So why does the ethanol industry think it needs to continue receiving tax incentives? There are the general answers such as to allow a relatively new industry to compete; to give a domestic fuel source a leg up, to compete against the most highly subsidized industry in history…Big Oil.
Those are all kind of trite and simplistic. Bob Dinneen, CEO of the Renewable Fuels Association provides a much more in depth response to that question in a recent interview with Washington DC-based Energy and Environment television.
“In the absence of the tax incentive discretionary blending evaporates. With more than 2 billion Renewable Identification Numbers (RINs) through the RFS program that are out on the marketplace, they would quickly be bought up by refiners. So there’s no question that in the absence of the tax incentive demand for ethanol will fall.”
“And if that happens, there’s no question that plants, some plants would shut down. Now, will it be as dramatic or as devastating as the failure of Congress to extend the biodiesel tax credit? No, because we do have a stronger underpinning of regulatory support. The RFS is there and there will be ethanol that will continue to be blended. But suddenly the RFS is going to be a cap, not a floor.”
So what is a RIN? It is really a tradable commodity. Every gallon of renewable fuel in the U.S. has a unique serial number assigned to it. This unique 38-digit serial number (a RIN) is what makes the program work and allows EPA to monitor progress and make certain that all parties are playing by the rules. It also allows marketers flexibility to sell the RFS prescribed amount of ethanol in the markets that make the most sense in terms of demand and logistics.
Why should we as consumers care? At a very fundamental level that I can relate to without being an expert if we lose the ethanol tax incentive (VEETC) we become more dependent on foreign oil.
“All the growth opportunities for ethanol aren’t going to be there. So we are very committed to making sure the industry is able to continue to grow and evolve these marketplaces that are opening up. And that’s why extending the tax incentive needs to occur,” Dineen says. “Now, do you want to look at ways to reform it? Absolutely and we’re working with the administration, we’re working with our allies on Capitol Hill, we’re working with other stakeholders to try to determine how you can address the future of the tax policy in a responsible fashion, in a way that provides some confidence that the markets will continue to be there, that will allow the continued evolution of the industry into newer technologies, different feedstocks, all the rest.”
“That’s a healthy conversation to have. You can’t have that in the week or two that you’re going to have in a lame duck session. So they can extend this tax incentive with, you know, a stroke of the pen, a little bit of Whiteout, just change the date. That’s what they need to do this year and let’s have a robust discussion about future biofuels tax policy and make sure we’re thinking about it in terms of what’s the best policy to promote cellulosic ethanol? How do we commercialize other advanced biofuels? How do we make sure that E85 and other fuel uses for ethanol as a replacement fuel are there? And that’s just going to be a much broader conversation.”
Hopefully, some day soon such incentives won’t be part of the public dialogue. If a realistic attempt is made to eliminate the millions of dollars in petroleum subsidies and level the playing field, other energy players will follow.
For many of you the harvest season is over, but the process of cleaning and repairing your equipment and prepping fields for spring planting is just beginning. Here’s hoping that in this busiest of seasons you won’t forget to vote in the Nov. 2, 2010 election.
Many local and state races are expected to be very close which means your vote has weight, it has meaning and it is likely worth the drive to town. People are disgruntled as we approach these Mid-Term elections which means two things will happen…many of the dissatisfied will stay at home and say “why bother “ and the zealots on both ends of the spectrum will camp out waiting in line to make sure their votes gets counted.
This means it is more important than ever to vote. This presents an opportunity for the majority of the population of American society who live somewhere in between those extremes. It presents an opportunity for agriculture.
Farmers constitute less than 2 percent of the population but history shows you also have a remarkably high voter turn-out, so let’s keep that record intact. Your vote doesn’t count? I read a blog today that reminded me that the closely contested 2000 Presidential election five states were decided by less than one percentage point.
Our dependence on foreign oil has a cost. It is an enormous cost and the drain on our nation’s economy creates all kinds of issues for our society that nobody wants to talk about. And the oil companies least of all.
Big oil spends millions annually attempting to give alternative sources of energy a black eye, while some few in that industry see benefits and are investing in things like ethanol production. But most are avoiding engaging in a real dialogue regarding consumer’s future fuel needs, growing environmental concerns, and our national security.
It’s not really a stretch to find a motivation considering the enormous profits these multi-national oil giants have squeezed from Americans as a result of their absolute control of the market. Former CIA Director R. James Woolsey has been a big ethanol supporter for one primary reason - it diverts dollars to US energy producers otherwise being sent to the Middle East for imported oil.
He says $3-4 billion of the $160 billion we send the Saudi’s every year ends up with the “bad guys.” We subsidize our enemies with every barrel of oil that we import.
We now appear to be days away from an announcement by the Environmental Protection Agency regarding the approval of up to E15 (15% ethanol mixed with gasoline) in our cars. The blend has been thoroughly tested for motor vehicles yet the anti ethanol forces such as big oil and some curious minions like the Grocery Manufacturers Association (the cheap corn fan club) are asking people to write President Obama asking him to stop impending EPA approval of E15.
Groups such as FollowtheScience and Energy Citizens are really nothing but fronts for organizations like National Petrochemical & Refiners Association and the American Petroleum Institute.
Large numbers of Americans strongly supports the EPA’s approval of E-15 for motor vehicles mainly based on their positive experiences with E10. EPA has the information it needs to act. So if you want to counteract the naysayers email the president and tell him “yes, for tested and proven E15.” Or call the White House at 202-456-1414.
U.S. ethanol production currently eliminates the need for 98.6% of Venezuelan crude oil imports, or 95.7% of crude oil imports from Saudi Arabia. It is representative of 55.6% of total Persian Gulf crude oil imports. I’d say the ethanol industry has provided a good start to negating the National Security risks associated with our dependence on foreign oil.
Comedian Stephen Colbert, host of “The Colbert Report,” is “testifying” Friday morning before the House Judiciary Committee’s Subcommittee on Immigration, Citizenship, Refugees, Border Security, and International law at the hearing entitled “Protecting America’s Harvest.” The witness list for the hearing features Colbert batting clean up after testimony from United Farm Workers President Arturo S. Rodriguez, Virginia apple grower Phil Glaize and Vanderbilt University professor Carol Swain.
Apparently, Colbert is an immigrant farm worker expert now, after spending a day in August working at a corn and vegetable farm in New York state. We’re talking sweet corn here, not field corn. Colbert teased part of the segment on his show last night where he also did his usual goofy interview with Rep. Zoe Lofgren (D-CA) where she played straight man to Colbert’s off-the-wall comments. The California congresswoman just happens to be chairman of the subcommittee holding tomorrow morning’s hearing.
Colbert became involved in the immigration issue this summer when the UFW launched a “Take Our Jobs” campaign in an effort to prove that Americans will not do farm work so we have to hiring migrant workers. The comedian decided to try out the job for himself, so that is what makes him an expert to testify before Congress about the importance of migrant workers for American agriculture.
There is no question that migrant labor is important to American agriculture and any attempt at immigration reform needs to keep that in mind. It’s definitely a serious issue and maybe people will pay more attention to it with a little comic relief.
“Deepening pain and unrest in Cuba are provoking bold actions that the U.S. government should note,” according to an editorial in the St. Louis Post Dispatch today. After decades of economic stagnation even Fidel Castro recently noted “the Cuban model doesn’t work anymore.”
What spurred Castro’s comment and the editorial is the dramatic change taking place 90 miles from our shore. After decades of economic erosion the worldwide recession is ravaging Cuba, an island nation of 11 million people who largely are dependent on imported food and many other products.
As the editorial points out the Cuban economy has been faltering since the since the Soviet Axis collapsed in 1991 and withdrew its economic support that had become so ingrained in Cuban politics and culture. Cuba lacks a modern manufacturing infrastructure today but what they do seem to have is a growing awareness that they will need to seek foreign investment and outside sources of private capital if they are to bounce back.
The Post rightfully points out the ripe opportunity that presents itself to improve our relationships with one our nearest neighbors. After 58 years of nothing but acid-based rhetoric being the only commodity traversing the Carribean Sea, it is time to regroup and reconsider our relationship with Cuba.
Politics come in many shades and flavors but human nature is not so different. Many Cubans struggle to get enough to eat, so like new neighbors (or at least reformed one’s) let’s reach out with the hand of friendship.
It might produce some positive results, especially if that hand contains the aforementioned food they need. We have the opportunity and the means but do we have the will to do what is right?
My brother-in-law recently asked me why ethanol had a great reputation for two decades and suddenly seems to be getting pounded constantly, especially in editorial/opinion pages by the media.
He doesn’t have a farming background and isn’t invested in the ethanol industry so he is a neutral and somewhat uninformed observer. He is also one of the busiest guys I know so for him to notice it means the anti-ethanol crowd are now officially pervasive. Apparently, it’s not just me feeling paranoid.
The conversation came back to me in a hurry this week with the latest “ethanol is evil” Tsunami rolling across the country once again. It started with the Wall Street Journal (No link here because you have to pay for this tripe) and the Washington Post and worked its way across the country hitting the Chicago Tribune and Des Moines Register yesterday and likely making its way for the West Coast like some cheap traveling circus.
And like the aforementioned Circus the anti-ethanol gang leave a trail behind much like Barnum and Bailey’s elephants only there is no guy with a shovel and bucket cleaning up in their wake. They leave their load of “misinformation” to fester in the road in full knowledge that most people are also too busy to check the veracity of their propaganda.
The public lynching of ethanol began with the bogus food vs. fuel charade in 2008 and since then has continued to resurface over and over again in several different guises that get trotted out and recycled whenever opportunity presents itself.
Several things remain consistent as the attacks continue. The noxious cocktail they serve up is made with equal parts of the best bad science money can buy and poor logic. And the olive on the toothpick seems to be just plain old avarice.
That’s greed, materialism, or covetousness with a Capital “C.” The people fanning the fires of these attacks have rationale and motivation that are simple if not transparent. They are the folks that want the cheapest corn possible because it boosts their profits; want ethanol to be made from another source; or want ethanol crippled forever because the market share just got too big.
So, for the next couple of days come back here and you will get a sneak peak each day of some of these players and the Machiavellian games they play and fund all to snuff out the only real competition that imported petroleum faces in the marketplace today…ethanol.
Corn growers are in Washington, DC taking care of business. It’s the semi-annual Corn Congress.
Corn farmers from across the country will gather in Washington the week of July 12 for a series of team and committee meetings, Capitol Hill visits with lawmakers and the semi-annual Corn Congress, where grower-leaders from 28 states will elect four new members of the National Corn Growers Association Corn Board. You can hear NCGA President Darrin Ihnen talk about it:
One of the activities that took place today was the presentation of the President’s Award.
National Corn Growers Association President Darrin Ihnen today presented the President’s Award to Senator John Thune (R-S.D.) during NCGA’s Corn Congress events in Washington, D.C. The President’s Award is given annually to a leader who has worked to advance issues important to corn growers and agriculture.
This past weekend the family and I drove about 1200 miles, leaving the St. Louis area to visit family in Lake Zurich, Ill., and then driving down to Ft. Campbell in Kentucky to drop our son off at his barracks. Then back home. About 1200 miles in all, the vast majority in Illinois, where the corn was growing tall and straight, for the most part. Illinois saw the highest increase in planted acres, according to the USDA, up from 12 million acres in 2009 to 12.6 million acres in 2010. Great news for our hard-working Illinois corn growers!
I also saw a lot of cars with Flex-Fuel logos on the back, and wished we had the same with our 2006 Toyota Sienna. But that was not an option.
This past weekend, Robert Zubrin wrote a great piece in the Washington Times calling for open fuel standards. The idea is to get more cars on the road that can handle a variety of fuels, whether it foreign-oil-based gasoline, domestic-and-renewable corn ethanol, or even methanol. This would add about a hundred bucks to the price of the car and give us more energy independence, which means more energy security.
As Zubrin puts it:
“We are not addicted to oil. Our cars are addicted to oil. They are like a tribe of people who, because of some unfortunate flaw, can only eat one kind of food, say herring. Thus, if the herring merchants combine to rig up the price of their product to $100 per pound, the tribesmen have no choice but to submit. They would be far better off if they could become omnivores, capable of eating steak, ice cream, corn, eggs, apples, etc., as the power to use such alternatives would make them immune from herring-cartel extortion.”
It’s time to see more energy freedom on the roads — not just in the Corn Belt, but across the Land of the Free.
Photo: Zubrin autographs his book “Energy Victory” at the 2009 Commodity Classic.
If you are a row crop farmer who hasn’t raised livestock in years you might wonder how much energy and personal capitol you want to expend educating people about the anti-livestock efforts of the Humane Society of the United States. Besides the obvious large feed consumption, recent developments should have you even more concerned.
Regular readers of this blog realize giving donations to your local animal shelters is a good thing. They actually help animals, unlike the loosely related Humane Society of the United States that gives nearly nothing to support these efforts. Instead, HSUS chooses to use its significant and questionably acquired resources to pursue an animal rights agenda and vegan lifestyle.
HSUS is systematically going from state to state trying to enforce their minority agenda by passing laws that would radically change safe, proven and productive livestock rearing practices. And they are leveraging their positive reputation – yes they have one because people think they are saving puppies – to tell farmers and ranchers how to do their job.
Their most recent effort in Ohio seemed to have ended well when voters showed them the door and told the carpetbaggers to go home. Ohio chose to form their own state board of experts to review, monitor and police livestock production practices.
This is where your radar should go up and the red lights should start flashing. HSUS is now trying to get an initiative on the November ballot that would force the state’s new Livestock Care Standards Board to mimic the policies that HSUS got passed with its last ballot measure, in California.
This means groups like HSUS can now bring in paid, if not professional, employees to work the streets and gather the needed signatures to tell Ohio how to run their state. Given their past use of disingenuous images and information to acheive their goal, this does not bode well.
Personally, I am concerned other groups are watching the twisted success of HSUS and contemplating how this strategy might be applied to other issues and governing practices touching your profession and your day-to-day life. Precedence, even bad precedence, carries weight.
The good news is Ohio agriculture is working hard to assure a good outcome. In the interim, do your part by learning more about the real HSUS and tell your friends.
If you haven’t already tuned into the new level of activism in agriculture, especially regarding misinformation on our largest industry, then you won’t find better evidence of this evolving cultural phenomenon than the Corn Farmers Coalition.
Speaking to a couple of family farmers recently they expressed their frustration at the misinformation, innuendo and outright fabrications that are being used to frame their chosen profession. As upset as they were, there was also a prevalent sense that there was nothing they could do to change things.
If you are frustrated and tired of all the attacks and negative news swirling around agriculture you have come to the right place. Read slowly, soak this up, and then if you are a corn farmer give yourself a big pat on the back.
Imagine 60,000 city people getting a positive message about farmers every day. As they go to and from work, go out for dinner, go to a movie, or just go about their life in general. Next imagine that most of these people are employed in jobs on or near Capitol Hill in Washington, DC…Congressmen, staffers, agency employees, lobbyists, environmental groups, and even media. That’s what is happening right now as you read this thanks to the efforts of farmers themselves.
In the attached photo of the Union Station Metro stop in Washington, DC you can see several of the ads that will be prevalent throughout June and July as part of CFC’s efforts. From the highly trafficked Metro system, to Reagan National Airport, to the most widely read political publications like Politico and Congressional Quarterly. Throw in on-line advertising at the aforementioned publications, WashingtonPost.com, National Public Radio, ads in the Washington Nationals baseball team programs, and a smattering of talk, sports, and contemporary radio and you begin to get a feel for the breadth and scope of this campaign. It is conservatively estimated the educational campaign will create more than 10 million positive impressions in the land of policy and regulation.
Equally as impressive is that CFC, and the $1 million in corn checkoff funds backing the campaign, comes straight from family farmers in Maryland, Virginia, Ohio, Kentucky, Indiana, Illinois, Missouri, Iowa, Wisconsin, South Dakota, Nebraska, Colorado, Kansas and Michigan who believe we need to introduce a foundation of facts to the dialogue in Washington.
Ten messages based on USDA and EPA facts will be used in the campaign to show tech-savvy, innovative farmers are growing more corn every year - for food, animal feed, ethanol and exports - while using fewer resources and protecting the environment.
The coalition will meet with media, members of Congress, environmental groups and others to talk about what’s ahead: how U.S. farmers, using the latest technologies, will continue to expand yields and how this productivity can be a bright spot in an otherwise struggling economy.
We have a great story to tell so take heart. You can make a difference and CFC offers clear evidence.