Fixing the folly of food for fuel?

Commentary by Marita Noon

(Editor’s note: since Marita was “not in love with” the original title and encouraged those who run her work to rename this piece, I changed it to what you see above.)

The Renewable Fuel Standard (RFS) – also known as the ethanol mandate – was passed by Congress in 2005 and expanded in 2007. Regardless of market conditions, it required ever-increasing quantities of biofuel be blended into the nation’s gasoline supply – though the Environmental Protection Agency (EPA) does have the flexibility to make some adjustments based on conditions, such as availability and infrastructure.

At the time of its passage, it was unfathomable that a decade later Americans would be consuming less gasoline, not more. Instead of requiring a set, or even growing, percentage of ethanol be used, the law called for an increasing amount of gallons – which has created unforeseen complications.

Since the law was passed, due to increased fuel efficiency and a generally sluggish economy (meaning fewer people are driving to and from work every day) we’ve been using less gasoline, not more. Requiring more and more ethanol in less and less gasoline is not what the original law intended.

It was believed that the RFS would help achieve energy independence and reduce CO2 emissions – both ideas from a different era.

The RFS was passed at the low point of a decades long decline in U.S. oil production. At the time, no one knew that the trend line would totally reverse due to American ingenuity and the innovations of horizontal drilling and hydraulic fracturing that have unleashed the new era of abundance. Additionally, it was believed that corn-based fuel (which is the primary source for ethanol in the U.S.) would reduce carbon dioxide emissions – though the results have been questionable at best.

Since the RFS became law, numerous studies have been done to determine the environmental benefit of ethanol over gasoline – many of which conclude that ethanol is actually more detrimental than gasoline. At a recent House Oversight Committee hearing, John DeCicco, a research professor at the University of Michigan’s Energy Institute, said, according to Morning Consult, “the studies assuming biofuels are carbon neutral are flawed.” Morning Consult reports: “he has found ethanol’s net emissions to be as much as 70 percent higher than traditional gasoline.”

Ethanol has an unlikely collection of opponents. Addressing ads put out by the ethanol lobby positing that only “big oil” wants to end the ethanol mandate, FactCheck.org disputes the claim: “Several environmental groups oppose it as well. So does a wide coalition that includes restaurant owners concerned about upward pressure on food prices and boat manufacturers upset at the problems that ethanol can cause in marine engines.”

Despite the controversy, the EPA claims the RFS is a “success.” Janet McCabe, acting assistant administrator for EPA’s Office of Air and Radiation, says: it “has driven biofuel production and use in the U.S. to levels higher than any other nation. This administration is committed to keeping the RFS program on track, spurring continued growth in biofuel production and use, and achieving the climate and energy independence benefits that Congress envisioned from this program.”

With this in mind, it is no surprise that the biofuel industry – which wouldn’t exist without the ethanol mandate – was unhappy when, on May 18, the EPA released its biofuel blending requirements for 2017. Using its ability to make adjustments, the EPA announcement was less than the law required, but more than the market demands. The Wall Street Journal (WSJ) states; “EPA officials said they were seeking to strike a balance between Congress’s goal of using more ethanol and the realities of the current fuel market and infrastructure.” Instead, no one was happy.

In Biomass Magazine, McCabe defends the action: “The fact that Congress chose to mandate increasing and substantial amounts of renewable fuel clearly signals that it intended the RFS program to create incentives to increase renewable fuel supplies and overcome constraints in the market. The standards we are proposing would provide those incentives.”

Chet Thompson, president of American Fuel & Petrochemical Manufacturers, which represents refineries regulated under the standard, responded: “EPA’s proposal threatens to force consumers to use more biofuel than vehicles, engines and fueling infrastructure can handle.” He says: “the proposed volumes still go beyond marketplace realities.”

In contrast, a statement from Chip Bowling, president of the National Corn Growers Association said: “In the past, the EPA has cited a lack of fuel infrastructure as one reason for failing to follow statute. Our corn farmers and the ethanol industry have responded. Over the past year, we’ve invested millions of dollars along with the U.S. Department of Agriculture’s Biofuel Infrastructure Partnership to accelerate public and private investment in new ethanol pumps and fuel infrastructure. The fact is, today’s driver has more access than ever to renewable fuel choices.”

Regarding the EPA’s May 18 decision, DeCicco told me: “The EPA is trying to pick an economic middle road between the proponents and the opponents. But, through the RFS, the environment has been run off the road. Contrary to what has been promoted by the Department of Energy and some other government agencies, biofuels make CO2 emissions worse rather than better.”

At the aforementioned House hearing, Representative Jim Jordan’s (R-OH) opening statement called the RFS “a classic example of what happens when you get a bunch of politicians together who think they’re smarter than the marketplace.”

Frank Macchiarola, downstream director at the American Petroleum Institute, is calling on Congress to “repeal or significantly reform the RFS.” He asserts: “Members on both sides of the aisle agree this program is a failure, and we are stepping up our call for Congress to act.”

Proving Macchiarola’s point, before the 2017 requirements were released, on May 10, U.S. Representatives Bill Flores (R-TX), Peter Welch (D-VT), Bob Goodlatte (R-VA), Jim Costa (D-CA), Steve Womack (R-AR), and Cedric Richmond (D-LA) introduced bipartisan RFS reform legislation. The Food and Fuel Consumer Protection Act, H.R. 5180, limits the RFS mandate to levels that our nation’s cars, trucks, boats and other small engines can safely accommodate. The bill “directs EPA to consider current market realities and cap the maximum volume of ethanol blended into the transportation fuel supply at 9.7 percent of projected gasoline demand.” Following the news, the bill’s cosponsors issued a statement calling the RFS “unsustainable.”

It is time to get back to allowing the free market – not Congress, not unelected bureaucrats, not mandates, not artificially spurred growth in a chosen industry – to determine our fuel choices. Because ethanol is an effective octane-boosting additive, it will always have market demand. Farmers who’ve invested in it will not be driven out of business. The Food and Fuel Consumer Protection Act, while not repealing the RFS outright (which would be tough to pass), offers a reasonable fix to well-intended, but flawed legislation.

The author of Energy Freedom, Marita Noon serves as the executive director for Energy Makes America Great Inc., and the companion educational organization, the Citizens’ Alliance for Responsible Energy (CARE). She hosts a weekly radio program: America’s Voice for Energywhich expands on the content of her weekly column. Follow her @EnergyRabbit.

Harris explains his vote for Boehner

Needless to say, many conservatives around the country are disappointed (but not surprised) that the House of Representatives they elected to be the counterweight to Barack Obama decided to elect as its Speaker an insider who has shown little fortitude in fighting for the cause of limited government.

Included in that number who re-elected Boehner as Speaker was our own representative, Andy Harris. He took to social media to explain why, but I think it’s relevant to express my thoughts on why his assessment was incorrect by dividing his statement into portions.

In November, Speaker Boehner was re-nominated by the Republican House Conference without a single opponent stepping forward. That was the appropriate time for an alternative to step forward and be considered by House Republicans.

A lot changed in two months. The House vote occurred on November 13, before Barack Obama followed through on his pledge to take executive action on immigration and before the CRomnibus bill was voted on – in fact, the idea was hatched around that time. It was his handling of these two events and unwillingness to take a stand which included any slim prospect of a government shutdown which angered a number of conservatives. Too many things were taken off the table.

So the timing argument isn’t one which holds water with me.

Today’s vote on the House floor was simply whether Nancy Pelosi or John Boehner was going to be Speaker of the House.

Wrong. There was no chance Pelosi was going to be Speaker. The idea was to bring a second ballot in the hopes that Boehner would see the light, withdraw his name, and allow a compromise candidate to emerge. As Erick Erickson wrote, fellow Ohioan Jim Jordan may have been that guy.

I hope that we can now move forward and work with the Senate to pass common-sense conservative policies. If Speaker Boehner does not deliver on his promises, a Republican House Conference can be called by 50 members and I would join in that call.

Color me extremely, extremely skeptical on that one. We have a four-year track record of a lack of leadership and of kicking multiple cans down the road. And I can already see the excuses.

Over the summer: “We can’t call a conference now – we’re in the middle of working on the FY2016 budget and it would be a distraction.”

Come next fall: “We can’t call a conference now because it would handicap our nominee in 2016. The media would have a field day.”

In 2016: “It’s too close to the election, we can’t risk the infighting and distractions.” And so on. It would be a waiting game where they would hope to outlast our side.

I have no problem standing up for conservative principles to the Speaker and Republican leadership, such as my vote against the reauthorization of the Patriot Act, as well as my votes against the Ryan-Murray budget deal and debt ceiling increases.

But you voted for the CRomnibus, while civil libertarians dislike your vote for CISPA and FISA, so both these items you cite are somewhat mixed bags on the whole.

Please know that I will continue to fight for conservative values and Maryland’s First District in the 114th Congress.

You’re not off to a good start.

I go back to something I highlighted in a previous post on this subject, which reprinted a letter from the Wicomico Society of Patriots:

I am aware that it is potentially politically dangerous for Andy Harris to vote against Boehner. If Boehner were to win anyway, then he can retaliate by removing people from their prestigious positions. Andy Harris is on the appropriations committee, one of the most powerful committees. However, we did not vote for Andy Harris so that he could protect his political power in DC. We voted for Andy Harris to stop the Obama agenda. Boehner has been completely ineffectual in stopping Obama.

Sadly. John Boehner is the kind of leader who would be so petty as to punish conservative opponents – whose constituencies are the backbone of the Republican Party – so he’s no leader at all. If only he would exhibit the same backbone to the opposition. It will be worth checking out what happens to the 25 Republicans who did not support Boehner – locally Rep. Scott Rigell, who represents the Eastern Shore of Virginia, was among those opposed.

As for Harris, the questions have to be asked: is this the first major signal of the slide toward the center exhibited by those who have become comfortable inside the Beltway? And how much of an effect will it have on his 2016 prospects? It’s early but if there’s a sentiment underneath the surface that says a more conservative alternative would get the grassroots support that is needed to overcome Andy’s financial advantage – basically, that campaign would have to begin in the next few weeks given the 2016 primary is tentatively scheduled for April 5.

It’s clear that in its current configuration the First District is a Republican stronghold as Harris won in 2012 with 63% of the vote only to breach the 70% threshold in November – yet against a completely unknown, underfunded, and outclassed opponent Harris got just 78% of the primary vote in 2014. (Harris was unopposed in the primary in 2012 and beat Rob Fisher with 67% in 2010.) So Harris does have his detractors and hasn’t faced a “name” Republican opponent since his primary win (with 43%) over then-Congressman Wayne Gilchrest and fellow State Senator E.J. Pipkin.

There’s also been the sentiment that the Eastern Shore needs “one of ours” in the House. While Harris is not a stranger to the Eastern Shore, one part of the reason we were represented by Frank Kratovil for two years was Frank’s successful case that he had “Eastern Shore values” because he lived here (albeit as a come-here who lived almost within sight of the Bay Bridge.)

Perhaps the two saving graces that Andy will have is distance from the election and the slight chance that Boehner figures out the reason we elected more Republicans to the House. But that light you might see looking toward Washington is that of a whole lot of bridges burning.

So what is the New Fair Deal?

If you are one of those who follows conservative grassroots activism, it’s likely you may have heard about the New Fair Deal rally being held in Washington tomorrow afternoon to coincide with tax day. While it will certainly be a modest event by the standards of other TEA Party rallies such as the 9/12 rally in 2009 or various Glenn Beck-led gatherings since, organizers believe a few thousand will attend with many staying around after the speeches to buttonhole various members of Congress about this new legislative program aimed at reining in government.

But the better question is: what is the legislative program? The four planks can be summarized as follows:

  • No corporate handouts
  • A fair tax code
  • Stop overspending
  • Empower individuals

The eight Congressmen who will be authoring the legislation in question, some of whom are among the most libertarian Republican conservatives in Congress, are Reps. Jeff Duncan and Mick Mulvaney of South Carolina, Jim Jordan of Ohio, Doug Lamborn of Colorado, Tom McClintock of California, Mike Pompeo of Kansas, Dr. Tom Price of Georgia, and Reid Ribble of Wisconsin. Mulvaney, Pompeo, and Price are among the speakers tomorrow at the event, which will also feature Rep. Justin Amash of Michigan, Senator Mike Lee of Utah, activists Rev. C.L. Bryant, Deneen Borelli, Julie Borowski, Ana Puig, and Maryland’s own Dan Bongino. Borelli is featured in this video decribing some of the features of the New Fair Deal.

“The New Fair Deal is a four-part legislative package that ends corporate handouts, closes loopholes in a simple tax code, balances the budget, and empowers Americans with the choice to opt-out of Medicare and Social Security,” explained FreedomWorks president Matt Kibbe. “Individual freedom, economic empowerment and equal opportunity are the ultimate fair deal for Americans. No more pitting us against each other while politicians and big business pick winners and losers in the marketplace at the expense of everyday individuals,” he added.

It goes without saying, though, that the devil is in the details. For example, ending corporate subsidies is great for avoiding the next Solyndra or Ener1, but my friends at the American Petroleum Institute would argue that the tax package for oil exploration is vital to the industry’s success. They may have a point, so perhaps the best solution is to prioritize which subsidies would be axed first and which ones would have more of a transition. Being a fairly mature industry, it may take somewhat longer for the oil and natural gas companies to deal with these changes, as well as the sugar farmers who were targeted in the video. I could see a time window of three to five years for these industries, but green energy? Cut them off yesterday.

As far as a “fair tax code” I honestly don’t think there is such a thing, particularly with the proposal of a two-rate system as specified. I like the idea of a “skin in the game” tax where everyone has to pay at least 1 percent (for someone making $20,000 a year that’s $200 – not a back-breaker if you know it’s coming) but I disagree with the progressive rate change from 12% to 24% at $100,000. If we are to have a flat tax, it should be one rate regardless of income. Why would I take the overtime which would push me from a salary of $98,000 (and an $11,760 tax bill) to $101.000 only to have that and much more – since the tax bill would steeply jump to $24,240 – entirely eaten up by taxes? I understand the populist idea of the secretary paying less than the billionaire, but the solution proposed would be ripe for complication because of situations like the above. I’d rather work on repealing the Sixteenth Amendment and creating a consumption tax, which would be the most fair of all because one can control their level of consumption to the greatest extent.

Another area which suffers from being too broad is the concept of “overspending.”  Even if you cut off all discretionary spending tomorrow we would still have a deficit. Yes, we do need to eliminate the concept of baseline budgeting posthaste but we also have to lose the mindset which makes people fear their budget will be cut if they don’t spend their full allocation. While thousands and thousands of federal workers are superfluous to the task of good government, we have to educate the public as to why they need to be let go – you know the media will be portraying them as victims just like they tried to make a huge case that sequestration would be devastating.

Of the four planks presented, though, I really like the idea of the last one as expressed – the power of determining your own retirement and health care needs. In just 14 years I will be eligible for Social Security, but to be quite honest I don’t expect a dime from it because the system will be bankrupt by then in my estimation. (My writing was intended to be my “retirement” but real life intruded a little more quickly than I imagined it would.) The same goes for Medicare. If I had the choice, I would tell the government to give me back the money I paid into Social Security and Medicare – let me decide how to invest it best. This legislation may well allow me that option, although I suspect it will be tailored more to those under 40 who still have plenty of time to weigh all their retirement choices.

(Remember, though, I am on record as saying “Social Security should be sunsetted.” Nothing they can propose would eliminate that stance.)

The key to any and all of these changes taking place, though, is to remember none of this happens overnight. As it stands right now, the earliest we can make lasting national change in the right direction is January of 2017. Moreover, these Congressional visionaries and any other allies we may pick up along the way will be standing for election twice before a new President is inaugurated – and if the Republicans nominate another milquetoast “go along to get along” Beltway moderate who doesn’t buy into this agenda, the timetable becomes even longer.

But there is an opportunity in the interim, though. What statement would it make if Maryland – one of the most liberal states in the country according to the conventional wisdom – suddenly elected a conservative governor and confounded the intent of the heretofore powerful liberals in charge by electing enough members of the General Assembly to foil their overt gerrymandering attempts? No doubt it’s the longest of long shots, but let the liberals think they have this state in the bag. Wouldn’t it be nice to watch them fume as a Governor Charles Lollar, Larry Hogan, Blaine Young, or Dan Bongino is inaugurated – this after the stunning ascension of Speaker of the House Neil Parrott and President of the Senate E.J. Pipkin? Those who survived the collective hara-kiri and cranial explosions throughout the liberal Annapolis community would probably be reduced to bickering among themselves and pointing fingers of blame.

Our side often points to Virginia as a well-run state, but I think there are even better examples to choose from. Certainly there would be a transition period, but why not adopt some of these ideas as well as other “best and brightest” practices to improve Maryland and create a destination state for the producers as opposed to the takers?

If this sort of transformation can occur in Maryland, I have no doubt Washington D.C. would be next in line.