Well, what many predicted has come true, subsidies for ethanol aren’t actually going away:
Ethanol advocates Sens. John Thune (R-S.D.) and Amy Klobuchar (D-Minn.), meanwhile, won multi-year extensions of tax credits for producing “cellulosic” ethanol — which isn’t made from corn — and installing ethanol blender pumps at gas stations.
The deal will steer $1.33 billion — two-thirds of the savings from ending the blenders’ subsidy — into deficit reduction, while the balance of $668 million would support the other incentives, according to the lawmakers.
Any rational proposal for the future of ethanol should aggravate industry trade groups, and they’re predictably cheer-leading about how they’re being fiscally responsible, fueling our freedom, and all that other nonsense. It seems as if they saw the light at the end of the tunnel was fading fast, and they hopped on a train that would funnel a remaining 600 million into the industry. [click to continue…]
In announcing his intention to seek the GOP nomination in 2012, Tim Pawlenty visited Iowa yesterday to deliver so-called “hard truths” to the American people. Given that he was in Iowa, Pawlenty’s stance on ethanol is the perpetual elephant in the room. Most non-Iowan fiscal conservatives seemed happy with Pawlenty’s comments, though its not clear why. The WSJ, today, wrote a short op-ed praising the Pawlenty for his unprecedented, “amazing” steps in Iowa:
One of the immutable laws of modern American politics is that no candidate who wants to win the Iowa Presidential caucuses can afford to oppose subsidies for ethanol. So it’s notable—make that downright amazing—that former Minnesota Governor Tim Pawlenty launched his campaign for the Republican Presidential nomination Monday by including a challenge to King Corn.
I suppose its worth praising him for making a slight improvement to the Obama/Bush/Gingrich/*insert politician* doctrine, but it ends with slight. The “don’t pull the rug out from under them,” slowly-end the subsidy approach isn’t a real stance, and its not an end to the subsidies. [click to continue…]
In an appearance on E&E TV, retired General Wesley Clark discusses the future of corn ethanol policy. Transcript here. Given that he is a member of Growth Energy, completely objectivity isn’t expected. However, he makes a number of incorrect statements and supports very poor economic analysis.
CLARK: And so we’re behind in cellulosic because we’ve been artificially constrained in the fuels market, first by the EPA blend wall at 10 percent, which meant there was no market for cellulosic. And then secondly then by the lack of infrastructure to be able to actually go out to the service agent and say, hey, I want to try 20 to 30 percent ethanol blend.
Cellulosic ethanol production is “behind” because its not economical, and investors are aware that the current market for cellulosic ethanol relies almost entirely on a government law that clearly isn’t guaranteed given how difficult it is to produce cellulosic ethanol at a price that is even close to something consumers would want.
Clark also complains about the 10% “blend wall” yet doesn’t acknowledge that the majority of ethanol sold is due to an “artificial” government mandate. I’d gladly end the EPA’s ability to determine what American’s can put in their gas tanks just as I’d gladly end the mandate requiring refiners to blend petroleum with ethanol.
[click to continue…]
From The Center for Public Integrity:
According to IRS records, the ethanol group Growth Energy paid Gingrich’s consulting firm $312,500 in 2009.The former House Speaker was the organization’s top-paid consultant, according to the records. His pay was one of the group’s largest single expenditures, as it took in and spent about $11 million to promote ethanol and to lobby for federal incentives for its use.
In a Growth Energy publication, Gingrich was listed as a consultant who offered advice on “strategy and communication issues” and who “will speak positively on ethanol related topics to media.”
Chris Thorne, a Growth Energy spokesman, said Gingrich was not hired again in 2010. The group was organized by ethanol producers from the Midwest in late 2008, Thorne said. Its members sought Gingrich’s counsel when it started because “they were people who were never involved in DC politics before, and they were looking for someone who knew how to get things done.” The organization’s IRS report for 2010 is not yet available.
First, the idea that Growth Energy doesn’t have anyone who is familiar with DC politics is laughable. The CEO of Growth Energy is Tom Buis, formerly the President of the American National Farmer’s Union, and named one of D.C.’s top 50 lobbyists. They also employ (or have employed) General Wesley Clark and Jim Nussle.
Do recall Newt Gingrich’s scuffle with the WSJ earlier this year, where in a letter to the editor Gingrich wrote:
Second, I am not a lobbyist for ethanol, not for anyone. My support of increased domestic energy production of all forms, including biofuels and domestic drilling, is born out of our urgent national security and economic needs.
Turns out that wasn’t true. CEI has previously written about Gingrich’s shameless ethanol pandering here and here.
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