automakers in Detroit make no secret of the fact that the next generation power plant for cars will be smaller, higher compression engines. And the best fuel for this future automotive technology is octane rich ethanol.

It also becomes abundantly clear that these think tank folks might want to meander outside the Washington, DC beltway and visit a farm. They question the percentage of the corn crop being used for ethanol today. It’s not how much of the crop we are using for biofuels but how large the crop has gotten. We have grown the largest 11 corn crops in history in the last 11 years. We currently have the largest carryout (supply of corn) ever so feedstock is abundant to meet all demand for corn.

And all of the above has been accomplished in the US on virtually the same acreage, and with less environmental impact. This is an amazing accomplishment that should make all Americans proud.

Enjoy the Cheap Gas Ride

cheap gasNot to sound like a lunatic but it may be entirely possible, maybe even likely, the American public will be begging for a return to $3.60 gas in the near future.

I know it sounds crazy, but if you are following the public debate you can already see the discussion heating up to argue the true implications of today’s bargain basement petroleum prices. The euphoria consumers and market analysts alike were experiencing a few weeks ago is wearing off like a cheap wine hangover.

One big concern is that near term economic gains in the US related to cheaper fuel may be overstated and ultimately result in deflation and a global economic slowdown.

It is becoming increasingly evident that it could take a few years before the full ramifications of this gas guzzlers holiday are known. However, some comments by an oil industry executive this week provide a peek behind the curtain that often shields the business maneuvering and real objectives of international big oil.

The boss of oil giant BP Bob Dudley has said that oil prices could remain low for up to three years. What results next may make our previous high oil prices seem like a gift from grandma.

Once big oil has beaten oil upstarts like the domestic fracking industry to a bloody pulp, they will remerge from the ashes like a phoenix ready to spank bad little consumers for cheering the development. The paddle they will use according to some industry experts will be $200 a-barrel oil, a considerably richer prize than the $110 a barrel which preceded the $47 a barrel we are currently experiencing.

Any reasonable person would wonder why a business would take such a gamble, cut investment, cut jobs and sustain such a huge loss? The simple answer is they will do it because they can and the payoff is immense.

Sure oil countries like Norway, Russia, Venezuela, Scotland, Nigeria and Angola will take a beating but the big players in OPEC – the ones with the large expanses of beach and no water – have lower production costs and care only marginally more for their business partners than they do the consumers that they bleed every day.

People’s Bank of China governor Zhou Xiaochuan also points out low oil prices could slow down China’s development of renewable energy projects. In a wondrous masterpiece of understatement he says: “We worry a little bit that the price signal may give disincentive for new energy types to develop and could reduce investment in new non-fossil energy.”

Does anyone know how to say “duh” in Mandarin?

If we really want to throw the market manipulating overlords at OPEC a curve we should do the opposite of what they expect. Instead of grumbling and driving circus clown size cars we should immediately find ways to encourage an expansion of existing non-fossil energy development such as ethanol. Then we should back that up by launching the largest energy research and development project in history. I contend we will be forced to do this as finite oil supplies run out. Why not do it now rather than waiting until the wolf is at the door.

Besides, in the business world innovation is one of the few things that can still trump monetary muscle.

Binging on Earth Day Irony

dead dolphinOk, I admit I love irony. So I had to chuckle a little bit as everyone was getting fired up about the arrival of another Earth Day. The irony lies in the fact that this momentous occasion occurs two days after the anniversary of the Deepwater Horizon oil disaster in the Gulf of Mexico.

To refresh your memory this was the largest accidental marine oil spill in the history of the petroleum industry, estimated to be up to 31% larger in volume than the previously largest, the Ixtoc I oil spill. Following the explosion and sinking of the Deepwater Horizon oil rig, a sea-floor oil gusher flowed for 87 days, until it was capped on 15 July 2010. The US Government estimated the total discharge at 4.9 million barrels.

That’s 210 million gallons of oil and we don’t even want to talk about the 2 million gallons of toxic chemicals they call dispersants which were either to:

  • Hide BP’s Faux Pas and remove it from public display
  • or allow nature to recover faster

The irony gets tastier if you are my age because I am old enough, ok more than old enough, to have celebrated the first Earth Day and remember how this whole affirmation of Mother Terra Firma began. It started 44 years ago after a US Senator from Wisconsin, Gaylord Nelson, witnessed the ravages of a massive oil spill in Santa Barbara, California. Inspired by the student anti-war movement, he realized that if he could infuse that energy with an emerging public consciousness about air and water pollution, it would force environmental protection onto the national political agenda.

Well the Earth Day recognition has lasted but the public consciousness and the leadership of our elected officials lacks a little staying power. Today, the oil industry continues to be one of the largest polluters in the world. And because of their deep pockets and political influence they have been allowed to blithely go about their business with little or no consequences.

The BP spill offers a great case in point. Big oil responded initially and spent money for clean-up efforts and they put on a contrite face while the cameras were on. But take a closer look today at their efforts in court to dodge any more clean-up costs and the fines that were imposed. They say their job is done even as the number of dead dolphin washing up on beaches topped 900 last week. Kemp sea turtle have been nearly ravaged into extinction in Gulf waters.

And to add insult to injury petroleum interests are now spending millions to mislead the public. Big oil is poisoning the system as well as the environment. They are doing everything they can to keep a death grip on the liquid transportation fuel market.

That’s why today—Earth Day — you should take few minutes to educate yourself regarding the sheer audacity of oil. It’s as simple as going to to shine a spotlight on the oil companies’ dirty tricks and dishonest attacks. Americans deserve to know how oil companies have rigged the system to make us pay more at the pump—sending their profits up while our air and water quality goes down.

Energy Independence No Greased Pig Fantasy

There is an old saying…”make hay while the sun is shining.” Dating back to at least 1546 this traditional farmer logic translates into grab opportunity while you can. This has never been truer regarding the nation’s energy situation. A new report by the Energy Information Administration makes that abundantly clear. EIA says the greased pig fantasy of energy independence in the US is real.

We’ve reduced our dependence on foreign oil from 60 percent to 45 percent in the last few years. This is real, quantifiable progress brought on by smaller, high mileage vehicles, less driving due to a sagging economy, 15 billion gallons of ethanol capacity and domestic oil production on steroids.

Net oil imports to the U.S. could fall to zero by 2037 because of robust production in areas including North Dakota’s Bakken field and Texas’s Eagle Ford formation, according to this Department of Energy projection released this week.

Most days I am just numb about government studies and gasoline prices. I pull up to the pump, try to ignore the price and move on about my day. But there are other days too when I am angry about being held hostage by oil companies, and especially about their cavalier approach to crushing any real competition.

And that is exactly that they are trying to do with ethanol today.  So, here is a novel thought. Let’s take this time of energy abundance to think big and invest in a more sustainable energy future rather than waiting until the wolf is at the door. Because, rest assured petroleum remains finite and the next generation will wonder why we squandered this brief respite from oil piracy.

Oil imports have fallen to about 5 million barrels a day from a peak of almost 13 million barrels in 2006, thanks in part to advances in techniques such as hydraulic fracturing and horizontal drilling in shale rock. Despite this, we continue to spend $1 billion a day protecting our assets in foreign oil. And there is no getting around that gasoline is bad for our health and the environment.

make-hayNow would be a great time to call your Congressman and Senator and ask them to show some vision regarding biofuels and our energy future. The rapid growth in ethanol production has shown us the promise of a bio-based fuel future. It’s time to make hay!




Would Someone Please Tax Me Like Big Oil?

oily bird picIt’s tax time again. You know that short window during the year when it’s ok to complain about being taxed. Given the number of people who remain unemployed it really is kind of bad form to complain the rest of the year.

So as you belly up to do your part to keep the skids of government greased here is a whopper of a tax tale to help you really get the bile out and make your complaining count. I am guessing that it will come as no shock to you that each year the average American pays more than 20 percent of their income in federal taxes. This does not include state and local taxes.

So this begs the question; shouldn’t an industry that makes $175,000 per minute pay at least that much? This is a real number reflecting the profits of the five largest oil companies. Together they earn more in one minute than 95 percent of Americans earn in a year.

However, Reuters news service estimates that Chevron, ConocoPhillips, and ExxonMobil pays effective federal tax rates of 19 percent, 18 percent, and 13 percent, respectively. Reuters noted that this is “a far cry from the 35 percent top corporate tax rate.” Likewise the tax bracket for the most successful Americans is 35%.

The petrol industry has prospered over the past decade, thanks to high oil and gasoline prices. The five largest companies — BP, Chevron, ConocoPhillips, ExxonMobil, and Shell — earned more than $1 trillion during this time. In the first nine months of 2013, these five companies realized a combined $71 billion in profits. Certainly, these companies can prosper without $2.4 billion in annual special tax breaks.

The Congressional Joint Committee on Taxation estimated that three tax preferences provide $24 billion per decade in annual benefits to these five companies. The “limitation on Section 199 deduction,” designed to encourage domestic manufacturing to remain on shore, costs the Treasury $14.4 billion per decade for these five companies. The foreign tax credit deduction saves the big three domestic oil companies $7.5 billion per decade. The “intangible drilling costs” deduction saved the five companies another $2 billion, according to the Wall Street Journal.

It also seems the oil and gas industry has been the largest beneficiary of federal financial support in the entire energy sector benefitting from nearly 60 percent of all federal energy support since 1950.   Shouldn’t the lion’s share of these dollars be spent on new, alternative, renewable sources to make us less dependent on something as finite and as devastating to the environment as oil?

Big Oil will argue that these breaks are critical to job creation, but recent data from the Bureau of Labor Statistics shows oil industry employment is off 10 percent. This is not nearly as bleak as it sounds given that nearly half of the direct jobs touted by big oil are service station positions.

Simply put, it’s time to end special tax breaks for BP, Chevron, ConocoPhillips, ExxonMobil, and Shell.

Big Oil Labels Family Farmers Extremists

A true David and Goliath battle is under way between the nation’s family farmers and Big Oil in the form of the American Petroleum Institute (API). And farmers in recent weeks bounced a big rock off the head of the petroleum behemoth. At issue is American ethanol.

For months the oil industry has been involved in a well-funded campaign of both public and covert efforts to undermine the growing role of sustainable biofuel like ethanol. They capped this massive misinformation campaign by leaning on the White House and EPA to propose a change to the Renewable Fuels Standard (RFS) that would reduce ethanol use by 1.4 billion gallons this year.

The bad news is the most recent slap in the face, if successful, has the potential to hammer farmers and slappythe rural economy to the tune of more than 10 billion dollars.

Before this recommendation can be accepted EPA’s proposal must go through a formal public comment period. Thousands of corn farmers across the country have responded with a vengeance submitting comments urging the U.S. Environmental Protection Agency to retract its proposed 10 percent cut in the amount of corn ethanol in the 2014 Renewable Fuel Standard.

The volume of supportive comments coming from farmers as well as equipment dealers, bankers, school administrators and consumers who favor a fuel choice has been incredible so thanks to everyone who has taken the time to register your opinion.

The response has been so terrific that it tweaked API and in response they have launched yet another effort to remove any competition from the fuel marketplace. It takes the form of an annoying and deceptive “robo-call.”

On the pre-recorded action request API refers to those supporting ethanol as both a “special interest group” and as “extremists.” Since most those making the calls are farmers, I guess that means you. They also use the same old hackneyed and debunked arguments saying ethanol leads to higher food prices and damages car engines.

If being called an extremist makes you a little angry fight back. If having one of the world’s most prosperous industries try to increase their profits at your expense….fight back.

Corn growers: Click here to send a public comment to the EPA.

Non-farmers: Click here to customize and send a public comment to the EPA.

I wish it was a real person calling rather than some digital dweeb called Tom, because I would tell him to quit bugging hard working Americans and get back to cleaning up the their latest oil spill.

2014 Resolution: Put Environment Back in EPA

oil spillI am rapidly getting in the holiday spirit but before I get to relaxed and magnanimous I have to send one final love letter to my friends in the petroleum industry. So with thoughts of sugar plums dancing in my head here goes:

In doing my regular reading today I came across three separate stories that if looked at individually are disturbing. The first touts fracking as the main driver in a U.S. energy revolution.

“America is in the midst of a game-changing energy revolution. This potential has been unlocked by innovations in hydraulic fracturing and horizontal drilling that have made America the world’s top energy producer,” John Felmy, the American Petroleum Institute’s chief economist said. said.

No argument there but let’s drop the other shoe or pair of shoes if you will. I keep asking the same questions regarding fracking; at what cost? What are the environmental consequences of this intrusive, earth rending form of energy extraction? How long will the boom last?

More and more experts are saying enjoy our current respite of available energy because it won’t last. And now the US Coast Guard is looking into the possibility of allowing fracking waste to be barged along American rivers. Granted if they have to ship it this is likely the best way (or at least safest and most economical way), but isn’t it enough that international oil has slimed our oceans on a consistent basis for decades. Now they want to put these toxic substances on our rivers and risk our fresh water too?

Thus, the second article and issue; Every year petroleum finds itself wrapped up in a string of environmental misadventures, and many take place in remote locations and out of the glare of public scrutiny diminishing the attention but not the damage done. From pipeline spills in Arkansas to explosions in Qingdao, China petroleum is the gift that keeps on giving.

Sure they get fined, but amounts that amount to pocket change for Big Oil. On the rare occasion they really get their hand slapped, such as the with the Deep Water Horizon in the Gulf of Mexico, they put on a good show for the media and as time passes they fight in court to get those penalties reduced.

The third leg of this nauseating oil epic is the ongoing efforts by the Obama Administration (hey, it’s your Environmental Protection Agency so you better own it) proposal to hamstring the only economically viable and environmentally responsible alternative to oil….ethanol.

For 2014, the U.S. Environmental Protection Agency has proposed a 1.4 billion gallon reduction in how much corn ethanol will be required under the Renewable Fuel Standard, the federal law that helps get domestic, renewable, cleaner-burning corn ethanol blended in the nation’s fuel supply.

“It is unfortunate that the Obama administration has caved in to Big Oil rather than stand up for rural America and the environment,” said Iowa Secretary of Agriculture Bill Northey at a Protect the RFS rally on November 22, 2013. “The renewable fuels standard needs to be protected as it has helped hold down prices at the pump, created thousands of jobs in rural Iowa, and benefited the environment. The President should be focused on jobs and the economy rather than looking for ways to hurt rural America.” Read more here.

It’s still not too late to do something about this. So if you support renewable ethanol and want to put the environment back in EPA send a note. Oh, and Merry Christmas.

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