Tag Archives: drought

The RFS Ethanol Mandate – and the Drought

A federal tax credit for ethanol, created more than 30 years ago, expired on Saturday, December 31, 2011. During the past more than 30 years, the federal government provided more than $20 billion in subsidies for the use of ethanol. Most U.S. ethanol is produced from corn.

That’s all well and good, but…subsidies (in the form of tax credits) for ethanol may have ended, but there is this little something called the “Renewable Fuel Standard” (RFS), created while George W. Bush was president, as part of the Energy Independence and Security Act (EISA) of 2007. The Obama Environmental Protection Agency (EPA), under administrator Lisa Jackson, has decided to continue it.

For further perspective, Aaron Smith, at The American, the online American Enterprise Institute magazine, on January 4, 2012, wrote:

So why did the powerful corn ethanol lobby let it expire without an apparent fight? The answer lies in legislation known as the Renewable Fuel Standard (RFS), which creates government-guaranteed demand that keeps corn prices high and generates massive farm profits. Removing the tax credit but keeping the RFS is like scraping a little frosting from the ethanol-boondoggle cake.

So the RFS takes up the profit slack lost when the ethanol tax credit subsidies were ended.

The “Standard” calls for the EPA to be “responsible for developing and implementing regulations to ensure that transportation fuel sold in the United States contains a minimum volume of renewable fuel.” That means that farmers will continue to devote large quantities of land to Greenhouse Gas (GHG)-intensive corn, the kind used to make ethanol.

For comparison, in 2005 (before the mandate), corn was selling for $2 per bushel, and 1.6 billion bushels of corn, about 13 percent of the crop, was converted into ethanol. Today the price is over $8 per bushel, and the RFS mandate calls for over one third of the crop be converted into ethanol.

According to Aaron Smith, “The RFS mandates that at least 37 percent of the 2011-12 corn crop be converted to ethanol and blended with gasoline.” Smith continues: “The RFS mandate requires a massive quantity of corn to be converted to ethanol each year regardless of price or available supply.”

The Congress Budget Office (CBO), in July 2010, wrote, “… the scheduled increase in mandated volumes would require biofuels to be produced in amounts that are probably beyond what the market would produce even if the effects of the tax credits were included.” Demand for corn-based ethanol is driven by the RFS mandate. The tax credit that expired at the end of 2011 hardly made a difference.

As Robert Brice at Slate writes, there is no doubt that the corn ethanol mandate is distorting the market. Most corn is used not as food for humans, but as livestock feed. That fact means that prices for human food, from milk to cheese to eggs to meat, will increase as a result of the RFS mandate. America’s corn to ethanol process now consumes about as much grain as all of the US’s livestock.

The U.S. is currently exporting large quantities of corn ethanol to, of all places, Brazil. Yes, that is the same Brazil that accepted money and technology for “environmentally responsible” oil exploration from the US, then signed contracts with China for the oil.

The RFS mandate is bad enough, but now farmers nationwide are feeling the effects of the drought. The USDA has yet again downgraded the condition of U.S. corn crop, saying that only 26 percent of it is in “good” or “excellent” condition, down from 31 percent the week before. Iowa farmer Chris Barron says his “corn and soybean crops will likely generate yields 7 percent to 10 percent below what he estimated” due to the fact that the Midwest has received about 0.94 inches of rainfall so far in June, or about 20 percent of the 30-year average for the month.

Colin Carter, a UC Davis agriculture economist, said, “The ethanol policy is a bad idea because the impacts of a drought are much more severe than it used to be.”

Drought concern started a Chicago Mercantile Exchange (CME) Group grain markets price rally, sending corn futures up over 60 percent since mid-June 2012, and the price per bushel as high as $8.20. As of August 7, 2012, Iowa was, according to the U.S. Drought Monitor, suffering from severe to extreme drought. Illinois, the second-most prolific corn-producing state after Iowa, was in extreme to exceptional drought. Moderate to exceptional drought also affected most of Missouri, Indiana, Kansas, and Nebraska.

A less than expected corn crop will leave supplies low, raising questions over the ability of the U.S. to keep pace with growing worldwide demand. Jason Britt, president of Central States Commodities, Inc., based in Kansas City, MO, said, “There’s ‘almost zero’ chance the corn crop achieves the USDA’s current nationwide yield forecast of 166 bushels an acre. Given drought damage, the crop probably will drop below 160 bushels an acre, and perhaps to the low- to mid-150s.” As Aaron Smith commented, “Low corn stockpiles place the worldwide market in a perilous position. If the 2012 US crop is even slightly smaller than expected, corn prices will rise even further and plunge millions more people into extreme poverty.”

Corn ethanol producers would reduce their use of corn in the ethanol process in response to higher food and feed prices (demand) if they were unconstrained by the RFS mandate (see Figure 3, page 35).

Several senators and representatives who represent livestock producers and dairy farmers are willing to suspend the corn portion of the mandate, but they want the cellulosic ethanol part of the mandate enforced. But there is one small problem with that idea: cellulosic ethanol does not exist.

Now we find that eight biofuels groups are forming a coalition to fight calls to limit a federal mandate for renewable fuels. The call to suspend the mandate is caused by the drought. Advanced Biofuels Association, Advanced Ethanol Council, Algal Biomass Organization, American Coalition for Ethanol, Biotechnology Industry Organization, Growth Energy, National Biodiesel Board, and Renewable Fuels Association make up the coalition.

Add to the above the problems caused by the transportation, storage, and use of ethanol, and there is the makings of a real catastrophe. Ethanol and gasoline-ethanol blends “cannot be transported by gasoline pipelines” because water in the pipelines causes the ethanol to separate from the gasoline. Ethanol must be transported by its own independent distribution system. It is blended with gasoline just before delivery to retail stations. And engine ignition is “more difficult in colder weather for vehicles running on fuels with high ethanol content” because of ethanol’s lower vapor pressure.

As Aaron Smith says, “It is time for the federal government to stop requiring cars to burn food.” But I suppose that the Obama EPA would rather continue its RFS mandate than tell the truth about fracking, or about Obama’s war on “Big Oil.”

And let’s not forget George W. Bush’s part in this situation. It was he, after all, who got the ball rolling.

But that’s just my opinion.

Please visit RWNO, my personal web site.

Governor Perry asks Texans to Pray for Rain

This past Thursday, April 21, 2011, the Governor of Texas, Rick Perry issued an Official Proclamation for Days of Prayer for Rain in Texas.

As a citizen of Texas, it is with great humbleness that I submit myself to pray for rain for our drought-ridden state. What saddens me is that as a woman who prays about everything, I have not prayed for rain up until our Governor put out an official proclamation to pray for rain.

I wonder why this is. I guess it’s just one of those simple things that should come naturally but you just don’t stop to think about it.

On a daily and sometimes hourly basis, I pray for this nation, that she will turn back to God;  I pray for our President, that he will humble himself before God and seek God’s will rather than his own selfish ways for this nation he was called to lead; I pray consistently for the complete healing and restoration of body, mind and soul for Congresswoman Gabrielle Giffords who was gunned down in January of this year. In fact, this one event affected me so deeply that the day after the shooting I started a personal prayer blog to specifically pray for her continued progress and healing.

Over the months, this site has grown into praying for a great deal of things that has happened throughout our nation.

Looking back, on the blog site, as well as in my personal, private prayer time, I have no problem praying for the big things as well as the small things. I’m a firm believer that nothing is too big or too small for God Almighty! And yet…. I still had not thought to pray for rain!

I appreciate the fact that Governor Perry, as the elected official of this great State, has made an official proclamation to pray for rain. He has reminded us that we should seek God Almighty with all of our needs, including the weather. While I do not agree with everything that Governor Perry does, and in many ways I see him as just another “typical politician”,  I do see that he is leading in a way that allows God to guide him and direct him in his decisions. Whether or not he personally truly seeks God’s will in his governing I cannot say.  But I would venture to say that he has a fairly strong and faithful prayer life. Whatever the case may be, as far as his personal relationship with God, he has reminded me to pray for rain!

Here in San Antonio it is still dry as a bone. This morning, when I heard the rumblings of thunder, I was prayerful and hopeful that God was going to open up the floodgates of heaven with His soaking rain. However, we have only received a few drops here and there.

Does this mean I believe God has turned His back on believers who are earnestly praying for rain? No, not at all! In fact, in my mind I see it as a searching call from God. It’s almost as if He is saying, “Yes, my children, I hear your prayers. I want to bless you. Can you hear that I am preparing to pour out my blessings of rain for you?” Is it wishful thinking? No, it is hope, faith and trust in God Almighty.

For now, His answer is “no” in response to opening the floodgates of heaven to let it rain abundantly on our state. So I will continue to call upon the Name of the Lord God Almighty to send us the much needed rain in abundance! And if He still continues to say “no” to my prayers? Blessed be the Name of The Lord! He gives and takes away, my heart will choose to say- Blessed be the Name of The Lord!

This song is my prayer, Lord God:

http://youtu.be/ucWK6fkGsAE

 

 

* At the request of a reader, the banner graphic for this article has been made available for purchase in poster sizes. 

Fish 1: Farmers 0

The delta smelt has taken on a vicious campaign against California food growers.  The smelt have collectively contacted their representatives and senators to let them know that if more water is not diverted into their rivers, the congresspeople will be voted out. The “Smelts for Obama” Political Action Committee has promised all of its resources to the wishes of the new President in return for more water.  Not just more, but all of it.

There was some concern that congress would not listen to fish, even with the threat of a loss of voter support, but that has proven untrue.  California congress members have acted and the fish are encouraged by the truly representative democracy they swim within.  There is no doubt that farmers have been out-maneuvered by the smelt PAC.  In a democracy, that’s what happens – those with the majority (fish) have power over those that do not (the people).  It is possible that we must get used to this as Cass Sunstein (an Obama administration official) may make it possible for animals to sue us.  A position I support, as long as it becomes legal to hunt lawyers.

Farmers have had to live with infertile lands, dying orchards and farmland, and impossible growing conditions.  The 40% unemployment conditions are just a cost of making sure the aquatic segment of the populace are taken care of.

Some are crying that an ineffective census has left farmers with even more rights than they should have had.  Clearly, there are more fish than farmers and in a representative government… the fish win.

The lessen to farmers… spawn or get out-voted by an animal that lives about a year and has no value to the economy whatsoever.