Corn Commentary

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.

Big Win for Big Oil?

Washington-insider newspaper, The Hill, published its top ten list of lobbying victories in 2013 today and, in doing so, dealt a death blow to arguments that the Environmental Protection Agency’s proposal to lower the volume of ethanol required under the Renewable Fuel Standard in 2014 is based in a sound argument. Giving the number five slot to the American Petroleum Institute, the Grocery Manufacturers Association, the Association for Convenience and Fuel Retailing, and the American Fuel and Petrochemical Manufacturers, the paper chalked up the decision as a big win for big oil’s powerful lobby.

“The oil and gas industry, with a little help from food producers, won a victory over the ethanol mandate in 2013.

“Breaking with precedent, the Environmental Protection Agency for the first time declined to increase the amount of ethanol and other biofuels that must be mixed into gasoline.

“The EPA is now proposing to lower the mandate, beginning what ethanol opponents hope will be a steady retreat away from the fuel requirements in the years ahead.”

The EPA, a government agency presumably tasked with basing decisions in sound science with consideration given to economic implications, should be better than this. Depriving American consumers of renewable, sustainable biofuels in the service of Big Oil does not make environmental or economic sense. This politically-motivated policy does not meet the high standard the American people should set for such a powerful agency.

Let the EPA know that its proposed rule will be scrutinized outside of the Beltway, where the tax revenue that supports DC salaries is actually generated. Learn more about NCGA’s Don’t Gut the RFS campaign by clicking here.

Oil Survey Shows Ethanol Is Clearly A Target

What was the second biggest policy story of the year in eyes of the petroleum industry? According to a recent membership survey by the American Petroleum Institute reconsidering biofuel (ethanol) blending. What was the second biggest transportation, storage and refining story of the year? The battle over biofuels blending. And what was listed 2nd on oil’s list of things they most want to see happen in 2014? Yep, reduction in EPA blending requirements.

Most of the public are too focused on their jobs, raising families and just paying the bills to have a deep understanding of the growing role of biofuels and renewable ethanol in our nation. However, years of education by supporters of the domestic fuel have generated a basic awareness of ethanol’s benefits such as job creation, reducing greenhouse gas, and providing a fuel choice that makes us less reliant on imported petroleum.

Because of this hard fought and well deserved perception that ethanol is good, many of my friends have been asking me lately what the heck is going on with the rash of negative information related to ethanol. How did proven ethanol suddenly become a bad idea over night? Most recently, the Environmental Protection Agency’s proposal to reduce the amount of ethanol to be blended in our fuel supply has been getting a lot of media attention.

Put simply, the oil industry has always been ok with ethanol as long as the market share didn’t get too large. In fact they need a certain amount of ethanol because it allows them to provide a high octane product at less cost…meaning more margin for them. Without ethanol they would be forced to do more extensive and costly refining in order to produce a product that won’t leave your car sputtering curbside.

But in today’s market things have changed. Increasing domestic oil production, more fuel efficient vehicles and a soft economy have shrunk the volume of fuel needed. Thus big oil finds themselves looking at the bigger market slice on ethanol’s plate and thinks “hey we want some of that back.”

The unspoken part of the previous statement is “and yes we will pay nicely to get it.” And they have done so in recent years. Their most recent onslaught has been sustained by millions of dollars of lobbying, advertising and poor pseudo-journalism.

You might be inclined to think the family farmers and independent businessmen that make up the ethanol industry are just paranoid but given the aforementioned high priority petroleum has placed on this issue, “it ain’t paranoia if they’re really out to get ya.”

 

More to Gasoline Than Meets the Eye

Ethanol isn’t poison and gasoline is. There….I have said it. It boggles my mind how much of the public buys into the oil industry propaganda related to ethanol, most notably some of the environmental community. Why someone who considers themselves an environmentalist would listen to big oil on energy topics and what is best for consumers leaves me perplexed. Even on a good day when gasoline isn’t $3 to $4 a gallon, it remains a really bad idea when it comes to our health and the environment.

Ethanol is ethanol. There are no additives and it is the same product chemically that some drink in the form of martinis and other cocktails. Drink ethanol and  you just think you are better looking and funnier. Drink gasoline and you get dead. Gasoline has terrible environmental risk and repercussions and they are getting worse as we find new ways to dig, steam, and frack to get it out of the ground and the ocean bottom.

However, that is just the beginning of making commercial gasoline. Gasoline starts out as poison and it only gets better as dozens of chemicals can get mixed into the product. They get mixed in to make gas burn better during different seasons, to add octane, and even as a way for the oil industry to charge you for some byproducts of gasoline manufacturing that they otherwise would have to dispose of as toxic waste.

To this day one of my favorite news cartoons of all time showed thewhats in gas Exxon Valdez oil spill with petroleum covered wildlife effected by the disaster. The next panel showed an ethanol spill and featured google-eyed sea otters, dolphin and fish who apparently had been to happy hour.

I am a typical blogger. I have lots of opinions and I like words. But in this case I think I will show good judgement and just shut up and let the accompanying image tell the rest of the story. Take my word for it that many of these chemicals are even worse for your personal health and our future than they sound.

EPA Head Visits Iowa

mccarty-head-shotThe newly confirmed head of the Environmental Protection Agency visited the Iowa State Fair last week, where she spoke about her goal of building a better relationship with farmers.

“My commitment to you is that at the end of my term, we will have a stronger, more productive, more trusting relationship between EPA and the agriculture community,” said EPA Administrator Gina McCarthy during her brief remarks.

In an interview with USDA Radio from Iowa, McCarthy also had some encouraging words about renewable fuels. “We’re at a pretty exciting time,” she said. “We are seeing a lot of activity, especially here in Iowa where they have advanced ethanol plants. We’re working closely with the farming community and we’re looking at new feedstocks all the time, new ways of producing biofuels.”

In addition, McCarthy offered her views in support of the RFS. “We see that the Renewable Fuel Standard is operating effectively, that the law gives us plenty of tools and flexibility that we can move this forward,” she said.

McCarthy was just confirmed as the administrator of EPA last month. Listen to her comments about farmers, working with USDA, and renewable fuels here: EPA Administrator Gina McCarthy

What Is in a Name? For Renewable Biofuels, Quite a Bit

It may be trite to define a commonly used term as a lead in to a larger story, but it seems a Texas lawmaker has completely forgotten what the word “renewable” means.

U.S. Representative Pete Oleson (R-TX) wants to rewrite what qualifies as a biofuel under the Renewable Fuel Standard to include ethanol made from natural gas. Maybe Rep. Oleson was confused by the word natural or maybe his support for the state’s oil industry blinds him, but natural gas, a coproduct formed with petroleum, does not qualify because, intrinsically, it is not renewable.

Congress created the RFS to reduce our nation’s dependence on fossil fuels. While they certainly did so to cut pollution, they also wanted to shift our nation’s energy future away from an addiction to a finite resource. As an oil coproduct, natural gas also qualifies as a fossil fuel. The supply of natural gas however, while more abundant than the oil supply, still is finite.

The oil industry’s stranglehold on America’s energy supply should not be tightened by redefining the word renewable. It shouldn’t be tightened at all.

Common sense prevailed when lawmakers crafted the RFS. They had the foresight and wherewithal to create a way to break free from fossil fuels. They created a way to build the greener, more sustainable energy future that renewable biofuels can provide. Today’s lawmakers should exercise the same integrity and deny big oil a backdoor win.

Redefining renewable biofuels will not magically make oil wells that never run dry. A renewable future needs a renewable feedstock. It needs corn.

Before You Criticize, Take a Look at Your Own Backyard

In recent conversations about the environment, some fingers have been pointed toward corn farmers. The finger pointers wrongly allege that growing corn emits massive amounts of carbon dioxide into the atmosphere.

If you want to see an enviro-villain responsible for a far greater percentage of our nation’s COemissions, just look out your front door.

Residential lawns actually emit more CO2 than corn fields according to a study recently published in the Soil Science Society of America Journal. As more exurbs push city boundaries further and residential developments move land out of agricultural production, the effect can even intensify according to David Bowne, an assistant professor of biology at Elizabethtown College in Pennsylvania who led the study.

Everyone needs a place to call home. Everyone needs nutritious, healthy foods. Instead of pointing a finger at a farmer because, as such a small subset of the population, very few outside of agriculture personally know about and have experienced our nation’s incredible farming and ranching tradition.

Farmers work hard to act as good stewards of the land, air and water upon which they depend for their livelihood. The original environmentalists, farmers want to work with their counterparts from all parts of the country to ensure that their children will be able to continue farming the land that their grandparents once did.

All fruitful efforts start when we extend an open hand instead of wagging a finger. So take a moment to look at the facts. We have all contributed to the problem. Now, we all must be part of the solution.



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