Obama's EPA to Farmers: No Ethanol Waiver, If You Go Out of Business, Tough
November 19, 2012 11:23 AM
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Big corporate corn farmers celebrate major win, share prices in corn corps. inch higher
Battered by a drought, and hit a second time by the U.S. government's artificial inflation of corn prices, many small livestock farmers were desperately hoping that the Obama administration’s and its appointed leadership at the
U.S. Environmental Protection Agency
agree to a temporary waiver
on blending requirements of ethanol in vehicles.
I. Big Corn Gets a Helping Hand from the Obama Admin.
The EPA on Friday echoed the sentiments of big corn special interests saying it found no evidence that "significant harm" would be caused by not granting a waiver.
The decision came as somewhat of a surprise. Many sources had expected the Obama administration to
instead punt on the issue
; the decision to side with the well-heeled special interests to push a program that is unpopular and likely will now cost American jobs was unexpected.
The auto industry has also vigorously opposed the EPA's decision to
bump ethanol blending requirements to 15 percent
. They argue that the higher blend will
ruin the engines of older vehicles
, increasing emissions and forcing consumers to pay for expensive repairs or abandon their vehicles.
Obama and Bush both backed big corn special interests. [Image Source: Politically Incorrect]
The EPA has alleged that it knows the science behind fuel blending better than the engineers who make cars, essentially
calling the automakers liars
The decision will also impact consumers, as ethanol provides less gas mileage in traditional engines that gasoline. In other words, unless gas stations start charging less at the pump (which seems rather unlikely) consumers will be paying the same amount per gallon, for less equivalent fuel.
Even environmentalists are outraged at the Obama administration, given that ethanol has been shown to not only waste energy, but also increase carbon emissions.
, Michal Rosenoer, biofuels policy campaigner at Friends of the Earth, to
The Detroit News
If the worst U.S. drought in more than 50 years and skyrocketing food prices are not enough to make EPA act, it falls to Congress to provide relief from our senseless federal support for corn ethanol. The RFS is a broken policy — rather than giving us clean energy, it's incentivizing biofuels like corn ethanol that are exacerbating our economic and environmental problems.
Congress needs to cut corn ethanol from the RFS entirely to protect the economy and the environment from this destructive and dirty fuel.
But despite the united opposition, the Obama administration appears resolute in following its predecessor, the Republican Bush administration, in choosing to side with the big corn special interest groups.
II. EPA to Small Farmers: "Deal With It"
Gina McCarthy, assistant administrator for EPA's Office of Air and Radiation fires back at the critics, commenting, "We recognize that this year's drought has created hardship in some sectors of the economy, particularly for livestock producers. But our extensive analysis makes clear that congressional requirements for a waiver have not been met and that waiving the RFS will have little, if any, impact."
In other words, the EPA admits it recognizes that farmers are struggling, resorting to desperate measures like feeding their livestock candy waste; but when it comes to bucking a key special interest's agenda the EPA's answer to farmers is basically "tough luck".
EPA claimed to be sympathetic to farmers, but refused to help them with a waiver.
[Image Source: US News]
Over 200 members of Congress, eight state governors, and numerous college professors sign a letter arguing that the blending targets would indeed have a dire impact on farmers.
So who wins? The biggest winners are the corn and ethanol industry, particularly the growers, who benefit the most from the artificial inflation of corn prices. Many of these growers are not even family owned, but rather are large corporate farms run by deep-pocketed entities like Archer Daniels Midland Comp. (
) and ConAgra Foods, Inc. (
). Indeed, both companies saw a rise in share prices following the EPA's decision.
Big corn donates deeply to federal politiicans, who in turn reward it with billions in subsidies.
[Image Source: Agriculture.com]
So the word is official -- the U.S. will continue to manipulate prices in the fuel department, despite the cost to consumers, the environment, automakers, livestock farmers, and U.S. jobs. That's bad news for most -- unless you happen to be an Archer Daniels Midland shareholder.
The Detroit News
This article is over a month old, voting and posting comments is disabled
RE: Bias and Inaccuracy
11/20/2012 5:38:32 AM
huh? If you mandate stations to use only E15 instead of E10, then you are causing higher demand on ethanol (which is exclusively made from corn in the US). Therefore you are causing higher demand on corn. With supply constrained by acreage, then prices will go up.
It's economics stupid. Prices + additional demand w/o additional supply = higher prices. Corn will go up in price in relation to the price of oil.
RE: Bias and Inaccuracy
11/20/2012 8:02:19 PM
I didn't say that the move wouldn't affect demand or prices. In fact, I clearly stated:
The move has a consequence for prices, sure
...but the author of the article alleges that the mandate is being enforced *solely* with the intent of manipulating prices. Basically arguing that it's a huge government conspiracy.
So I'm not arguing that it will affect prices, I'm just saying that I don't believe the author's unsupported claim that the *purpose* of the mandate is to increase prices. Higher prices are a side-effect of the mandate, not its intended goal. Positing the contrary requires proof. Far more proof than what's provided in the article, at least.
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