A Busy News Day
Today has been full of news relevant to the ethanol debate. The busy news cycle kicked off this morning with front-page articles in both the New York Times and Wall Street Journal. It then continued to build with a mid-day conference call organized by opponents of the domestic ethanol industry’s new attempt at a unified legislative proposal (policies we described last week). Here’s a quick recap of with related links.
Today has been full of news relevant to the ethanol debate. The busy news cycle kicked off this morning with front-page articles in both the New York Times and Wall Street Journal. It then continued to build with a mid-day conference call organized by opponents of the domestic ethanol industry’s new attempt at a unified legislative proposal (policies we described last week).
Here’s a quick recap of with related links. It’s too early to tell whether these developments will be true “game changers,” but they are certainly making the run-up to a climactic lame-duck session next month all the more interesting.
Corn Ethanol CEO Funds Secret Attack Group
A front-page New York Times investigation finds that the co-founder and chief executive of one of America’s larger ethanol companies is a force behind the American Future Fund, a conservative organization based in Iowa that raises money from anonymous donors and uses it to attack congressional candidates. The article describes Bruce Rastetter, head of Hawkeye Energy Holdings, as “an outspoken advocate for ethanol, helping to start a new trade group, Growth Energy, that supports its increased use at fuel pumps and tariffs on foreign producers.”
While the American Future Fund’s stated mission is to target liberal spending policies and provide Americans with a conservative and free market viewpoint, the New York Times finds “its activities also seemed to dovetail with the interests of the ethanol industry.” Though the reporters admit that “[s]orting out the Future Fund’s motivations is hardly straightforward, given how complicated the politics of the heavily subsidized ethanol industry have grown in recent years.”
In a move that “seemed odd for a group promoting free-market principles,” the American Future Fund ran radio advertisements targeting the Indy Racing League. The ads “attacked a deal the racing association struck to power Indy cars with sugar-based ethanol from Brazil, portraying it as a slight to Americans.”
Yes, Brazilian sugarcane ethanol is a major sponsor, but if you’ve seen our Indy ads, you know we’re promoting a message the Future Fund should support – the value and consumer benefits that come competition in a free market!
Corn Prices Hit New Highs
Meanwhile, the Wall Street Journal’s front page focuses on the recent surge in corn prices with an article titled Farm Belt Bounces Back (subscription required). “Major agricultural commodities continued their extended run-up in price, underscoring how much of America’s farm belt is booming even as the overall economy continues to struggle,” the article starts. The Journal quotes one analyst who says that the “farm economy is coming out of recession far faster than the general economy” and cites USDA data that net farm income will “climb 24% this year to $77.1 billion, the fourth highest ever.”
The article finds that one long-term factor behind this price spike “is the biofuels industry, which consumes roughly a third of the U.S. corn crop – buoying prices – and has government support behind it.” Certainly makes you wonder if this industry still needs a $6 billion tax credit and trade protection? Turns out, Professor Bruce Babcock called it right.
Environmentalists & Business Groups Oppose New Ethanol Industry Proposal
Finally, a diverse coalition of environmental groups, business associations and budget watchdogs hosted a conference call this afternoon rejecting the ethanol industry’s new proposal and instead urging that all subsidies expire as planned later this year. In essence, the groups argued that what the domestic ethanol producers have been billing as reform is really just a new and expanded form of subsidies they’ve received for 30 years. The one thing that Patrick Boyle of the American Meat Institute praised about the proposal as a “positive development” is the fact that ethanol producers finally call for the import tariff to expire. Look for media coverage to come, but in the interim, you can listen to the 45-minute conference call.
And stand by for more news – possibly as soon as tomorrow. We understand the ruling on E15 is imminent.