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Economy, Regs, & Taxes

Does the Ethanol Mandate Include Singing Its Praises?

GOP White House hopefuls predictably pander in Iowa.

Lewis Morris · Mar. 10, 2015
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A number of potential Republican presidential candidates descended on the Iowa Ag Summit this past weekend to shore up their bona fides with the state’s agricultural industry. Unfortunately, when it came to the subject of ethanol and the Renewable Fuel Standard (RFS), most of the White House hopefuls resorted to pandering to voters rather than speaking truth about failed policy.

The hard-charging environmental lobby rallies around corn-based ethanol as a fuel alternative because ecofascists have great faith that it’s better for the environment (spoiler alert: it’s not). Farmers, particularly those in Iowa, embrace the policy mandating ethanol as a fuel additive because it raises demand for corn and puts more money in their pockets.

The environmental and agricultural lobbies have been strong enough to keep the RFS alive even after a number of scientists and economists have disproven the effectiveness and benefits of ethanol.

Sure, ethanol combustion in automobiles does produce less CO2 than fossil fuel combustion, which gives climate change fanatics warm fuzzies. However, growing all the corn necessary to meet Washington’s arbitrary mandate (and its subsequent effect on food prices), along with the intensive production process of manufacturing ethanol, heavily outweighs any benefits we experience through ethanol use. And that’s not to mention the fuel’s destructiveness for engines, or that CO2 is not a pollutant.

An Associated Press investigation into ethanol production revealed that, in their rush to clear land to plant corn, farmers “wiped out millions of acres of conservation land, destroyed habitat and polluted water supplies.” Wetlands were devastated, and billions of pounds of fertilizers contaminated rivers. Had manufacturers of any other product taken these actions, the Obama White House would be calling for investigations and fines. Instead, the administration plows ahead with current policy.

And as Mark Alexander wrote last year, “More than 90% of our nation’s corn crop went toward feeding people and livestock in the year 2000, with less than 5% of the crop going toward ethanol. In 2013, however, a whopping 40% went toward ethanol. To illustrate this grossly inefficient use of our natural resources, the amount of grain required to fill a 25-gallon automotive fuel tank with ethanol is enough grain to feed one person for an entire year.”

Nevertheless, Iowa Gov. Terry Branstad played the role of Captain Obvious when he stated that any candidate who publicly opposes the ethanol mandate would probably not win the Iowa caucus next year. In truth, it’s tough to stand in front of a crowd of potential supporters and tell them you are against their favorite policy. But no one ever said having the courage of your convictions was easy.

Almost all of the major GOP White House contenders failed the conviction test in Iowa.

Rick Perry said, “I don’t think you pull the RFS [Renewable Fuel Standard] out and discriminate against the RFS and leave all these other subsidies.” In other words, subsidies are good because subsidies exist.

Chris Christie and Lindsey Graham voiced full-throated support for the RFS, and Mike Huckabee claimed ethanol was good for national security policy by reducing dependence on foreign imports. Rick Santorum argued ethanol “creates jobs in small-town and rural America, which is where people are hurting.”

Even Scott Walker, who opposed ethanol in 2006, said that while he is opposed to government intervention he will support the ethanol mandate. “Right now we don’t have a free and open marketplace,” he asserted, so why not keep the mandate going? He did add that eventually there will be “no need to have a standard,” but his squishiness was palpable.

Jeb Bush was less objectionable, but also ducked making any substantive statements. “The markets are ultimately going to have to decide this,” he said, though he equivocated by refusing to set a firm deadline for phasing out the RFS.

Only Ted Cruz managed to get it right. “I recognize that this is a gathering of a lot of folks where the answer you’d like me to give is, ‘I’m for the RFS, darn it,’” he said. “But I’ll tell you, people are pretty fed up, I think, with politicians who go around and tell one group one thing, tell another group another thing, and then they go to Washington and they don’t do anything that they said they would do.”

Cruz added, “I don’t think Washington should be picking winners and losers. When it comes to energy, we should have an all-of-the-above approach, but it should be driven by the market.” Exactly right.

The audience applauded Cruz’s candor for coming out against the RFS, but no doubt many also made a mental note to scratch him off their short list for 2016.

Republicans don’t seem to have a problem speaking out against ObamaCare’s mandate that Americans buy health insurance. Why do they then embrace the mandate that Americans buy ethanol?

The answer is simple: Iowa is always an important state for presidential candidates as its caucus kicks off the primaries. But the ethanol debacle illustrates why this privilege should no longer reside in the Hawkeye State. GOP candidates should be standing by free market principles instead of corporate welfare, but thanks to the primary structure they’re forced to pander to Iowa farmers.

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