Congressmen Defend Ethanol

Members of Congress are exchanging dueling fact sheets about corn ethanol and the Renewable Fuel Standard (RFS2).

Congressman Bob Goodlatte (R-VA) sent an email last month to members of the House Commerce, and Agriculture and Energy Committees calling the RFS “a de facto mandate for corn ethanol” and urging members of the House Commerce, and Agriculture and Energy Committees to provide relief from alleged “unintended consequences” of the RFS. The email included a “fact sheet” blaming the RFS and corn ethanol for “wasting taxpayer money and harming consumers,” “driving more people into hunger and poverty domestically and abroad” and failing to make any progress toward energy independence for the nation.

In response, Congressmen John Shimkus (R-IL) and Collin Peterson (D-MN) sent out their own email and their own fact sheet citing the successes of the RFS and disputing claims in the Goodlatte letter.

Noting that the intent of the RFS is to “enhance energy security, reduce consumer fuel prices by diversifying our energy portfolio, create jobs and stimulate economic activity, and improve the environment” the congressmen said that “by any measure, the RFS is achieving these goals and providing tangible benefits to the American public.”

The Shimkus-Peterson fact sheet takes on each claim in the Goodlatte letter, referring to them as “abusrd” and “false and misleading” and “red herrings.” In particular, they dispute the notion that the RFS has done nothing to increase energy independence.

“In 2011, ethanol displaced the need for an amount of gasoline refined from 477 million barrels of crude oil—that’s more oil than the U.S. imported from Saudi Arabia,” they wrote. “Indeed, as a result of the RFS and increased ethanol use, U.S. oil import dependence has fallen below 50% for the first time since 1997. In 2005, the year the first RFS was passed by Congress, U.S. oil import dependence peaked at 60.3%. Subsequently, as ethanol production has ramped up, oil import dependence has fallen steadily and hit 45% in 2011, the lowest since 1994.9 Oil imports from the Persian Gulf have dropped by some 300 million barrels since 2001, while ethanol production has grown by 300 million barrels during that same period.”

National Corn Growers Association president Garry Niemeyer thanked Representatives Shimkus and Peterson for working to disseminate factual, accurate information about corn ethanol. “These distinguished Representatives demonstrated that they understand what corn growers have long known; corn ethanol provides important benefits to our economy, our energy security and to our environment,” he said.

4 thoughts on “Congressmen Defend Ethanol

  1. GOOGLE: Prop 87 (510) 537-1796

    Bill Clinton, Al Gore & Senator Obama supported the California 2006 Prop. 87, a GMO corn ethanol welfare program.

    Bill, Al, have changed opinion on the ethanol mandate, I wonder if Obama will make this the time for CHANGE?

    I support a waiver of the ethanol mandate, voluntary use of ethanol in my gas.

    Federal ethanol policy increases Government motors oil use and Big oil profit.

    It is reported that today California is using Brazil sugar cane ethanol at $0.16 per gal increase over using GMO corn fuel ethanol. In this game the cars and trucks get to pay and Big oil profits are the result that may be ready for change.

    We do NOT support AB 523 or SB 1396 unless the ethanol mandate is changed to voluntary ethanol in our gas.

    Folks that pay more at the pump for less from Cars, trucks, food, water & air need better, it is time.

    The car tax of AB 118 Nunez is just a simple Big oil welfare program, AAA questioned the policy and some folks still agree.

    AB 523 & SB 1326 are just a short put (waiver) from better results.

  2. The Shimkus Peterson letter is full of a bunch of academic non-sense funded by the ethanol lobby. I could find a study to support allowing insider trading in financial markets. The $800 savings supposedly resulting from ethanol usage is a bogus argument that 5th grade math can disprove and overstate savings by at least 9x.

  3. My comment appears to have been deleted. The $800 savings detailed in the Shimkus-Peterson response letter is based on savings figure of $0.89 savings per gallon for E10 over E0. E0 futures and ethanol futures are traded on the CME. With a spread of $0.85 between a gallon of ethanol and a gallon of RBOB, at a 10% mixture, the most the consumer would save is 8.5 cents per gallon implying the figure use by the Senators is 947% over-stated (.89/.085-1). Of course refiners and/or gas station owners don’t sell E10 for fun; they sell it because they can earn more money by keeping some of that savings for themselves so the 8.5 cents is the max the consumer saves and likely less.

  4. Wall(eus)

    You obviosuly never read the study that came up with the 89 cent savings figure. You can’t just look at the difference between ethanol and gas prices and say that’s what the savings is. You have to look at what effect ethanol has had on oil refining by reducing the demand for oil. that’s where most of the price impact comes into play. reduce demand for oil and gas prices fall. i think they taught supply-demand in 8th grade, so your 5th grade math class may not have brushed up on that one.