Skip to comments.Ethanol Subsidies, Newt Gingrich, and the 2012 Election
Posted on 02/06/2011 9:12:07 PM PST by Freemarkets101
With the 2012 presidential election already on presidential aspirants front doorstep, former House Speaker Newt Gingrich is hiking the campaign trail, stomping the path of ethanol subsidies.
Last Tuesday, the former Speaker visited the Renewable Fuels Association summit in Des Moines, touting the praises of ethanol and its progressive impact on the environment. He then tenderized the farm industry saying, We have had a problem of farm income back to the 1890s and 1880s [and] the fact is that every time the farmers start to do well someone starts to attack them.
A battle between Gingrich and the Wall Street Journal is now raging, as Gingrich accused the Journal of being just plain flat intellectually wrong about its anti-ethanol views. He then accused big cities and big urban newspapers of denying prosperity to rural America. The Journals editorial board responded, questioning him on his claimed status as a fiscally conservative Republican:
The Georgian has been campaigning in the tea party age as a fierce critic of spending and government, but his record on that score is, well, mixed . Some pandering is inevitable in presidential politics, but befitting a college professor, Mr. Gingrich insists on portraying his low vote-buying as high intellectual policy. This doesnt bode well for his judgment as president.
The editorial board proceeded to explain the Republican Partys opportunity to reform government by instilling fiscal responsibility and decreased regulation, but the danger lies with people like Gingrich in the party, who struggle with the addiction of corporate welfare and industry-specific favoritism. The Journal reported this conundrum and honed in on Gingrichs compromise to Democrats and the Obama administration:
So along comes Mr. Gingrich to offer his support for Mr. Obamas brand of green-energy welfare, undermining House Republicans in the process. In his Iowa speak-power-to-truth lecture, he even suggested that the government should mandate that all new cars in the U.S. be flex-fuel vehicles meaning those that can run on an ethanol-gas mix as high as 85% as if King Corn were in any danger of being deposed.
Gingrichs argument is most likely of a political nature, considering his assumed desire to woo Iowa caucus participants in the 2012 Republican presidential nomination. This type of political pandering is similar to Democratic politicians who solicit minority votes with divisive rhetoric and government handouts; his rural community indulgences parallel the Democrats motif of promoting disenfranchisement to blacks, Hispanics, and homosexuals.
Ethanol as a solution to curing poor air quality is at best questionable. Although the EPA as a whole supports ethanol subsidies, it admits that ethanol use will increase chemical emissions in the ozone. Furthermore, a report by the California Air Resources Board concluded that gasoline containing ethanol caused a 45-percent increase in volatile organic compound emissions when compared to gasoline containing no oxygenates. (Robert Bryce, Gusher of Lies: The Dangerous Delusions of Energy Independence, 186)
It doesnt reportedly reduce greenhouse gasses either. Clean New Power asserts:
The impact on greenhouse gases is minimal.
In theory, the advantage over fossil fuels is that plants will absorb CO2 as they grow. It is then released again when burning the fuel, so this should be a carbon neutral process.
But in reality it depends on the efficiency of the production process. If you burn coal to create electricity that is used by an ethanol plant then the net emission of greenhouse gases could be higher than if you just burned gasoline. And then you still have to produce fertilizers.
Ethanol supporters continually repeat the line that ethanol replaces gasoline and reduces U.S. oil imports, despite studies that show that the creation of ethanol from corn is so energy intensive that America derives little if any benefit from switching to ethanol even as Third World people have seen their food costs skyrocket as we burn food for fuel. In reality, the government has already spent the money to create the infrastructure necessary to allow ethanol to compete with oil, so if ethanol really is as valuable as its touted to be, it could face direct competition without a reliance on government subsidies. But its not doing that.
Ethanol plays a key role in politics, as it is an effective way for Washington to grant subsidies in return for campaign contributions and political backing. In late November of last year, a bipartisan group of 15 Senators assisted in extending federal tax provisions on domestic ethanol production. A Center for Responsive Politics analysis claimed the Senators collaborated on two fronts: geography and contributions from political action committees of ethanol producers, high-profile ethanol promoters and the leading industry groups for corn.
The Senators demanded extensions on U.S. ethanol subsidies. Naturally, during the past six years all 15 Senators have received campaign contributions from pro-ethanol companies and interest groups. On average, each Senator received $5,000 from bioengineering and agricultural chemical company Monsanto, $4,100 from farming giant Archer Daniels Midland, $1,600 from the National Corn Growers Association, [and] $1,200 from ethanol producer POET LLC.
They defended their position by claiming an expiration of the subsidies will destroy thousands of jobs, further deteriorate the environment, and increase our dependence on foreign oil.
Gingrich, along with his ethanol hawking colleagues, have friends to repay, and promoting policies that will benefit the Corn Belt may present campaign assets for the 2012 election for both money and votes.
But Gingrich and other conservative Republicans who support ethanol subsidies are risking the dreaded label of fiscally irresponsible bureaucrat. Currently these subsidies amount to about $6 billion annually and with the current drive for decreasing government spending, particularly among tea party supporters, pro-ethanol politicians may become heated targets.
The question is will such popular dissent overpower the benefits of supporting the ethanol lobby? The answer is probably not.
Just say ‘no’ to Newt.
We won’t be shedding Ethanol subsidies any time soon - the whole election begins with some of the biggest corn producers int he country. They love that federal gravy they get through those programs.
It’s pretty obvious that the newt wants to run, but taking a boneheaded position like this guarantees that he’ll lose - badly. Leftists would never vote for him for any reason and again he marks out territory to intentionally piss off the right.
One of the dumbest bright guys I know.
Having Iowa as the first state in the primaries is fine...until it starts destroying this country and causes overthrows and riots in other countries (i.e., Tunisia and Egypt, due to high food costs - caused by Ethanol).
Enough is enough - let’s get rid of that stupid caucus once and for all.
Just a few years ago Newt was leading the charge on Drill Baby Drill - now he’s back to being a Greenie Weinie - what a disappointment.....
exporting corn is stupid.
better to burn corn in a stove or car,
than feed our enemies.
Newt simply doesn’t know what he’s talking about.
Newt & McCain. Synonymous.
Apparently the jackass wasn’t paying attention when Gore admitted he made a mistake, and only backed ethanol for political gain.
Ethanol is a commie means to a commie end.
Newt has been in D C far too long and believes his own press at this point
Give it up Newt, go make nice with Hillary and Nancy some more
And just go away
Personally I don’t see ethanol being an issue in 5 to 10 years. Technology is going to take care of the problem.
There is zero link between corn prices and what’s happening in Egypt and Tunisia. They eat rice and wheat.
“There is zero link between corn prices and whats happening in Egypt and Tunisia. They eat rice and wheat.”
Directly, yes. Indirectly NO!! The West eats corn, wheat, and rice. So, what do we do when corn gets expensive...move over to wheat and rice, to some extent...and put pressure there.
The bottom line is that there is a relatively inflexible food supply, and when some new user comes in and consumes a big chunk of it (for stupid political reasons), the only response is for prices to rise.
We don’t eat field corn that’s made into ethanol. It’s mostly used for animal feed, soda pop, and corn starch.
It all bumps over (and I’m sure you know that). Farmers that have a choice as to which crop move towards corn (any type) if there’s a greater demand there. It all (essentially) coming from the same amount of land...although, eventually, market forces should bring the supply up (assuming that we don’t go to 15% ethanol first).
Corn acrerage for the last 20 years. It's went up around 12% from the average.
Soybean acreage however is way up...
Which accounts for the loss in wheat but soy isn't used for ethanol. Increased acreage in corn and beans together pretty much offset losses in cotton and sorghum acreage as well as wheat. Cotton isn't food, sorghum is raised for sweetener and not food.
However, wheat production is about at the average of the 20 year production line. Losses of acreages attributable to soybeans than corn hasn't affected our wheat output. What's going on in Egypt has nothing to do with ethanol.
Inconsistencies Though Santorum made few flip-flops during his congressional career, a notable exception was his shifting stance on federal ethanol subsidies. Prior to 9/11, I was not a big fan of ethanol subsidies but 2001 changed my mind on a lot of things, and one of them was trying to support domestic energy and this is part of it, Santorum told IowaPolitics.com January 27, 2011. My pledge to you is to work with this industry to create a bigger and bigger place in the market for domestically produced ethanol biodiesel.
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