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No. I have no ethanol or ethanol adjacent investments.

As I’m sure you know, ethanol and biodiesel have been around since the earliest days of the automobile industry. Rudolf Diesel ran his first engines on peanut oil. Henry Ford was touting ethanol as the fuel of the future in the 1930’s. It didn’t work out that way, and we couldn’t have produced enough ethanol to fuel what the automobile industry became, but the point is that these technologies are nothing new. The dominant reality, however, was that conventional oil continued to be very cheap, and ethanol remained a farm patch pie in the sky dream but a niche product in reality.

Ok, we both understand all that.

We have paid a huge geostrategic price for our continued reliance on oil, however, because the marginal barrel of oil since the 1950’s has been produced by the OPEC countries. We have handed pricing control and the ability to crush the developed world’s economies to some of the most vicious gangster regimes in the world. But put all that aside.

Let’s reduce it simply to price. The question is — as it has been for decades — how long oil will remain the most cost effective fossil fuel. We simply don’t know. And given that the global left is bent on destroying the fossil fuel industry, the political risk is significant.

In the face of oil’s price supremacy, ethanol remained a corn patch hobby horse until the 2000’s. Then began a steady price rise, driven by the Goldilocks economy of that wonderful decade. The price of oil on the global market hit an artificial low of $12 a barrel in the wake of the first Gulf War and then stabilized slightly higher, but in the 2000’s it began to creep up. It hit $60, then $80, then $100, and was approaching $150 when the dot com bubble burst in 2000. The chattering classes tend to attribute the recession primarily to that, but $150 oil shouldn’t be ignored as a contributing factor.

Anyhow, at some point in that decade, when oil rose to somewhere in the $60 to $80 range, something remarkable happened. Ethanol became cost competitive without subsidy. And early investors in ethanol made a lot of money. Suddenly there was a massive new market — a legitimate economic market, not a policy driven market — for biofuels. The policy subventions in favor of ethanol were dropped, except for the blending mandate that blocked Big Oil from collusive action to block a rising competitor. The corn patch ramped up production. The drive for higher yields kicked into high gear. Precision agriculture and GMOs took off, and everyone with a test tube seemed to be working on cellulosic ethanol and third generation biofuels. This was all price driven, and this is when the big U.S. ethanol buildout occurred. So far, so good.

Then came fracking, which again scrambled the economics. But how long will fracking hold the line — especially since the left will block all fracking the moment it gets a chance?

My point is simply that the one thing we do know is that the situation will continue to change. We cannot predict with certainty what the dominant transportation fuels will be 20 years from now. I have limited my comments to this point to biofuels and oil, but hydrogen fuel and EV’s should not be discounted either. I continue to believe that we would be fools not to hedge our bets, maintain a robust research, development and demonstration program across all potential options, with an eye towards an underlying ability to respond to rapidly changing market conditions. That shouldn’t be heresy.

The left, however, disagrees. The left has decided to go all in on electric and is at war with all alternatives. With scattered exceptions, it is opposed to nuclear for baseline power generation. (We should have gone nuclear decades ago.) The left opposes biofuels. It has largely lost interest in hydrogen, which was not close enough to market viability to begin to build out in a significant way. And it is unalterably opposed to all fossil fuels, including natural gas, and therefore to fracking. The left wants electric, generated by wind and solar, and since there is no way we can meet the demand with wind and solar, the left wants the systematic lowering of living standards, an economy of scarcity rather than abundance, markets replace by rationing, and comprehensive government control of all significant economic activity.

Which has always been the left’s goal. Its energy policy is intended to create scarcity. So is its environmental policy. I think you know this. State control is the goal.

So: ethanol is cost competitive now. It’s not going to go away for economic reasons. But ethanol faces harassment from the left, with the carbon budget issues being among the issues. What we have in this instance is a group of people in the ethanol industry who think they’ve found a way to answer the carbon objection. Even better, as I understand it, their goal isn’t simply to sequester the carbon produced by ethanol plants; they think that, once having captured it, they can monetize it as an industrial feedstock for real value-added products. Monetizing a waste stream is great if they can pull it off. The leftist luddites can take that and shove it where the sun don’t shine.

I don’t know if these folks can make it all work. That’s their problem, not mine. But I do recognize them as allies, not enemies. Why should conservatives be throwing up roadblocks? Because we’re opposed to pipelines? Nonsense. Because we’d rather pay OPEC than Iowa farmers for producing transportation fuels? Nonsense. Because we’re too lazy to update our decades old notion that ethanol is nothing but a subsidy baby? Nonsense. Because our crystal ball tells us that fracking is the one and only true permanent solution, so we should be as blindly attached to fracking as the left is to electric everything? Nonsense.

These ethanol guys have an idea. They think they can make it work. They’ve raised the money for the project; they’re not shaking the money tree. They’ve gotten regulatory approval. I gather that all they need now is to acquire rights of way for the gathering pipelines.

Why in the world should conservatives go out of our way to throw up roadblocks. I thought we were in favor of innovation and private investment. Let these guys give it a shot. If they make it work, it’s all upside. If they fail, the dollars they lose are their own. Let’s go for it. See if it works. We have nothing to lose.

We seem to have a lot of freepers who have been on a hate ethanol bender for 40 years and who refuse to recognize that a lot has changed.