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Back off the Renewable Fuels Standard

September 27, 2013


National Corn Growers Association

Corn Commentary features a post authored by Minnesota Corn Growers Association President Tom Haag that originally ran on MinnesotaFarmingGuide.com.

Corn Views: Back off the Renewable Fuels Standard, it’s working

If I told you there was a piece of legislation that has reduced America’s dependence on foreign oil by 20 percent, supports 400,000 jobs, adds $43 billion to our gross domestic product, reduces greenhouse gas emissions by at least 34 percent and saves the typical motorist $1,200 per year, would you call for that legislation to be scaled back or repealed?

It sounds like a silly question, doesn’t it? Why would anyone want to repeal a piece of legislation that is doing all of those things?

But that’s exactly what Big Oil companies and their highly paid executives, lobbyists and public relations teams are trying to do to a piece of legislation called the Renewable Fuels Standard (RFS).

The RFS was enacted in 2005, updated in 2007, and is one of our country’s most successful energy policies ever. Thanks to the RFS — legislation that sets market-based goals for blending renewable fuels with gasoline – Big Oil’s monopoly on transportation fuels is loosening, which allows alternatives like ethanol to compete fairly in the marketplace.

Unfortunately, Big Oil isn’t a fan of the free market and competition. It’s attacking the RFS and ethanol so it can continue gouging Americans at the pump and limit fuel choices.

I believe that America was founded on free-market principles. Businesses should compete fairly in the marketplace and consumers should be protected against monopolies like Big Oil that unfairly manipulate prices.

Consider this: A barrel of oil cost $23 in 2001. Today, oil is over $100 per barrel — a 335 percent increase – despite the fact that demand for gasoline is down and we’re drilling for more oil in places like North Dakota.

In Minnesota, the price of a gallon of gas has gone from under $1.50 to around $4 (sometimes more) over the last 11 years.

These unexplainable and unjustified price increases are not sustainable. We need legislation like the RFS to ensure fairness in the marketplace and give alternatives like ethanol a shot to compete. Because the price of ethanol is less than gasoline, it’s already saving Americans about $1.09 per gallon.

Of course, Big Oil hasn’t let the facts get in the way of its attacks on renewable fuels. It’s gotten so bad that Sen. Amy Klobuchar (D-Minn.) and Sen. Chuck Grassley (R-Iowa) recently urged the Justice Department and the Federal Trade Commission to investigate possibly anti-competitive practices (such as intimidating franchisees) by oil companies that may block market access for renewable fuels.

Minnesota’s corn farmers appreciate the bi-partisan efforts of both senators to protect consumers and build a transportation fuels market that is competitive. Now it’s time for other leaders in Washington to follow suit and defend the RFS.

Partisan gridlock already makes it difficult for our elected officials to pass meaningful legislation these days. The last thing Americans need is for Congress to repeal the RFS – a piece of legislation that’s saving us money, increasing competition and preserving our environment.

Corn views is a monthly column from Minnesota Corn Growers Association president Tom Haag, who farms near Eden Valley.

  
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Discuss this article

Bob Clark September 27, 2013

You don’t really save a $1.09 per gallon with ethanol, because ethanol burns faster giving you only two thirds the mileage of pure petroleum gasoline. Moreover, because of the lower gas mileage with ethanol, you end up having to stop at gasoline stations more often where people like me splurge on junk food items. Then too, I’ve gone through two lawn mowers because of ethanol corroding the fuel lines, and now have to buy clear gasoline (without the ethanol) at a much higher price than otherwise.

Farmers are getting the economic rent from the ethanol mandate, so I would look very skeptically at this article authored by a farming organization. We know what side this organization’s bread is buttered.

Jim Terry September 27, 2013

The mixture of gasoline and ethanol known as E-10 (gasohol) should not be used as fuel in vehicles designed to use gasoline. This mixture reduces fuel economy by 10 to 25%. This is my experience in actual use. I have no reason to believe that other drivers are doing any better. The loss of fuel economy is far in excess of the amount of ethanol added. It typically takes $4 worth of E-10 to go as far as $3 worth of petroleum gasoline. How is this saving Gasoline? How do you expect the drivers to accept E-15? Its probably twice as bad! I think the RFS should be repealed.

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