Ag Policy Blog

AP Piece Hacks Away at Ethanol Policy

Chris Clayton
By  Chris Clayton , DTN Ag Policy Editor
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I spent some time Monday listening to a couple of bankers from North Dakota talk about the impacts of the Bakken shale oil development while I watched the emails flow about the Associated Press article declaring that the push for ethanol has led to disastrous outcomes.

I could write a piece about the Bakken development that would take the same approach with oil and natural gas development in North Dakota that the Associated Press did with ethanol in Iowa.

Virgin ground in North Dakota is being dozed, backhoed and drilled so we can release more fossil fuels into the air. As much as 35% of the Bakken natural gas is flaring into the sky, so much so the flaring looks like the lights of a major city from space. That flaring alone releases the same amount of greenhouse gas emissions as adding one million cars to the road. One county in the middle of the Bakken boom has seen its landfill go from collecting 10 tons of trash a day to 900 tons a day. The annual fresh water demand of the Bakken field is 25,000 acre feet annually. Then there is the salt water -- and whatever else is in it -- that is then pumped back into the ground when the drilling is done. The semi-truck traffic alone takes a toll. One town of 200 people now sees an average of nearly 22,000 semi-trucks passing through every single day.

I could go on digging up the negative statistics on the Bakken development, but that's not my argument. The Associated Press reporters wrote their piece to effectively state that ethanol has no redeeming value. Reporters and editors who live in Washington get to tell those of us in the Midwest about how we screwed up the land they like to flyover. AP put out a press release to pump up all its members to make sure they use the stories.

"We want our investigative reporting efforts focused on topics that truly matter to people, that touch lives and that can provide information of real value to our members and customers and their audiences,” said Washington Bureau Chief Sally Buzbee. “The unintended consequnces (consequences) of green energy, when it comes to a program like ethanol, is truly one of those topics.”

The boastful attitude about the reporting fails to grasp what I sought to point out with the Bakken comparison: We have no perfect energy source. We don't solve energy problems, we only change them.

Ethanol, like any energy, fits that mold. Is soil erosion a problem in Iowa because of corn? Yes, too many farmers are leaving that ground bare and tilling largely because they want to use that iron. Do we have water quality problems? Yes, we do. Can these issues be fixed? Yes, they can.

The story states "What was once billed as an environmental boon has morphed into a government program to help rural America survive." Survive? How about contribute to a revitalization of rural America? What about farm income? Farm subsidies? Land values? How about jobs? AP didn't point out how states with high ethanol production were largely insulated from the recession. In 2009, when the U.S. unemployment rate peaked at 10%, the unemployment rate in Iowa was 6.4%.

AP laments the loss of Conservation Reserve Program lands to production.

"In the first year after the ethanol mandate, more than 2 million acres disappeared. Since Obama took office, 5 million more acres have vanished." If you just read the piece, you would be convinced that Iowa is plowing up all its CRP acreage. Since 2008, Iowa has gone from 1.8 million acres in CRP to 1.5 million.

Of that 5 million acres of CRP ground that came out of the program, 2.2 million of those acres came from just four states. Montana, Kansas, Texas and North Dakota make up the bulk of acreage that has shifted from CRP since the beginning of 2009.

Incidentally, CRP now is about 29 million acres. That's akin to the same amount of farm ground lost to urban sprawl ever since CRP was enacted. Vanished.

The ethanol-is-bad story also masterfully paints what AP sees as the flaws in accounting for greenhouse-gas reductions. AP gets into the weeds of greenhouse-emissions accounting to conclude ethanol has lower emissions than burning oil, but apparently not enough to make a difference. Ethanol also doesn't produce enough fuel to wean us off oil, but we make too much of the alcohol to feed the cattle.

The article ignores efforts in the industry to lower ethanol's carbon footprint even further. Some ethanol plants have big plans to sell more into California's low-carbon market, which has tighter standards than EPA.

The article does little to acknowledge we have barely scratched the surface of potential for biofuels. At least three cellulosic plants will come on-line in the next year.

The article points out nearly 5 billion bushels of corn goes to produce ethanol, but doesn't mention distilled grain from the fermentation to feed livestock. It's almost as if the reporters didn't grasp the concept.

The AP report did not touch upon any positive developments of biofuels. It didn't tell the story of a boutique fuel that now has captured 10% of the marketshare from petroleum at the pump. Is there any other renewable energy source out there with 10% marketshare nationally? Anything close?

Perhaps what is most annoying about the AP piece is that it goes nowhere for solutions. OK, geniuses. If you don't think ethanol is worth America's time, what energy should we be running vehicles on? Are we so willing to quit developing renewable energy and simply go back to just burning petroleum? I understand there is more oil coming out of North Dakota you can report on.

You know who is going to be thrilled to distribute the AP story to every member of Congress? The American Petroleum Institute.

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11/22/2013 | 6:40 PM CST
Lets see we needed an oxygenate to put in gas to make it burn cleaner, so we used MTBE and ethanol so people cold drive to work in the cities instead ride public transportation. Okay, MTBE went into soil and pretty much stayed their, this was not good. Ethanol burns and does contaminate the soil after getting almost 3 gallon of fuel from the starch in a bushel of corn we 20 to 30 pounds of cattle feed. You can not get as much from soybeans on a per acre basis. You could get suburbanites to take public transportation or move back to the inner city which worked so hard to get out of, they are easier to control that way. Obama has expressed his desire for that several times. Lets face it someone is going to plant something on those acres if nothing else just to pay the taxes. And to the great minds who tell us mere mortals what to do reality sucks SORRY!
Wesley Kuster
11/20/2013 | 7:07 AM CST
Smarter Fuel Future - RFS Policy Disaster Beginning with a mandate for cellulosic ethanol that does not exist, refiners are forced to buy credits for a fictitious product. Ultimately, these costs have become an added gasoline tax passed on to consumers. As for biofuel production that does exist, lax EPA oversight of Renewable Identification Number (RIN) purchase and trading has created a system that is susceptible to fraud. And who foots the bill for this mess? The American consumer and taxpayer. A Product That Doesn�t Exist, A Mandate That Can�t Be Met Under the RFS, the EPA required that 16 billion gallons of cellulosic biofuels be blended into gasoline. The problem? Cellulosic biofuels do not exist for commercial purchase. This was confirmed by a 2011 National Research Council study that stated, �Currently, no commercially viable biorefineries exist for converting cellulosic biomass to fuel.� No one disputes that cellulosic biofuels production is nowhere close to commercial production levels. Yet Congress still has not revised unrealistic RFS mandates, and the EPA continues to impose fees on refiners for not meeting them. In light of production challenges, the EPA significantly reduced the 2010, 2011 and 2012 cellulosic biofuel requirements�but the mandate still requires refiners to blend more than 8 million gallons of nonexistent cellulosic biofuel this year. The RFS requires companies to blend cellulosic biofuels or be forced to buy waiver credits (or pay a fee) for failing to blend the product. Because there is zero cellulosic production, and thus no alternative but to pay the fee, this has quietly turned into a revenue-raising device for the government. Fraudulent Activity Beyond cellulosic mandates, RFS also sets a mandate for biodiesel fuel. While biodiesel is available for commercial purchase, many refiners also purchase Renewable Identification Numbers (RINs)�renewable fuel credits associated with each gallon of fuel�from biofuels companies to comply with EPA�s mandate. Some biodiesel companies have sold fraudulent credits to unsuspecting companies, even though they produced no biodiesel. Since last November, the EPA has accused multiple companies of selling RIN credits without producing the volumes of biodiesel that the credits were supposed to represent. A few examples: Maryland�s Clean Green Fuel sold more than 32 million fake credits. Absolute Fuels of Texas sold more than 48 million fake credits. Green Diesel LLC sold more than 60 million fake credits, the biggest batch so far in the agency's probe. Cumulatively, these fraudulent RINs constitute between 5 to 12 percent of all biodiesel RINs in the marketplace.The EPA is rightfully faulting the fraudulent sellers, but the Agency has wrongly adopted a �buyer beware� stance and issued �notices of violation� to 22 companies that unknowingly bought and used the fake RINs to comply with the RFS. The EPA has collected significant fines from these defrauded companies�in essence, punishing the victim. Consumers and Refiners Unfairly Punished Refiners are now stuck between a rock and a hard place. They are required to blend a nonexistent product�cellulosic biofuels�and have to pay a fee to the government because it does not exist. They are also required to purchase biodiesel RINs that may turn out to be fake, despite refiners' best efforts to verify authenticity. If RINs are found to be fake, refiners must pay a fee as punishment and purchase more RINs with no way of truly verifying authenticity. These added costs�estimated at $200 million for RIN fraud alone�are passed on to consumers, making the cellulosic and biodiesel mandates an invisible tax at the gas pump. Instead of imposing unreasonable mandates that punish refiners and spur fraudulent activity from biofuels producers, the government should allow consumer choice and the free market to determine fuel use.
TX Tumbleweed
11/18/2013 | 1:20 PM CST
Good grief, could we PLEASE be allowed the courtesy of 'paragraphs'.
TX Tumbleweed
11/18/2013 | 1:10 PM CST
<i>The American Petroleum Institute, </i>will be <i>thrilled...</i> Please avoid the sour grapes. It makes us sound juvenile, like little boys in the back seat of the DeSoto, on the way to shop for school clothes. "Mommie, he hit me." I'm wondering how it is that land behind corn production is "bare". GMO hybrid's corn stover seems to be Teflon coated, here in arid Texas. We are wearing out disk plows that had been mothballed for years, attempting to break it down, with NO consequential wind erosion as a result Just wait until this new push by the Mississippi Watershed What'cha'ma'callit gets us by the ear, and slowly jerks us through the knothole. That will be something to truly whine about. . The story yet to be written is not farmers conservation practices, it is how the ethanol industry fumbled the ball on the PR front concerning ethanol. Like the GMO war, our friendly chemical providers failed to see coming, ethanol producers failed to see, hear or feel the incoming salvos for at least five years. Sadly, at this point, that battle is most likely unsalvagable. Will we ever learn? AP didn't report the positive factors of ethanol production because public sentiment is now anti-ethanol. AP feeds the consumer what they want to hear. It's not a new concept, I see it in the Ag press all too often too. How about WE get back to some semblance of unbiased reportage, after which we will have a leg to stand on in complaining of their bias? NO props whatsoever for ethanol's 10% national market-share. It was mandated, not earned. It caused a false sense of security, industry wide. Cry me a river! What gub'ment giveth, gub'ment taketh away. Compete, compete, compete! Capitalism is the name of the game. Non-farmers are not necessarily too sympathetic with the plight of their rural cousins, especially after Thanksgiving and Christmas, when so many of them visit us to witness that those who chose to stay on the farm are doing better than they, with their high-power white collar 'positions', pristine suburban lives and 1.? organic-fed, soccer-playing, budding genius progeny. By leaving rural America they truly believed they would have a better life than those of us who stayed put. Seeing that they were dead wrong is hard for a good many of them to swallow. Sibling rivalry, run amok, even competition among distant kin. Be gentle, and don't 'put on the dog' too much during the upcoming season. We need their votes.
melvin meister
11/17/2013 | 11:34 PM CST
Wes please stop posting on ethanol as I am sure that most of Chris's readers have many more things to do than listen to your spoon fed lies.
Bonnie Dukowitz
11/17/2013 | 7:24 AM CST
Wrong Jay, We have been using a 10% ethanal blend since 1983 or 1984 from the local station. The big push started during the Carter years as a result of the OPEC ordeal.
Jay Mcginnis
11/14/2013 | 1:57 PM CST
Hate to tell you Wesley but ethanol was George Bush's brainchild.
Wesley Kuster
11/14/2013 | 7:12 AM CST
Like obamacare, the corn ethanol mandated usage schemes have been built on lies, fraud, and the pillars of corrupt cronyism. Is it any wonder that support for both is rapidly evaporating. There are issues Curt that are more important than more money and more government benefits for certain select farmers.
Curt Zingula
11/14/2013 | 6:16 AM CST
Thanks John Finley for trying to bring our attention back to the AP (A Problem). The AP told out right lies against farmers for economic gain and that's no lie! This probably won't be the last time - it wasn't the first. When geologists determined that silt in lake Pippen in Minnesota was due 75% to stream bed and stream bank erosion, the AP titled the story, "75% Of Silt In Lake Pippen Comes From Farm Country". When someone (AP) treats you with disrespect, the dumbest thing you can do is turn on your allies.
Gene Tyler
11/13/2013 | 6:26 PM CST
Do you really think Don that anyone believes you are concerned about what is in the best interest of Red Staters?
Don Thompson
11/13/2013 | 12:05 PM CST
I believe Wesley Kuster blogged previously on this site as John Olsen, Sally Bensen, and others. Same old message, however. Possibly a disciple of Koch brothers/ Petroleum Institute, maybe an organized effort participant? Not in the best interests of Red Staters.
melvin meister
11/13/2013 | 10:53 AM CST
Wes; Your info links are thrash M Malkins HOTAIR Blog to be your source of info has got to be the last straw.Stop comenting on Ethanol as facts seems to escape you.
Wesley Kuster
11/13/2013 | 7:34 AM CST
Wesley Kuster
11/13/2013 | 7:22 AM CST
11/12/2013 | 2:07 PM CST
No too bad for you Wesley Kuster. All you did was point out some more crops that can be grown. Good for you. Please pat yourself on the back. Why don�t you do some research and see just what this �marginal� land was used for before corn. Was it edible beans, canola, sunflower, alfalfa, peas, etc.? I would guess most was either CRP, which nothing is grown, or pasture land for cows. Oh, and I said that cows can be feed DDG�s made from ethanol production. I guess I should include goats, sheep, llamas, buffalo, chickens, pigs, etc. could be raised on this land. I can play this game too. And I am sure that this ethanol policies paper you mentioned is 100% unbiased and contains no lies or exaggerations. Is ethanol the best alternative fuel? I don�t know, but probably not but it is a start and with new technology we can find better. Also, you need to reread my post. I did not write about ethanol and any effects on the environment just addressing your issue with food for fuel and insurance. If the land was fallow before but now is in corn production then it cannot be used in the food for fuel argument, except for it �could� be used. And don�t forget, DDG�s are a byproduct of ethanol production which is fed to animals that we eat, therefore 100% of ethanol corn acres are not removed from the food chain. And one more point you need to think about is the land in question that is used to grow corn for ethanol is owned by someone. You must get that someone, company, etc. to grow (or lease out the land) to grow these food crops you mentioned. In other words, someone must be willing to produce these crops and make a living. I don�t know if you are aware of this but farming is hard and very expensive and having a crop like corn that farmers can depend on for an income is not bad. I will end with this, why don�t you go to the Midwest and start growing food crops you mentioned on land that is currently used for ethanol. Go out there and see just how easy/hard it is to farm. I wish you luck.
John Finley
11/12/2013 | 1:40 PM CST
Boys and girls, please fight the AP writers and the non-farming public not each other! There is enough time to disagree about many farm issues however put your effort towards your town, church and non-farming friends to tell them the positive facts about agriculture, today.
Wesley Kuster
11/12/2013 | 1:01 PM CST
More info for the ethanol groupies - see
Wesley Kuster
11/12/2013 | 12:58 PM CST
Too bad Kevin King that you have never heard of wheat , oats, barley, rye, edible beans, canola, sunflowers, alfalfa, peas, etc. You are right about not being an expert. Maybe you are spending too much time in the tropics.
GWL 61
11/12/2013 | 9:25 AM CST
As long as we still have internal combustion engines oil will lead the way as our fuel of choice. Ethanol is only going to have a tiny share of the market, lets face it, if it was that great of product more people would use it. DDG's and WDG's for feed is not feed of choice for everyone, so it can't be considered corns replacement either, corn is feed of choice as well. I often wondered though, with all the chemicals and acids that are used in the ethanol process, if there have been many studies done on its residual effects in the bi-product, over the years how many other things have been linked to unhealthy side effects of producing feeds? With ethanol still in its so called '' INFANCY'' it may be along time before any of us now how good or bad ethanol was.
11/12/2013 | 9:23 AM CST
Come on Jay, just city and state. OK?
melvin meister
11/12/2013 | 9:19 AM CST
Great article Chris .I am sure AP found all the so called experts API steered them to.
Curt Zingula
11/12/2013 | 7:34 AM CST
For once Jay and I agree. Ken Cook, President of the EWG, has stated that development is the biggest threat to our environment in terms of its effect on water quality, wildlife and its impact on farming. Come to think, its one of the only statements from the EWG I agree with also!! In my area of Eastern Iowa, we watch development consume prime land with no regard to future food production. That land is destroyed FOREVER (or at least until the next ice age), unlike land supposedly taken for corn production.
Neal Turner
11/12/2013 | 7:32 AM CST
Tell me the reason behind the CRP program. If you never plan on using that ground , what is the reason for conserving it? I have CRP ground next to me that hasn't been farmed for 30 years. They don't have to brush hog it anymore for some reason. I suppose so the money people who has the ground don't have to spend any of their money to do that. When they first came out with the program you had the mow it yearly or every other year. It is not like the weeds quit growing on that ground. It grows multfora rose brushes and trees good too. The out side of the fields keep growing in so it makes the fields smaller but were're conserving soil. For what? They lease the ground out for hunting to about half dozens guys for about 8000.00 a year for around two hundred some acres. So they can hunt for that big set of horns. Not for does that we should be controling." So they don't grow any crops on this ground becausing we are conserving soil on this ground" So the deer eat on me and go back and stay on the conserved soil ground where it is safer. So remind me again why the CRP program is a good program and why we need it. If we farm right we can take care of it.
11/12/2013 | 7:30 AM CST
Mr. Kuster, I am not an expert but want to respond to a few of your comments. Corn for ethanol in marginal production areas. Well, that is relative because where I farm would be considered "marginal" compared to Iowa. Also, crop insurance is based on the yields of that field/farm number. In other words if that field only has a proven history of 80 Bpa then it will not receive insurance money because it did not produce 200 Bpa or 120 Bpa. The farmer will only receive payment if yields are below 80. Also, more corn for ethanol means less acres for food production. What do you think will be grown on this "marginal" land. Apples, grapes, bananas, carrots, tomatoes? The only other thing this land might be used for is pasture or CRP (where nothing is grown). If you meant pasture land then yes cows can be raised on it and meat produced. However,ethanol production has a by product called DDGS (Dried Distillers Grains) which is feed to cows. You can Google that yourself. Remember, "good" land was already in corn or soybean production to begin with so the extra acres must come from "marginal" land. Anyway, I much rather have more ethanol acres than more Bakken developments
Curt Zingula
11/12/2013 | 7:24 AM CST
Great article Chris! Loved how you summarized ethanol's talking points and how they've been lied about!! You have to be frustrated though when people like Wesley let good information go in one eye and out the other. In 2008 I was interviewed by NBC - supposedly about the planting delays in Iowa causing grief for farmers. Shortly into the interview, I was asked my thoughts about these delays and ethanol consumption causing food shortages. Despite the same question asked repeatedly, I refused to go there and support their scare mongering. My favorite media lie came from ABC when their reporter walked along fence line bunks declaring that ethanol was causing corn shortages (5 billion bu. on hand at the time) so farmers were resorting to feeding wheat. Lions and Tigers oh my!! BTW, my research found that corn exports were up from 2001 to 2011 and when DDG's were added, up considerably.
Jay Mcginnis
11/12/2013 | 7:22 AM CST
The creates problem is suburbia, the gem of the "American dream". Suburban sprawl is unsustainable and the energy taken to support it environmentally crushing. The amount of oil in North Dakota is equal to 2 years of the worlds demand for the stuff but there is a glut now from there but this will pass quickly. The world needs 900 million barrels per day to keep up with demand, how much more will we need to insure China builds its suburbia? I like that the article points out that as much land was consumed by sprawl as land now in the CPR, there is your problem but the whole of our society refuses to look at that elephant, instead point to ethanol? The article is sobering as well, we are in effect destroying our environment to maintain suburban sprawl and all the tracking, tar sands and deep water drilling will quicken our demise, we will choke in our carbon cesspool with more super storms, more droughts and a landscape not fit to live in. Nice vision the American Petroleum Institute wants to maintain!
Mark KIngma
11/12/2013 | 6:59 AM CST
Sounds like Mr Kuster had that statement prepared. Part of the AP media blitz. Don't drink the kool-aid people.
Wesley Kuster
11/12/2013 | 6:37 AM CST
1. We all know the corn ethanol racket is a political cesspool which needs government mandated useage to survive. 2. We all know more efficient ways of producing ethanol exist and that corn ethanol is very inefficient. (energy received versus energy expended) 3.Corn for ethanol in marginal production areas is still less efficient and only the billions expended with crop insurance schemes allow it to continue. 4. Mandated useage of ethanol is a corn price increasing racket that drives more acres into corn production that results in less food producing acres for people. 5. Increasing food prices resulting from less acres available for food production drives more people on food stamps. 6. Oil development has produced opportunities for people to rise above food stamp dependency.
Bonnie Dukowitz
11/12/2013 | 5:47 AM CST
Good article Chris! " We have no perfect energy source." Profound statement! Part of the problem is that too many think they have the answer and everyone else is guilty. Just think, if everyone would reduce and conserve 10%, demand would diminish by 10%. If there was not so many enviro's preventing gas pipelines, powerlines etc. much of the huge torches could translocated to where it could be utilized.