Geography Trumps Party on Renewable Fuels

National Journal
Alex Brown
Oct. 9, 2013, 8:02 a.m.

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It’s not of­ten you’ll see a Re­pub­lic­an de­fend­ing a gov­ern­ment man­date or a Demo­crat dis­par­aging re­new­able fuels. But such was the case Wed­nes­day at a Na­tion­al Journ­al for­um that showed the ex­tent to which politi­cians’ views on the re­new­able-fuel stand­ard de­pend more on where they’re from than the party they rep­res­ent.

“Yes, it is a man­date. But it’s a man­date that’s for the pur­pose of mar­ket ac­cess,” said Rep. Steve King, R-Iowa, whose con­stitu­ency likes the high­er de­mand for corn brought about by the re­quire­ment to blend in­creas­ing amounts of corn-based eth­n­ol in­to gas­ol­ine.

But that suc­cess has come at the ex­pense of oth­er ag­ri­cul­ture sec­tors, countered Rep. Peter Welch, D-Vt., and has in­creased prices for oth­er corn products such as live­stock feed.

“Rep. King, like me, is in­flu­enced by who he rep­res­ents,” Welch said. “I hear from [dairy] farm­ers who are pay­ing a high­er price, he hears from farm­ers who have done ex­tremely well.”

King ar­gued that a re­peal or cut­back of the man­date could kill the eth­an­ol in­dustry, leav­ing pet­ro­leum with a de facto mono­poly and driv­ing up gas prices. The stand­ard, he said, is an in­stance where gov­ern­ment in­ter­ven­tion can in­crease mar­ket­place com­pet­i­tion. Elim­in­at­ing eth­an­ol would take 26 per­cent of fuel off the mar­ket, ac­cord­ing to King.

“If you took that out of the mar­ket­place, you would see gas prices go up dra­mat­ic­ally,” he said. “If you take a sup­ply out, you’d see a dra­mat­ic change.”

Con­sumers are more likely to be af­fected by high­er food prices, Welch said, ac­know­ledging a rare in­stance where he found him­self aligned with the pet­ro­leum in­dustry.

“I’m oil all the way on this one,” he said. “It’s in­dis­put­able right now that the man­date has a huge im­pact on the pro­duc­tion of corn, in di­vert­ing it in­to eth­an­ol…. It’s had an im­pact on the cost of food. It’s had an im­pact on de­vel­op­ing coun­tries” that are vul­ner­able to high­er-cost food im­ports.

Welch said he doesn’t sup­port full re­peal of the re­new­able-fuel stand­ard, but the corn-based eth­an­ol re­quire­ments have proven bur­den­some to con­sumers. “It’s been a flop,” he said.

Pan­el­ists from the res­taur­ant, live­stock, and small-en­gine in­dus­tries agreed. Along with high­er food prices, the stand­ard is hurt­ing con­sumers who are un­aware eth­an­ol can be harm­ful to their small-en­gine products, said Out­door Power Equip­ment In­sti­tute Pres­id­ent Kris Kiser.

Re­new­able-en­ergy and bio­fuels ad­voc­ates ar­gued that the stand­ard has helped push the U.S. for­ward in de­vel­op­ing sus­tain­able fuels, and that con­tin­ued im­ple­ment­a­tion would en­cour­age that growth.

Peter Lehner, ex­ec­ut­ive dir­ect­or of the Nat­ur­al Re­sources De­fense Coun­cil, said en­vir­on­ment­al­ists can see both sides of the is­sue. The corn-based eth­an­ol man­date is harm­ful, he said, but the stand­ard as a whole “is mov­ing us to where we even­tu­ally need to be” with re­new­able en­ergy. Con­gress can’t be ex­pec­ted to ef­fect­ively tweak the man­date, he said, so green ad­voc­ates have to ac­cept the bad with the good.

Any dis­cus­sion on chan­ging the stand­ard, said King, should factor in the corn farm­ers who have a huge stake in con­tin­ued de­mand. He noted that corn pro­duc­tion, once about 80 bushels an acre, is now more than 200.

As he put it, “If we’re not go­ing to turn some of this in­to fuel, what are we go­ing to do with all this corn?”

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