Corn Commentary

Economic Impact of Ethanol is Personal

A new study out from the Fuels America coalition shows that the industry supports more than 850,000 American jobs and drives $184.5 billion of economic output.

fuels-americaIt also is responsible for $46.2 billion in wages and generates $14.5 billion in tax revenue each year.

But numbers are impersonal and fail to show the real personal impact of what ethanol production has meant for rural areas. National Corn Growers Association Vice President of Public Policy Jon Doggett says farmers tell him ethanol is the reason their children have come back or decided to stay on the farm. “When I get tough farmers come up with misty eyes and say ‘that’s why this is so important because my kid came back,’” said Doggett during a press conference announcing the Fuels America report. “It gives them a way to pass that farm on to the next generation.”

Listen to Doggett’s comments here: Jon Doggett, NCGA

Listen to the full press conference here: Fuels America new economic report

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 OilRigged.com 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.

Forbes Fuzzy Math

Forbes proved that by carefully presenting numbers in a persuasively plotted manner one can confuse a reader this weekend in its story “It’s Final – Corn Ethanol Is Of No Use”. Referencing the recent United Nations Intergovernmental Panel on Climate Change Working Group reports released at the end of last month, energy writer James Conca conca-cocted a seemingly sensible argument. Unfortunately, he used slanted stats to obfuscate the truth and, with the skill of a math-magician, create an illusion instead of a solid story.

In his argument, Conca cleverly hides reality through the use of percentages. Comparing the total percent of the corn crop used to feed people and livestock in 2000 (90 percent) to the broken out figures for livestock and food and beverage feed in 2013 (45 percent and 15 percent respectively). He clearly intends to shock by using the smallest possible numbers for 2013 instead of using a more mentally honest direct comparison.

But this is only the beginning of the show. Much of the story happens off the stage.

Behind the curtain, Conca hides the hard numbers that would show his sleight of hand for what it actually is. In 2000, the United States produced only 9.9 billion bushels of corn. In 2013, U.S. farmers grew a record 13.9 billion bushels. Percentages working as they do, a larger percentage of a smaller crop can (and often does) equal a smaller percentage of a larger.

Usage for starch held steady. Sweetener, cereal and food usage rose.

Corn used for livestock feed rose too. In 2000, 5.2 billion bushels of U.S. corn went to livestock feed. In 2013, 4.3 billion bushels went directly to the livestock feed market with the equivalent of an additional 1.1 billion bushels going to feed use as distillers dried grains and corn gluten feed. That is a total of 5.4 billion bushels of corn in 2013.

Overlooking real magic, Conca fails to mention how ethanol co-product DDGs help maximize the potential of each kernel of corn by creating both feed and fuel from it.

While he puts on a complicated, carefully choreographed performance, Conca’s performance falls flat as a piece of unbiased journalism. Instead of shining the spotlight on the real fallacies, he follows the other righteously indignant frauds into a fog of reactionary rhetoric that obscures the bright role biofuels play in building an honestly better future.

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!

 

 

 

Corn Farmers March for Biofuels in the Beltway

ace14-dc-alversonThere were over 25 battalions of ethanol troops on Capitol Hill last week as part of the American Coalition for Ethanol (ACE) sixth annual Biofuels Beltway March

ACE president Ron Alverson, a South Dakota farmer and board member for Dakota Ethanol, says the teams had appointments with the offices of more than 130 senators and representatives, and he thought they were well received, even in enemy territory. “We went into what we thought were going to be some pretty hard places – representatives from Alabama, Pennsylvania, Rhode Island,” he said. “They were very cordial and they listened well … we were really pleased.”

Their main weapon against ethanol foes was good information to defend against some of the more popular arguments against ethanol, such as food versus fuel and engine issues with higher blends. “We’ve got some really good arguments and good data…all we can do is go out and tell our story,” said Alverson.Interview with Ron Alverson, ACE president

ace14-dc-corn-teamOver 80 people turned out for the ACE event this year, the most ever, and the diverse group included ethanol producers, retailers, bankers, truckers, cattle ranchers, students – and a whole bunch of corn farmers. The team here consisted of (LtoR) Missouri farmer Gary Porter, Missouri Corn Growers public policy director Shane Kinne, and Minnesota farmers on the board of Chippewa Valley Ethanol Dale Tolifson and Dave Thompson.

I caught up with them as they were heading out of the Capitol after making their rounds and asked them each to give a brief impression of their visits. Interview with Biofuels March team


2014 ACE Biofuels Beltway March photo album

The Future’s so Bright…

classic14-martin-shadesMartin’s got to wear shades.

That was National Corn Growers Association president Martin Barbre looking like a rock star at the final Corn Congress session of Commodity Classic. Not by choice, he actually broke his regular glasses the night before and had to wear his prescription shades to read.

But, Martin really does think the future is bright for corn farmers and agriculture in general, especially now that we finally have a finished farm bill and NCGA has reached a new membership record of 40,287 as of the end of February.

Two initiatives Martin is especially excited about right now are the Coalition for Safe Affordable Food (CFSAF) and the Soil Health Partnership.

“There’s no doubt that GMOs have become a hot button issue in recent years,” he said of the CFSAF, which advocates a federal solution that would establish standards for the safety and labeling of food and beverage products made with genetically modified ingredients. “We’re just getting the coalition together and getting a game plan together and when we do we’ll start moving forward.”

The Soil Health Partnership has the support of Monsanto and the Walton Family Foundation and relies on a science advisory council made up of government and university experts as well as environmental groups. “These are just examples of the coalitions we’ve been able to work on.”

Martin is even optimistic about the number one policy issue facing NCGA this year – protecting the Renewable Fuel Standard (RFS). “We’re proud of the grassroots action we saw on the part of our nation’s corn farmers” to get thousands of comments in to the EPA on the proposal and thousands of calls to the White House. “We don’t know when the decision will come down or what it will be but we know we’ve done our part and we’ll continue to keep pressure on the administration.”

Martin talked about these issues and others in the following audio segments:

Interview with Martin Barbre, NCGA president
NCGA president on the Classic stage
NCGA Press Conference with Martin Barbre


2014 Commodity Classic Photos

CARB Serves Up Murky Alphabet Soup

soupThe iLUC analysis by CARB for the LCFS was based, in part, on EWG recommendations and included GTAP, AEZ-EF, and GREET models, input from EPA and USDA, consideration of RFS2, and also looked at contribution of DDGS and significance of YPE.

Watching a webcast of a California Air Resources Board (CARB) workshop this past week detailing preliminary staff results on Indirect Land Use Change (iLUC) models and analysis for the state’s Low Carbon Fuel Standard (LCFS) was sometimes like reading teen text messages. OMG, like, I was LOL and SMH at these PPL wondering WTH?

carb-14-2The 84 slide presentation of details on how CARB arrived at the values they are now proposing for corn ethanol, sugarcane ethanol, soy biodiesel, canola biodiesel and sorghum ethanol was interspersed with dozens of questions from stakeholders and scientists present or listening in on the webcast. An overriding theme of the entire four hours was “uncertainty” – which pretty well sums up the whole concept of indirect land use change. Nearly a quarter of the presentation was devoted to “Evaluation of Uncertainty” and “Why Results Vary Between Studies.” Many times points were made that there is no scientific consensus on certain values, or that some variables may not be taken into account.

I thought it was interesting and had to wonder why they decided to represent indirect Land Use Change with a little i for indirect. Maybe it’s supposed to be like iPhone or iPad. But there was even uncertainty on how to pronounce it as a word by those at the workshop – i-Luck, i-Look or i-Luke.

CARB is asking for feedback on the preliminary presentation by the end of March and plans to schedule one or two additional workshops in the coming months before completing an Independent Academic Review and presenting final report to the board in the fall. “Thank you for attending the LCFS opening ceremonies,” said CARB Transportation Fuels Branch Chief Michael Waugh at the conclusion of the workshop.

It would be funny if what CARB ultimately decides about iLUC would not have such an important impact on the use of corn ethanol in the state that uses the most motor fuel nationwide. I’m no scientist, but in IMHO, it’s just NAGI.

Missouri to Make States with E15 Availability a Baker’s Dozen within Months

This summer, Missouri drivers could be saving money as E15 provides a new option at gas pumps across the state. This action, which would ease the pain of rising gas prices and bring money back to rural America, now awaits publication by the Missouri Department of Agriculture of the proposed rule which would provide Missouri drivers with this environmentally, economically sensible option. If the Department of Ag acts quickly, E15 could become a reality for drivers by May 30.

In a recent article by the Kansas City Star, Missouri Governor Jay Nixon, who championed the rule spoke in support of allowing Missouri drivers choices that have been approved by the U.S. Environmental Protection Agency for cars built in model year 2001 or later.

“Expanding the use of renewable fuels like E15 is a proven strategy for boosting our nation’s energy independence and bringing more dollars back to farming communities across Missouri,” Nixon said.

In addition to Nixon’s support, the Missouri Corn Growers Association has worked tirelessly to expand ethanol use in the state. MCGA’s educational efforts and ongoing support of E15 may provide a fuel option several cents a gallon cheaper than current fuel blends, resulting in an economic boon for drivers and for the many communities across the state dependent upon agriculture.

Following in the footsteps of a dozen other states, Missouri will join the movement toward increased biofuel availability. Drivers will have a choice. Pump E15 and thus pump money back into America. They can race into a future on biofuels that will help keep our air clean and our energy supply safe. Or, if they want, they can pump money back into big oil’s bloated bank accounts. Either way, at least they will have a choice.

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.



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