Corn Commentary

Big Oil Wants It Both Ways

Falling gas prices have dominated news coverage over recent months. From “price at the pump” reports to longer diatribes over the economic and political impacts of falling oil prices, media outlets of all genres present a wide array of viewpoints on the topic.

Not surprisingly, this puts the American Petroleum Institute in the spotlight once again as eager journalists inquire about the causes of the downswing. Not shockingly, Big Oil’s mouthpiece provides a persuasive argument for why increased domestic production pushed prices down. While this makes sense, it diametrically opposes their earlier stance on the correlation between production and price in their industry.

In late October, the Renewable Fuel Association’s Geoff Cooper first pointed out the inexplicable shift in how API views the laws of supply and demand. Simply, it somehow seems that if the increased supply comes from ethanol, and thus not the petroleum industry which it represents, it increases prices. If the increased supply comes from their Big Oil-backers, it decreases prices.

The basic laws learned by every student in an entry-level econ class only apply if they suit Big Oil’s all oil agenda. When they do not, one is to believe the basic tenets of economics reverse themselves. The laws of economics actually bend to suit API’s needs.

To read his full post, click here.

In reality, the rules do not change. Through well-funded, carefully crafted campaigns of confusion, API obfuscates the obvious – ethanol benefits American consumers by lowering the price at the pump. But, as it does not line Big Oil’s already bulging pockets, it remains an inconvenient truth that they would rather repudiate until its basis suits their own base interests.

American consumers can certainly celebrate the momentary relief falling oil prices bring, but it makes sense to remember the hard facts every day.

Ethanol lowers prices and decreases reliance upon the Big Oil’s near monopoly. Fuel choice fuels the economy in a more reliable, substantial manner than volatile market conditions ever could. Supporting domestically produced, renewable ethanol means supporting a paradigm shift toward a more stable, more affordable energy future.

Freedom Isn’t Free

While we often hear politicians declare that they know “the greatest problem of our time,” few have the courage to face what really confronts us- a finite supply of oil.

Yes, today, oil is cheap. American consumers do not currently fork out the incredible sum to which they have become accustomed. Despite the momentary reprieve, oil remains of incredible importance for not only our country but the rest of the developing world.

Drivers increasingly demand an ever-growing supply of the fossil fuel abroad. At home, demand has declined somewhat but remains high when viewed in light of less auto-dependent nations. The family car remains a symbol of both status and freedom that elicits incredible desire.

This week, the Des Moines Register ran a commentary authored by a Gulf War veteran explaining not only how our oil-dependence impacted the wars of the past but fuels the conflicts of the future. Simply, continuing to depend upon oil dooms the U.S. to a cycle of conflict in the Middle East.

“Sadly, our continued addiction to petroleum here in the U.S. and across the globe makes doing so nearly impossible, and the rise of ISIS on the profits of the oil trade should remind us all that our oil dependence is dangerous and unsustainable,” David May explains in his piece. “Thus far, elected officials have opted to use military force to protect our national security by disrupting ISIS’s ability to bring a supply to the oil market. But another option — one that every American can play a part in — is decreasing the amount of oil needed to fuel our cars, trucks and heavy machinery.”

To read the original post, click here.

The news has made the growing threat of ISIS incredibly visible to Americans. Media portrayals, whether created by ISIS itself or domestic commentators, have shown the brutal reality faced by those living under its rule.

The danger appears larger-than-life. The underlying support hides in its shadow.

May argues on behalf of the Renewable Fuel Standard. This veteran, someone with real experience and hard-gained understanding, supports fueling our nation with fuel produced in our nation. His argument deserves serious consideration.

American corn farmers proudly grow the largest feedstock for domestic fuels. At the same time, rural America also supplies a disproportionately large number of America’s troops.

While more and more articles announce the return of a cheap oil economy, consider the ramifications. Depending on a finite resource has consequences. Ethanol offers a solution.

The future can be both greener and more peaceful. It is in our national interest.

Happy Anniversary to the RFS

rfs-7Friday marks the seventh anniversary of the signing into law of the Energy Independence and Security Act of 2007 (EISA) which expanded the Renewable Fuel Standard (RFS) as we know it today.

The Renewable Fuels Association (RFA) has compiled a report that examines the successful impact of the RFS over the past seven years on the economy, job creation, agriculture, the environment, fuel prices, petroleum import dependence, and food prices.

Among its findings, the report notes that “Renewable fuel production and consumption have grown dramatically. Dependence on petroleum—particularly imports—is down significantly. Greenhouse gas emissions from the transportation sector have fallen. The value of agricultural products is up appreciably. And communities across the country have benefited from the job creation, increased tax revenue, and heightened household income that stem from the construction and operation of a biorefinery.”

Renewable Fuels Association (RFA) president and CEO Bob Dinneen remembers that day seven years ago and talks about its accomplishments so far and how EPA needs to move ahead with the law as written. Ethanol Report on RFS Anniversary

Partisan Report on RFS

bpcThe Bipartisan Policy Center (BPC) appears to be a bit partisan in a new report released this week on “Options for Reforming the Renewable Fuel Standard.”

The report was produced after several meetings during the year with an advisory group that consisted of 23 members, seven of which were oil companies representatives. Only five members of the group represented agriculture (2) or biofuels (3). The rest were a mix of academia (2), big business (4) with two of those representing Toyota, environmental groups (2), and policy organizations (3).

Both of the agriculture representatives were from the National Farmers Union (NFU), president Roger Johnson and vice president of programs Chandler Goule. “It was very important that agriculture that supports the renewable fuels industry be present at the table,” said Goule, who notes that while the meetings were held in a very professional manner, “they were heavily skewed toward big oil.”

Goule says NFU has major objections to two of the policy recommendations made in the report. “The flattening of the total renewable fuel mandate at its current level going forward, but continuing to increase the three advanced categories, we have significant concerns about what that would to do ethanol and biodiesel,” he said. “Even more concerning was removing the total renewable fuel mandate and only mandating the three advanced categories. Basically what they are doing is giving in to Big Oil’s conclusion that a blend wall exists, which it does not.”

Chandler talks more about the BPC report in this interview: Interview with Chandler Goule, NFU

New Study Disputes Indirect Land Use Models

CARD LogoA new analysis of real-world land use data by Iowa State University raises serious concerns about the accuracy of models used by regulatory agencies regarding “indirect land use changes” (ILUC) attributed to biofuels production.

The study, conducted by Prof. Bruce Babcock and Zabid Iqbal at ISU’s Center for Agricultural and Rural Development (CARD), examined actual observed global land use changes in the period spanning from 2004 to 2012 and was compared to predictions from the economic models used by the California Air Resources Board (CARB) and Environmental Protection Agency (EPA) to develop ILUC penalty factors for regulated biofuels. The report concluded that farmers around the world have responded to higher crop prices in the past decade by using available land resources more efficiently rather than expanding the amount of land brought into production.

“There hasn’t been much land use change in terms of converting non-agricultural land into crop land,” said Renewable Fuels Association (RFA) Senior Vice President Geoff Cooper of the report results. “We’ve seen more double-cropping, we’ve seen triple-cropping in some parts of the world. And, very interestingly, we’ve seen an increase in the amount of planted acres that are harvested.”

Cooper says the study, which was funded in part by RFA, comes at a time when the California ARB is in the process of re-adopting its low carbon fuel standard, which includes revisiting their land use analysis. “So this paper, we hope, should inform that debate and bring some clarity and commonsense,” said Cooper. More importantly, this new analysis can provide input to states like Oregon and Washington which are currently working on developing low carbon fuel standards.

Cooper explains more in this interview: Interview with Geoff Cooper, RFA

Meet the new NCGA CEO

ncga-novakThe new CEO of the National Corn Growers Association had his first chance to visit with members of the agricultural media during the National Association of Farm Broadcasting convention last week in Kansas City.

Chris Novak previously served as chief executive officer of the National Pork Board, but prior to that, he was executive director of the Indiana Corn Marketing Council, the Indiana Corn Growers Association and the Indiana Soybean Alliance. So he comes to NCGA with plenty of experience.

“I’ve spent 11 years working on behalf of pork farmers, but I’ve spent more than 10 years working with grain farmers, corn and soybeans, across this country,” he said. “Lots of big challenges ahead for us. Looking at a record crop and lower prices than we’d like to see but that’s an opportunity for me as well.”

Novak sees increasing demand as the most important challenge and opportunity for the industry. “How do we ensure that with a second record crop in a row that we’ve got the demand that can keep our farmers profitable?” he said. The primary demand sectors – livestock, ethanol and exports – all offer new growth potential.

“Certainly EPA’s support and implementation of the renewable fuels law as passed by Congress is going to be important to us in the short term,” he added. “Longer term we’re looking to build consumer demand for a renewable fuel that increases our energy independence and helps reduce greenhouse gases.”

Novak also talked about the proposed Waters of the U.S. rule, the extended comment period for which just ended on Friday, and what he expects from the lame duck session of Congress and the new Congress in January. Interview with Chris Novak, NCGA CEO


2014 NAFB Convention Photos

Export Exchange Tours Visit Midwest

badger-visitMany of the international teams visiting the United States last week for the 2014 Export Exchange also participated in tours before and after the event to see ethanol plants and farms across the Midwest.

Badger State Ethanol in Wisconsin had the honor of hosting a team of buyers from the Kingdoms of Saudi Arabia and Jordan. The KSA/Jordan team included companies representing the major dairy and poultry companies and major importers of feed grains in both countries and have been buyers of DDGS in the last couple of years.

exex-tour-ken-ksThe Kansas Corn Growers hosted a Latin American trade team at two Kansas farms, the BNSF container facility at Edgerton and the East Kansas Agri Energy ethanol plant at Garnett to learn about corn, ethanol and DDGS. One of the farmers they visited with was former National Corn Growers Association president Ken McCauley.

Held every other year by the U.S. Grains Council (USGC) and the Renewable Fuels Association (RFA), Export Exchange brings together more than 200 international buyers with U.S. sellers of corn, sorghum, barley, distiller’s dried grains with solubles (DDGS), corn gluten meal and corn gluten feed. Over the course of three days of events and the pre- and post-tours, these individuals not only do business directly but also make connections to facilitate future sales.

Study Shows How Big Oil Rigs the System in St. Louis

Big Oil continues to rig the system. Using its stranglehold on infrastructure, it uses pricing strategies to edge out ethanol at the detriment of consumers’ pocketbooks and the environment.

A study recently conducted by the Renewable Fuel Association in the St. Louis area highlighted this point quite clearly.

The study looked to see if anti-competitive pricing strategies were being employed to discourage E85 sales in this unique market, where the only stations offering the fuel are owned by one of the “big five” oil companies. Less than shockingly, the study found that E85 sold for one percent more than E10 on the retail market despite being priced 12 percent below E10 on the wholesale market.

To read the full study, click here.

The results show clearly how some gas companies and their franchised retailers strategically price E85 to discourage consumers from using the renewable, domestically produced biofuel. Big Oil has grown so good at what it does that, in many cases, they manage to make consumers to feel negatively toward E85 at the same time they continue to take choice out of their hands.

Does this Machiavellian plan end there? Of course not. Big Oil is better than that.

The pricing strategy they designed to ensure that affiliated refiners cannot meet the blending requirements outlined in the RFS provides them with data to undermine to use when arguing against the statute. The RFS was designed to benefit Americans. Big Oil has orchestrated an effort to ensure it fails and then, in turn, to cry out as if they are being asked to do something unreasonable.

It seems what is unreasonable is acting as good corporate citizens and in the best interest of all citizens, not creating workarounds to evade laws and continue to hold us over their barrels.

Find out what you can do to stop Big Oil from rigging the system by clicking here.

Increasing DDGS Exports

2014-export-exchangeComing up October 20-22 in Seattle is the 2014 Export Exchange sponsored by the Renewable Fuels Association and the U-S Grains Council to bring international coarse grain buyers and U.S. suppliers together, with a particular focus on the ethanol co-product distillers grains for livestock feed. More than 180 international buyers and end-users are expected to meet and build relationships with more than 300 domestic suppliers in attendance at this event held every two years.

RFA president and CEO Bob Dinneen says the Export Exchange is more important than ever right now. “We export about 25% of our distiller’s feed and in the past more than half of that has gone to China,” said Dinneen. “China is making export of distiller’s feed to that country today a bit more challenging today with their concerns about GMO.”

Expressing his opinion that China’s concerns are primarily about price and politics, Dinneen said this year’s Export Exchange will include an educational session on biotechnology, “but more importantly we’ll have buyers from more than 33 other countries” to build markets beyond China.

Registration is still open for the event and USGC Industry Relations Director Lyndsey Erb-Sharkey talks about what is planned for this year’s Export Exchange in this interview. Interview with Lyndsey Erb-Sharkey

Get Pumped!

This weekend, movie goers in select markets across the country will have a chance to find out more about America’s oil addiction and how it can be ended with cleaner, cheaper, American-made fuels as the movie PUMP hits theaters. An all-inclusive look at alternative fuels, PUMP draws consumer attention to both the problem and offers real, immediate solutions.

The documentary film aims to change attitudes about fuel forever. Narrated by Jason Bateman, PUMP tells the story of America’s addiction to oil, from its corporate conspiracy beginnings to its current monopoly today, and explains clearly how Americans can end it – and finally win real choice and competition at the pump.

To watch the PUMP trailer, click here.

The film presents the stark reality that every time consumers fill up their tank there is only one option – gasoline. Since the days of John D. Rockefeller, it has been rigged, and America has been taken for a ride.  With a stranglehold on our fuel system that is absolute, most people have no idea there are alternatives.

PUMP presents a sharply focused look at all of the domestically produced, alternative paths to a very different fuel future – where multiple fuels can be used and blended, where the oil monopoly is ended, and where our nation no longer depends on foreign oil.  PUMP concentrates on the specific pathway where ethanol, methanol, biofuels, gasoline, natural gas and electric all share the same platform at gas stations across the country, where there is choice and competition.  The solution presented is not based on unproven future technologies or wishful thinking.  PUMP presents a practical and achievable vision that could be realized in the near term – beginning now.

While the film represents many viewpoints that may not be completely in line with those advocated by groups like the National Corn Growers Association, it shines an important spotlight on the common problem all alternative fuels face. The documentary advocates for consumer choice and an end to Big Oil’s monopoly- a point which America’s farmers can certainly get behind even if they would advocate for an alternative approach.

So learn more about it. This independently-produced film has the potential to highlight an issue of vital importance to both farmers and consumers, which is certainly a step in the right direction.

Find a location playing PUMP or learn more about the movie by clicking here.



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