August 05, 2010
Editorial: Ethanol: Now is the time — for truth
Published in The Hill
Editorialists around the country are opining about tax incentives for ethanol that are expiring at the end of the year. Unfortunately, many of the articles we’re seeing don’t get the facts quite right. The New York Times, for example, asserts that the Renewable Fuel Standard mandates the U.S. production of up to 15 billion gallons of corn ethanol, which it does not. The RFS is silent on corn as a feedstock and silent on domestic production. (http://www.nytimes.com/2010/07/29/opinion/29thu3.html?_r=1&ref=editorials)
The Renewable Fuel Standard is important, but limited in scope. When Congress reconvenes in September, we at the National Corn Growers Association will continue our drive for an extension of the Volumetric Ethanol Excise Tax Credit to encourage fuel blenders to use ethanol. Those who clamor for a “level playing field” or who assert that the “free market” should decide ignore the many benefits, via subsidy and other federal government protections, offered to Big Oil that protect its monopoly on our gas tanks.
Recently, for example, a report concluded that fossil fuels received 12 times the subsidies as renewable fuels. (http://www.bloomberg.com/news/2010-07-29/fossil-fuel-subsidies-are-12-times-support-for-renewables-study-shows.html) According to the Environmental Law Institute, the U.S. government offered $72 billion in incentives for oil, gas, and coal producers between 2002 and 2008.
Even further, there is now a debate over the impact of the U.S. military protecting foreign oil interests, as both a subsidy for oil and as an environmental impact in and of itself. (http://www.environmentmagazine.org/Archives/Back%20Issues/July-August%202010/securing-foreign-oil-full.html) Where’s the editorial outcry from The New York Times about this subject?
America’s corn growers support ethanol not simply because it is an expanding market for an increasingly abundant crop. We support ethanol because we believe it is good for America’s energy security and reduces dependence on foreign oil. We support ethanol because, gallon for gallon, it is better than gasoline when it comes to greenhouse gas emissions and other environmental factors. And we support ethanol because it is an important industry for rural America and building our national economy when we can use all the help we can get.
In 2008, ethanol was attacked for driving up food prices and U.S. corn farmers were accused in editorial cartoons of starving poor African children. Now, with the perspective of history, the rest of the story is coming out. A July World Bank study provided a giant leap back from the Bank’s earlier claims. “The effect of biofuels on food prices has not been as large as originally thought,” it stated. (http://ideas.repec.org/p/wbk/wbrwps/5371.html)
The World Bank report also offers a little perspective on the idea of major land use shifts to accommodate increased biofuels production: “Biofuels account for only about 1.5 percent of the area under grains/oilseeds. This raises serious doubts about claims that biofuels account for a big shift in global demand. Even though widespread perceptions about such a shift played a big role during the recent commodity price boom, it is striking that maize prices hardly moved during the first period of increase in US ethanol production, and oilseed prices dropped when the EU increased impressively its use of biodiesel. On the other hand, prices spiked while ethanol use was slowing down in the US and biodiesel use was stabilizing in the EU.”
In the past few years, many lies and misstatements have been made about ethanol, by people who have vested interests in seeing the industry shuttered. They have perpetuated ideas long since disproven and anecdotes that are downright fallacious. They have cast our nation’s corn farmers as demons bent on starving the hungry — at the same time that others accuse us of increasing obesity rates.
Now is the time for ethanol, and now is also the time for a little more truth. We hope that a newly rested Congress will return to Washington and focus on finding ways to wean our country off foreign oil while protecting our rural economy. Preserving ethanol incentives will help do just that.
Darrin Ihnen is ...
