The most sensible piece of legislation I ever saw during my time in Washington was the Farm, Ranch, Equity, Stewardship and Health Act in 2007.
Authored by the late, great Hoosier Sen. Richard Lugar, the creatively acronymed FRESH Act would have ended commodity programs in favor of a broader crop insurance program. Rather than the government shoveling money on the crops it picks to win, it would have simply compensated farmers to offset losses during bad years.
Of course, this piece of common sense never went anywhere. And why?
Because it would have hurt large farming corporations in Iowa, and every Senator who thinks he can one day be president wants to be able to say they’re helping farmers in the Iowa caucus. That vagary of our electoral process has fundamentally warped our attitude toward one commodity in particular — corn — to the point that no intelligent debate can be had.
At least that’s what I thought in 2007. Here’s hoping that where it comes to one corn excess, Washington will be able to move in the right direction.
Up for renewal right now is the Renewable Fuel Standard (RFS), a federal program born in 2005 that requires transportation fuel sold in the U.S. to contain a minimum volume of renewable fuels. Its stated goals back so long ago were to 1) reduce reliance on foreign petroleum products and 2) move industry toward cleaner fuel sources. These are both terrific goals. The RFS has failed on both.
Energy production in the United States is better than it’s been in 75 years, thanks to the boom of shale oil and fracking industries. Even the climate hand-wringers at The Los Angeles Times were forced to admit, “The shale revolution has transformed oil wildcatters into billionaires and the United States into the world’s largest petroleum producer, surpassing Russia and Saudi Arabia.” Ethanol has not contributed to this new age of energy independence, and can only compete with fossil fuels in an environment of very high gas prices, according to a 2011 report by the National Academies of Sciences.
Development of ethanol has also been bad on the environmental front.
“Corn ethanol may well be worse for the climate than fossil fuels,” The Atlantic concluded. The increased land use for all this extra corn has required increased application of nitrogen fertilizer, which means more runoff into the Mississippi River, which means more pollutants in the Gulf of Mexico. Sea life is being killed by extra pollution because of ethanol in the Gulf’s hypoxic dead zone.
Despite this bad news, there are reasons to believe that the Congress won’t end the RFS. The current legislative battle mainly concerns the use of hardship waivers authorized by the 2005 law to mitigate the damage of the renewable mandate on small refiners that can’t afford offsets or blend their own ethanol.
Some of these small refiners went out of business under the Obama Administration, which withheld the hardship waivers. The corn ethanol lobby is unsatisfied with the number of these waivers the Environmental Protection Agency has granted in recent years, even though these waivers are a big reason why damage from the RFS mandate hasn’t been much greater. These lobbyists also demand higher volumes on remaining refiners to make up for those that get the hardship exemptions.
These waivers need to stay in place or else the domestic energy industry would be hollowed out, as only the largest refineries can afford the ante in that game of chance with our oil independence. Should the waivers not prove to be enough, lawmakers could also cap the costs of Renewable Identification Numbers, which small refineries can buy from their larger refineries to meet obligations they can’t produce themselves.
Either that or Congress could simply eliminate the RFS mandate entirely. That would undo the economic and environmental damage of our foolish foray into biofuels. But President Trump doesn’t need legislation to gut the RFS. The EPA has enormous regulatory authority to waive statutory targets.
The president doesn’t have to worry about the Iowa caucus next year. He doesn’t have any challengers, and none would be able to mount serious opposition there even if he did. He doesn’t need to operate under the same constraints that so many politicians do, and he can oppose this particular failed experiment in crony capitalism.
Jared Whitley is a long-time politico who has worked in the U.S. Congress, White House, and defense industry. He is an award-winning writer, having won best blogger in the state from the Utah Society of Professional Journalists (2018) and best columnist from Best of the West (2016). He earned his MBA from Hult International Business School in Dubai. To read more of his reports — Click Here Now.
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