Wednesday, November 20, 2013

The Ethanol Dilemma

My my my, things can change quickly. For years, conservatives pointed out that ethanol is horrible idea. Liberals, as they always do, dismissed conservative complaints because they “knew” better. Now everything we’ve said has come to pass and liberals are fretting about all the problems “no one could possibly have foreseen.” Things are so bad that many liberals (the rational ones) now want to kill the ethanol program... only, their Dear Leader doesn’t.

Here are the conservative complaints about ethanol:
(1) It’s not actually green as it only seems green if you don’t count the fuel it took to produce the ethanol.

(2) Consumers don’t want it or it would already exist without government pressure. And subsidizing it will crowd out better alternatives.

(3) Using corn for fuel will cause massive inflation in food prices.
“Pshaw!” said liberals. Then reality struck. Now they see these problems too. In fact, there have been a number of studies liberals take on faith which show that corn-based ethanol is not a good biofuel at all. It takes so much energy to produce, so it's worse than using oil and actually causes global warming cooling climate change. Even worse, the subsidies have caused farmers to destroy million of acres of pristine land to plant corn. That has resulted in wetlands and “protected” land being plowed under, as well as the release of carbons from those lands. It has resulted in massive amounts of fertilizer being used, which has polluted rivers and made the dead zone in the Gulf of Mexico much worse. It has caused food prices to spike all over the world.

Because of this, articles are appearing from the left demanding that Obama end the ethanol mandate to stop any further damage being done. The AP just did an investigation (LINK) of this, which it called “the secret, dirty cost of Obama’s green power push.” Check out how this article starts:
“The hills of southern Iowa bear the scars of America's push for green energy: The brown gashes where rain has washed away the soil. The polluted streams that dump fertilizer into the water supply. Even the cemetery that disappeared like an apparition into a cornfield.

It wasn't supposed to be this way.”
Yep, that's not a happy article. Unfortunately for liberals, Team Obama is in no mood to comply. Why? Well, for one thing, they get a ton of money from industry groups who want this to continue. The entire ethanol industrial complex is big into lobbying. At the same time, Obama doesn’t admit mistakes. And in this case, they fear that if they admit a mistake, then that (1) will create a groundswell against “clean energy” generally and (2) will scare away companies that are investing in biofuels that might actually work. This is what happens when you build a house of cards.

Then came Friday.

On Friday, the EPA issued new regulations cutting back on the amount of ethanol it requires oil companies to use. Has Obama finally seen the light? Hardly. The EPA really had no choice. The way the regulations are written, Congress required a certain number of gallons of ethanol be used. But with Americans using significantly less gasoline than expected in recent years, the EPA mandate was about to hit something called “the blend wall,” where the EPA was requiring the oil companies to use more ethanol than was physically possible given the amount of fuel drivers are using. In other words, the EPA had no choice but to cut back the mandate or everything would have pretty much stopped in the nation’s fuel supply.

Naturally, ethanol groups are very upset that the government didn't ignore reality. Apparently, government money makes you stupid. More interestingly, liberals are knee jerking this all over the place and it points out how hopelessly muddled and clueless their “ideology” has become:

First, you have liberals who are screaming that this will hurt the biofuel industry. They worry this will “chill” companies who are developing better fuels. Yeah, right. How does it help to implode the fuel system of the country in the name of the ethanol fantasy? This is what happens when reality bursts your bubble... reality wins and you retreat or die.

Secondly, they are labeling this a victory for oil companies, which is unacceptable in liberal circles. But you can’t criticize Obama either. So his siding with oil companies is creating a lot of contortion-related head trauma on the left. It also raises this problem: if eliminating ethanol is the environmentally friendly thing to do, but it helps oil companies, how can they do it? They can’t. That’s the problem with ideologues... they get stuck in loops.

Third, they are choosing to hate on oil companies at the expense of helping food companies who are making it harder for the poor to buy food the world over. Nice. “Sorry you poor bastards, but we have an enemy we don't want to see make any more profit than they already do... we're doing it for you.”

Fourth, in their efforts to not let oil companies win, they have sided with the likes of Monsanto and ADM, which is another liberal no-no.

What an interesting illogic problem. Anything they do will help someone they hate and the right choice is to abandon something they believe on principle even though they now know it not only doesn’t work but actively does harm to their favorite causes. Twisted. And in the middle is their un-criticize-able leader profiting from each side. Twisted indeed.

Ah, liberalism.

35 comments:

T-Rav said...

What's always bothered me about ethanol is the way it's always warped otherwise sensible rural folks, including certain family members of mine, into defending both it and the subsidies they get. It's the most obvious example (to me) of our twisted relationship with big government: Yeah, cut down the size of government, roll back the welfare state, but not Program X, because I need Program X and that one's actually a good idea anyway.

I doubt the extra fertilizer from the corn production is making things that much worse; those of us who live near the Mississippi River already knew you don't drink from, swim in, or eat fish caught out of that water. But as someone who gets mad every time I see them cutting a new highway through the Ozarks, tearing up the pristine land is definitely a big deal, especially with the soil erosion.

I doubt it'll change any time soon, though, because as we've all seen, the administration is far more concerned with style and substance, and to be seen cavorting with Big Oil....well, that just won't do.

AndrewPrice said...

T-Rav, That is the problem with a government that hands out goodies to everyone. It become impossible to cut the government because everyone fights to keep their benefits going. That's the beauty of sequestration... across the board cuts work (even if they aren't really across the board).

On the fertilizer, I am just repeating what I've read. I haven't actually investigated it. But if they increased the amount of land being used by a significant percentage, I can see it making things worse.

On pristine lands, I feel the same way about Colorado. They are building up the sides of the mountains and filling in the prairie and it kind of sucks to see all that beauty lost.

As for change, I get the feeling from what I'm reading that it's simply impossible from them. Basically, they know what's best, but they seem more interested in picking winners and losers than doing what's right. And you can forget Obama doing the right thing ever... he does the money thing.

Tennessee Jed said...

a scene played out again, and again, and again. It reminds me, a little, of the affordable care act. I think some people on the right warned of the problems, but were, ahem, ignored. Now, Democrats wan't to hold news conferences to get on record flipping their position .... or Joh "Effing" Kerry voting against the war before he voted for it, or something like that.

Critch said...

It's mind boggling I tell you, mind boggling....it wouldn't surpirse me if the Obama folks will want to keep troops in West Crapistan.

Critch said...

Here in SwampEast, MO the farmers have already cut their bean production to up the corn production...if they cut rice production I'm afraid my Budweiser products will go up in price...the horror...I love it when the Libs get to twist in the wind..and I smile as well when it's the super Conservatives.....

Individualist said...

This problem is older than Obama. The Energy Independence and Security Act was written in 2007. Ethanol is not the brain child of Obama but the 2006 congress run by Pelosi/Frank/Hoyer etc.

Subsidies to Agro Business have been going on since FDR.

An interesting Matt Damon movie, the Informant! based on the true life experiences of Marc Whitacre deals with an interesting issue of price fixing of ADM and Chinese and Japanese agro conglomerates on a world stage. Whitacre turns state witness for the government but the feds soon find he does this to hide the fact that he has several fraud schemes of his own.

The movie is interesting because based on real events, Hollywood had to stick to the historical script as it were and could only insert their political propaganda by inference. The movie deals with the issue of the corruption at the company leading Whitacre to engage in corruption and it is presented in the light of the typical Hollywood Big Business morality play with the government represented by the FBI going after the big bad CEO's.

What is left out of the equation in the movie is that the price fixing that the Big Agro's were doing on a world scale in manipulating the price of commodities made from corn, soybeans etc. is in fact government mandated on the national scale by the farm subsidy and price control acts. Seen in this light the corruption starts not with the CEO but with congress.

To my mind Ethanol is a fraud. It is the same kind of fraud the farm subsidies are. The payouts are supposed to go to independent farmers but they end up in the back pockets of giants like ADM through creative partnership agreements that get around the law. In 1994 Newt Gingritch tried to reform and end these subsidies as part of his promise in the Contract with America. It was not just the left that blocked him but the more sensible "moderates" in the Establishment who are naturally wiser than such crazy Tea Party types that want less government because lobbyists give them more money. I am sure that Ethanol will begin the first Act of the play as agro reform did in '94. Hopefully it won't work out the same. But any hope that Washington does the right thing for the people and not the lobbyists is always a thin hope at best.

T-Rav said...

Critch, where in SwampEast MO do you live? That sounds suspiciously like my neck of the woods....

OMMAG said...

I got a good look at the mindset of the ethanol producers mindset in 2005.

A rep from one of the northwest states was here in Canada to attend a meeting with some environmental technology companies at our federal industry and trade offices.

The gist of the meeting was how to overcome regulatory and infrastructure roadblocks. Most of us were looking for ways to get trial programs running without jumping through an endless loop of regulatory agencies. The lady from the ethanol group was just looking to market her product.

In the course of the meeting a couple of our own technology analysts pointed out to her that in order to build her market she needed distribution infrastructure. She agreed and started to make an argument for government programs to build the distribution. We pointed out that the problem could be solved by opening the market to international suppliers. She argued that they could not afford to compete.

Seemed to me that was the entire issue.

No competition, no market demand and dependency on government intervention. A losing proposition from a group of people hoping to establish a perpetual system.to milk.

tryanmax said...

Money trumps principles for most people. Around here, I've been hearing one of the supposedly conservative local radio hosts pimping for ethanol, basically declaring every well-known problem to be a myth. It's obviously a paid spot, it runs over and over, but having his voice behind it is enough to convince a good chunk of his audience that supporting ethanol is the "conservative" thing to do. And I'm pretty sure he won't be discussing this story during his live show, either.

What eternally frustrates me is that this is the umpteenth example of conservatives identifying the problem well before the left and the media. This should be the go-to line whenever Dems propose anything, but Repubs and conservatives have convinced themselves that people simply can't remember things longer than a news cycle instead of trying to combat that.

And, of course, the public will always choose a bad idea over no idea where a problem is perceived.

AndrewPrice said...

Jed, That's as old a game as there are Democrats. They come up with a "brilliant" idea. The Republicans warn them of the obvious flaws. The Democrats scoff. They put their plan into action. It implodes. They scream that no know could have seen this coming. Then they whine that the Republicans are evil for not helping to fix their folly to make it work.

AndrewPrice said...

Critch, It is mind-boggling. You would think that if you knew something was a disaster... you would do something else. But not these people. They don't want to send the wrong message by stopping the disaster. Wow.

AndrewPrice said...

Critch, Food companies and beverage companies have been fighting the ethanol program for years for that very reason -- it makes food more expensive.

I've heard that farmers all over the country have switched to corn because it's worth more because of this program. That's a classic market distortion and it should be warning to everyone... even liberals. Apparently, some don't want to listen though.

"Ignore the iceberg and run faster." "Yes, Captain Obama!"

AndrewPrice said...

Indi, I agree completely. This problem goes back much further, but Obama has a chance to help fix it by just doing what the smarter liberals are telling him about ethanol... and he won't.

And you're right, the farm subsidies are essentially a form of price fixing. Here the feds actually mandate the amount of ethanol that needs to be used in gallons each year. That would be like telling the nation's restaurants, "You must sell 1 million yak steaks each year or we'll shut you down." That works as a price fixing measure for yak steaks.

And the bulk of the farm subsidies do go to the huge agro-businesses that don't need it, even though it's sold as helping independent farmers. In some instance, it actually goes to people don't even farm. There have been some Congressmen who became infamous for getting those payments.

BevfromNYC said...

Tryanmax - It is not enough to just "identify the problem". We MUST have a solution and alternatives to go along with it. Conservatives are masters at being the cranky-pantses in the room, which is the reason why we lose the news cycles. We don't present better ideas at the same time...

AndrewPrice said...

OMMAG, Welcome! That doesn't surprise me in the least. These government programs often are just a form of protectionism and the people who get into them do so because they couldn't compete in the free market -- so they want to keep the rest of the world out. And once they are in these quasi-government markets, they think nothing of trying to get the government to do more and more for them, even if it makes no sense to go that route.

I've dealt with a lot of government contractors in my life and it's always been fascinating to me how resistant they are to use products that already exist on the private market. Obamacare is the perfect example of that mindset. Rather than going to someone like Amazon and saying, "Can we buy a copy of your programming," everyone involve decided to build from scratch and the results were a disaster. I've even seen the government go so far at one point as to design its own word processor despite the existence of widely-loved commercial alternatives. There's just something about the mindset of people who depend on the government that the government should always be the first place you look to solve any problem.

AndrewPrice said...

tryanmax, I've heard a lot of conservatives do all kinds of mental gymnastics to defend ethanol. One interesting example was two years ago when John Coburn tried to kill the program and Grover Norquist screamed that he was trying to "raise taxes" because killing a subsidy was a tax hike. Huh?!

On spotting the problem, every... single... time... conservatives point out all the problems and the Democrats always attack them as defeatists. Then the problems happen and the Democrats play this "Nobody could have know this!" game. You would think they would learn, but as you and I both know, Democrats are immune from learning.

I agree that we need to get better at making the point that we warned about these dangers. I know that people don't like know-it-alls, but you can do it in a way which doesn't annoy people, and the way to do it is (1) propose a fix/alternative when you are saying "I told you so," and (2) use their list of failures that we warned about every time they propose something new... "Gee, this is like that time we told you about X, and you ignored us and it happened.... or like when we warned you about Y, and you ignored us and it happened, etc."

In fact, as an interesting aside, if you want a good way to do it, watch television. What the way the good characters lecture the fools and repeat that formula. Hollywood has essentially primed the public to identify the good and bad players from the way they talk. Make use of that.

AndrewPrice said...

Bev, You have a way with words: cranky-pantses. LOL!

I agree completely. To start winning these battles, we need (1) a list of how wrong the Democrats are time and again, (2) a clear and obvious way to describe what the problem is, (3) a way to describe the harm in a way that will make average people realize they will be hurt, and (4) an alternative that at least seems to solve the underlying problem.

AndrewPrice said...

Folks, I'll be back in a couple hours. Carry on! :)

Critch said...

I live in Poplar Bluff, but I grew up in Doniphan.

Koshcat said...

We can thank Mr. Bush for the current ethanol program. The best part about the recent EPA regulations is that was on auto-pilot. They had no choice and in reality doesn't change anything; it just stops the growth. The current ethanol market is saturated so you will start to see a drop in prices. This year's corn crop is very high and farmers are having difficulty getting propane for their dryers slowing down the harvest. I say let them use ethanol! Very ironic. Also ironic is that the reason they had to level off was due to decrease in gasoline use probably from, I don't know, more efficient cars, hybrids, and electric cars. So their own policies bumped up against reality.

tryanmax said...

Koshcat -- don't forget the people who figured out ways to cut back on driving (like me!) I'd lay you dollars to donuts that actually accounts for the biggest chunk of reduced fuel usage.

AndrewPrice said...

Koshcat, There is a real irony that increase fuel efficiency is killing the "green fuels" industry, isn't it? I also think Obama's disastrous economic performance isn't helping either because people just aren't wasting money like they used to.

And yeah, Bush was big on ethanol. I think they saw it as a way to buy farm votes and create the impression of an environmental record.

AndrewPrice said...

tryanmax, Donuts... yum. I think the biggest change is simply people who drive less right now. You see a lot of that because that's what people do in bad times... they save.

BevfromNYC said...

Yeah, the price of gasoline hovering at $4 a gallon probably has something to do with cutting oil consumption too. Ethanol was supposed to make gas cheaper, not more expensive, wasn't it? And more and more natural gas is replacing oil fuel heating and power generation too. The 74th Street powerhouse is one of the first in Manhattan to convert to natural gas.

AndrewPrice said...

Bev, Natural gas should lead to an energy boom, assuming it's profitable to get it out of the ground. Right now, a lot of energy companies are saying the price is too low to make it profitable. But we'll see how that goes when the economy picks up again.

T-Rav said...

Critch: Hey, I live in Bell City! (Stoddard County, you know.) Though I go to school in Columbia at the moment.

Yeah, you all do have a lot of rice roundabout there. Which I for one am glad we do not; our house sits on the edge of a field, and between the rats and the snakes and the clouds of mosquitoes, I think I'd throw a fit.

tryanmax said...

Interestingly, I just looked into it and it appears that Americans' mileage and gas consumption started declining well before the recession, but of course collapsed when it hit. Of course, you had the media pounding away at the idea that energy prices were out-of-control under Bush, but I still wouldn't expect that to generate a net decline. This is all to say that I think Americans' driving habits would have changed regardless, but for what reasons, I couldn't exactly say.

Critch said...

I've thought about requesting Air Defense Command to look into using our mosquitos for target drones...they're already there and bigger...

AndrewPrice said...

Critch, One of the things I love about Colorado is how few bugs we have. When I lived in Virginia, I saw things fly by my head that I thought only lived in horror movies.

AndrewPrice said...

tryanmax, I have heard that. I suspect the problem was still that the economy has sucked eggs for quite some time for average people, even as the overall economic numbers are good.

T-Rav said...

What's more fun is when they get into your house during the summer, and when you step into the bathroom at night to brush your teeth and turn on the light, the sink's full of creepy crawlies. It bothers you, but you quickly decide to just grab the toothbrush and get it over with. Because there is no escape. There is no escape.

AndrewPrice said...

Uh... yeah. Have you considered a massive DDT raid when no one is looking?

AndrewPrice said...

This is hilarious if you haven't heard: LINK

Some guy in Colorado tried to sign up for Obamacare and the computer signed up his dog Baxter instead. LOL! Apparently, the guy gave Baxter's name as the answer to the security question.

T-Rav said...

Andrew, the kittens and I are saving all that for my rise to power, and sadly there's none to spare for that. :-(

I saw that blurb about the Colorado guy and his dog. (snort) I wonder if that has anything to do with Obama's approval rating in the Centennial State dropping into the 30s....

AndrewPrice said...

T-Rav, I look forward to you plans to reshape the world. LOL!

Yeah, that's probably part of it. I really had to laugh about the dog though.

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