Trump's Support for Ethanol Is Bad for Taxpayers and Their Cars

The National Review ^ | January 21, 2016 | Jillian Kay Melchior

[Cincinatus' Wife]

One of the most destructive environmental subsidies in the United States has found an enthusiastic supporter in Donald Trump.

"The EPA should ensure that biofuel ... blend levels match the statutory level set by Congress," he said yesterday in Iowa, adding that he was "there with you 100 percent" on continuing federal support for ethanol. "You're going to get a really fair shake from me."

The ethanol lobby has rigorously courted Trump since April, arranging to speak at least weekly, including at least three in-person meetings, in addition to an ethanol-plant tour, the Wall Street Journal reports.

Trump's support for ethanol may win him votes in Iowa, but federal support for ethanol is a bum deal for Americans.

Under the 2007 Independence and Security Act, Congress mandated that the United States use 36 billion gallons of biofuels, including corn ethanol and cellulosic biofuel, by 2022.

And the federal government not only requires the use of ethanol; it also subsides it. Tax credits between 1978 and 2012 cost the Treasury as much as $40 billion. Moreover, numerous other federal programs, spanning multiple agencies, allot billions of dollars to ethanol in the form of grants, loan guarantees, tax credits, and other subsidies.

Taxpayers suffer in other ways, too. Vehicles can drive fewer miles per gallon using ethanol blends than they would with pure gasoline. So Americans end up spending an extra $10 billion per year for fuel, the Institute for Energy Research estimates.

Ethanol also guzzles 40 percent of the U.S. corn crop, and the resulting scarcity drives up the price of food. This year alone, the Congressional Budget Office estimated, American consumers will spend $3.5 billion more on groceries because of the ethanol mandate.

Rising prices of corn feed have even put some small feedlots and ranches out of business. And as grocery prices increase, so does federal spending on programs like the Supplemental Nutrition Assistance Program.

In a further hallmark of terrible policy, it's probably not even possible for Americans to meet the ambitious ethanol goals Congress and the bureaucrats at the EPA have envisioned.

Ethanol-intensive fuel blends can wreak havoc on car, lawnmower, and boat engines. In fact, many vehicle manufacturers will no longer offer warranties when ethanol comprises 10 percent or more of fuel; engine erosion simply becomes too common.

So, we can't really increase the total amount of ethanol mixed into our gasoline much more, but - especially as vehicles become more fuel efficient - Americans aren't consuming enough gasoline to meet the Renewable Fuel Standards with a 10 percent ethanol blend. The EPA acknowledged this inconvenient mismatch last spring, setting three-year ethanol-use requirements at 3.75 billion gallons below the legal minimums.

Ethanol's green benefit is also far from certain, explaining why even many within the environmentalist Left question - or outright oppose - the federal government's support.

It takes about 29 percent more energy to refine a gallon of ethanol than gasoline, and that process is often fueled by dirty sources like coal. Factor in the emissions generated during this production process, and ethanol sometimes comes in less green than old-fashioned gasoline. On top of that, burning ethanol also emits higher quantities of the chemical compounds that produce smog.

Then again, perhaps it's not surprising that Trump likes federal support of ethanol. After all, the real-estate mogul's business model has historically hinged on using tax abatements and other subsidies to make his building projects profitable.

(An example: As we reported in August, Trump Tower - which features a Gucci store Trump claimed was "worth more money than Romney" - has received a $163.775 million tax break from the city of New York.)

Many of Trump's constituents have rejected the so-called Republican establishment because of its corrupt preferential treatment for Wall Street and Big Business. But Trump's support for ethanol belies his populist Main Street rhetoric. In reality, he's just another rich, East Coast politician who would prop up special interests at the expense of the taxpayer.

-Jillian Kay Melchior writes for National Review as a Thomas L. Rhodes Fellow for the Franklin Center. She is also a senior fellow at the Independent Women's Forum and the Tony Blankley Fellow at the Steamboat Institute.

[HotKat]

I would rather have my car run badly than have to live in fear of a doomed Amercan culture. I am tired of accommodating non English speaking people.

[samtheman]

I would support scrapping the ethanol program.

But let me ask you this:

In what states, post-Iowa, is ethanol an issue in the primary campaign for either party?

NH?
SC?
Florida?
NV?

If not any of them, which super-Tuesday states?

You know the answer: none of the above.

And do you know why, because VOTERS ELSEWHERE LOOK AT THIS AS A SMALL ISSUE IN THE OVERALL CAMPAIGN.

And let me ask you this:

If this is such a big issue, tell me in which year the non-Iowa states (you know, the other 49 states) have made this a big issue on the Senate floor, or on the floor of the House?

2015?
2014?
2013?

Any year in this century?

What about the 90s?

Sure, you can google this issue with regard to congress and get plenty of hits, there have been plenty of proposals, but in which year did congress say: no more ethanol.

After all, Iowa is only 1/50 states. (Notice I am using the 50 number, not the Obama-count 57 number which might change the math somewhat if used.)

The answer is: this issue has NOT been addressed by this country as a whole and everyone just assumes that it is just part of the quirky nominating process in the US to give Iowa their damn ethanol subsidies.

Do I like it? No. Has ANYONE done anything about it? No.

Is it my Number One issue (stacked against things like the Muslim Invasion of the Western world): no.

Is it the Number One Issue of Trump Voters (stacked against things like the Muslim Invasion of the Western World): no.

So Trump is not going to fix this for you, Oh Great Conservative Purists.

Deal with it.

I want a wall.
I want the muslim invasion kept out.
I want an end to ethanol subsidies (but not as much as I want a wall and the muslim invasion kept out).

So go ahead, whine, wail, gnash your teeth, jump up and down, hold your breath until you turn blue... or even something more futile, vote Canadian in the primary... but it won’t change the minds or votes of the broad majority of the Republican voters in ANY of the post-Iowa states.

So deal with it.

[1rudeboy]

Ethanol keeps farming profitable. Bad things happen when farming becomes unprofitable.

Screw the small farmer. You heard it here first on FR. Because Trump.

[Cowman]

or the feds could let go of more oil leases and we could make our own fuel

[Hugin]

Ethanol is about the 98th most important issue facing the country, right between Kelo and Gardasil.

[DanZ]

“Do you have any idea how many Iowa jobs are on the line? I don’t agree with the subsidy,”

Do you know how many TEXAS Oil Jobs are on the Line? - GIVE ME THE $$$

You people are marooons. G’ment subsidies distort the markes

[1rudeboy]

And I shouldn't have to tell anyone this, but I feel I must: government intervention in the economy has unintended effects. In this case, larger farms qualifying for more subsidies gobbling-up smaller farms.

Well done, statists.

[DanZ]

“Paying a higher price for fuel so we can stop funding states that prop up jihadis is a sacrifice we should bare”

NO, you should pay by sending your sons to the Middle East - either he kills the jihadis or he dies there

[Cincinatus' Wife]

"....In one telling moment in Washington, N.H., a young mother of four challenged Cruz about whether he would provide paid family leave. His eventual answer boiled down to nothing: "Politicians love to campaign on giving away free stuff," but, as with the minimum wage, market forces mean such intervention would hurt workers, not help them.

But he leavened this response with personal questions (How old? Boys or girls?) and, believe it or not, empathy: He knows about being the "baby brother with two older sisters"; he understands the "hard challenge" of juggling work and family. The woman may have left unconvinced, but Cruz's deft response revealed a politician both skillful and relatable. The crowd applauded."... Source

[1rudeboy]

Hey, money’s kinda’ tight here right now. How much can you spare on my behalf?

[9YearLurker]

Still trashing Trump without having anything good to say or post—ever—about Cruz.

You must still be working for the GOPe.

[Lib-Lickers 2]

yeah it’s all Trumps fault..

this as a political scientist,, you know one of Trump’s major positives is he is number one by 40% or more on being the best candidate to bring the economy back.. this is really a no poll changing subject so it’s to Trump’s major advantage they keep talking about ethanol.... hey did you hear Trump likes ethanol can we start 10 daily threads on it until Iowa gets together in a few weeks?.. this subject has NEVER moved one blinkin poll number in the history of Presidential campaigns.. so Trump says please keep talking about this it’s like taking a knee at the end of a football game

[cripplecreek]

Ethanol keeps farming profitable. Bad things happen when farming becomes unprofitable.

Terrible things like growing more profitable crops something they can't do if they're tied to a mandate.

[Reagan Disciple]

Maybe it should be Keeping America the same again.

[grania]

Agricultural price support is good for America

I'd rather see an in-balance market with privately owned farms producing foods that aren't poisoning us. I'd rather not have corn syrup making a high percentage of our foods inedible and ethanol lowering MPG and gumming up engines.

But you know what? At this juncture in our history, we need to solve the problems of globalization, the invasion, blood-sucking corporate entities destroying US entrepreneurship and getting US citizens back to work.

Then the problem that price supports prevents can be addressed. But to not support family farmers now would be a disaster, much like what we're seeing with the glut of oil destroying small producers and the good jobs they provide.

[CMailBag]

The problem is the MANDATE, this is OBAMACARE for your cars.

Just as destructive also.

[DB]

No what you hear is crony capitalist getting the federal government to force us to buy their products is now a-okay with “conservatives” because their leader has said so - and it will buy more votes with our money.

We’ve come a long way baby!

Hell, and it is only begun!

Nobody knows where it will go!

And for those who say this issue in small and unimportant. Well if you can’t get the little things right I’m sure it will go spectacularly well on the big things...

[1rudeboy]

On the other hand, one would expect conservatives instinctively to recoil against socialistic policies.

[mconley22]

If you don’t like Trump’s pandering to Iowan farmers, just be patient. His position on ethanol will change as necessary. It must be great to lead a personality cult.

[9YearLurker]

You’ve got to be kidding—farm subsidies and floors save us from deflation?

So too would housing and healthcare supports, too, I guess. So really Obamacare must be a great, great thing.

Kinda hard to see how crony agricultural capitalism is required when those foods that don’t have price supports don’t suffer from both scarcity and “too-low” prices.

Everything was out of wack in the depression, which was also back in the day before we had modern food storage, processing and transportation.

As Mark Leving pointed out last night, ethanol subsidies raise the price of food globally—including for those in third world countries without enough to eat.