Responding to the Arab oil embargo of 1973, President Richard Nixon vowed to make the United States energy independent within seven years. Unfortunately, 40 years have passed since Nixon's pledge and America is still waiting.
Over the years, motorists have grown accustomed to the pain at the pump, but nothing like they would experience during the first years of the new millennium. The national average price for a gallon of unleaded gasoline TRIPLED from a low of .98 per gallon in 1999 to a then-unheard-of high exceeding $3 per gallon in 2005.
Believing renewable fuels could help wean America from its dependence on foreign oil; lawmakers included ethanol production mandates in the 2005 Energy Bill.
This week though the Associated Press released a series of reports that were highly critical of ethanol production. Renewable fuels advocates condemned the AP reports and fired back with a few criticisms of their own. John Nichols examined the claims -- on both sides of the issue -- and filed this report.
Washington responded to soaring gasoline prices by including a Renewable Fuels Standard, or RFS, in the 2005 Energy Bill. The RFS established an ethanol production mandate requiring 4 billion gallons of the renewable fuel be blended with gasoline in 2006.
Senator Barack Obama: “We are the United States of America.…”
One year later, then-Senator Barack Obama declared his candidacy for President. And like George W. Bush, the Illinois Democrat praised "homegrown, alternative fuels like ethanol," and called for Congress to approve a new, higher Renewable Fuels Standard.
And that’s exactly what lawmakers did -- increasing the ethanol blending mandate to 36 billion gallons annually by 2022.
Since corn is the dominant feedstock of U.S. ethanol, the expansion also fueled a classic bull market. Corn futures prices -- which had fallen below $2 in 2005 -- soared to a then-record-high of $7.54 per bushel during the summer of 2008.
But almost as quickly as it began, the renewable fuels boom encountered strident opposition from critics who blamed high-priced corn for everything from higher food prices to deforestation in developing countries.
And in recent days, ethanol supporters defended themselves again in the court of public opinion.
The Associated Press published a series of stories this week – in print and video -- criticizing the Obama Administration’s support of ethanol and the Renewable Fuels Standard.
Ethanol advocacy groups said “the AP simply ignored the facts in favor of its predetermined narrative,” and characterized the reports as “lazy journalism” that was “littered with misinformation and inaccuracies."
AP’s Senior Managing Editor stood behind the reporting, saying it was the result of months of work that included…interviews of experts and people on all sides of the public policy debate about this energy resource."
ASSOCIATED PRESS VIDEO, JOHN MONE REPORTER: “MOST PEOPLE DON'T THINK ABOUT WHAT GOES INTO THEIR TANKS, OTHER THAN THE PRICE. BUT EVERY PUMP OF GAS COMES WITH A NOT SO HIDDEN COST.”
PRESIDENT GEORGE BUSH: "SOMEDAY YOU WILL BE USING THIS IN YOUR CARS." (FEBRUARY 22, 2007)
SEC. TOM VILSACK, US DEPT OF AGRICULTURE: "THERE'S NO QUESTION THAT AIR QUALITY AND WATER QUALITY IS BENEFITING FROM THIS INDUSTRY. AND WE'RE REDUCING OUR RELIANCE ON FOREIGN OIL AS EVERYONE KNOWS."
Despite numerous criticisms from reporters, and environmental watchdogs, that soundbite from Secretary of Agriculture Tom Vilsack represented the ONLY positive comment about ethanol included in a video report the Associated Press called, “The Secret Dirty Cost of Obama’s Green Power Push.” And the AP followed up Vilsack with this:
ASSOCIATED PRESS VIDEO, JOHN MONE, REPORTER: “UNDER PRESIDENT OBAMA'S WATCH, FIVE MILLION ACRES OF LAND SPECIFICALLY SET ASIDE FOR CONSERVATION HAVE BEEN CONVERTED TO CROPLAND. THAT'S AN AREA THE SIZE OF YELLOWSTONE, THE EVERGLADES AND YOSEMITE NATIONAL PARK COMBINED.”
In a meeting with the editorial staff of the Des Moines Register last week, Vilsack bristled at the mere mention of the AP story, saying that “it contained a number of errors and inaccuracies.” And, the Secretary insisted that conservation acreage is, in fact, at an all-time high.
Sec. Tom Vilsack, U.S. Dept. of Agriculture: "Let’s talk about the suggestion that we have 5 million fewer acres in conservation than when I became secretary. It is simply not true. It is true that we have fewer acres in CRP, but we have more acres in CSP, the Conservation Stewardship Program; more acres in EQUIP; acres in the Wetland Reserve Program, Wetlands in the Wildlife Enhancement Program …wetlands in the Wildlife Incentive Program …all the other acres in conservation programs. So I can confidently say that over 500,000 producers are engaged in conservation programs of one form or another on a record number of acres in excess of 350 million acres. We will add 24 million acres to that number this year so we will be up to 370 million acres or so. So it’s inaccurate to suggest that because one program has declined that all of conservation has declined. It has not.”
But the Associated Press wasn’t finished.
AP VIDEO REPORT: LEROY PERKINS, CORYDON, IOWA FARMER: "I CAN MAKE A LOT MORE MONEY PLANTING CORN AND BEANS."
THAT'S THE DILEMMA FOR FARMERS LIKE LEROY PERKINS. THE MONEY THE GOVERNMENT PAYS TO KEEP HIS 91-ACRES UNFARMED AS PART OF A CONSERVATION PROGRAM IS NOW LESS THAN WHAT HE CAN GET FOR CORN.
LEROY PERKINS, FARMER: "WHAT'S GOING TO HAPPEN TO THE LAND? I GUESS THEY'LL DISAPPEAR."
In retrospect this week, Corydon, Iowa farmer Leroy Perkins told the Iowa Renewable Fuels Association that he’s a big believer in ethanol and he’s disappointed that what he told AP reporters seemed to be twisted to satisfy an agenda.
Leroy Perkins, Corydon, Iowa: “Not once was I led to believe they were going to do a wham-bang on ethanol. They mentioned the ethanol. There’s two sides to every story, and that ethanol story has a side, but there’s another side to it too.”
AP VIDEO REPORT, JOHN MONE, REPORTER: “THE EVIDENCE IS THE GROUND. IN 2012 FARMERS PLANTED 15 MILLION MORE ACRES OF CORN THAN BEFORE THE BOOM. (FREEZE)
Sec. Tom Vilsack, U.S. Department of Agriculture: "The price of corn at $8 per bushel, a lot of producers decided to take land that had been in CRP and put into production. Now corn is now $4.50, $4.20… It’ll be interesting to see what kind of interest we have when we have an open enrollment. But it’s a factor of the economy.
AP VIDEO REPORT: THIS COLOR CODED MAP BASED ON U-S DEPARTMENT OF AGRICULTURE DATA SHOWS THE DRAMATIC CONVERSION. THE DARKER THE AREA, THE HIGHER PERCENT OF CORN PLANTATION.”
AP VIDEO: CRAIG WILCOX, ENVIRONMENTAL WORKING GROUP: "IT'S BECOMING MORE COMMON BECAUSE HOW PROFITABLE CORN ON CORN IS INSTEAD OF ROTATIONS."
AP VIDEO REPORT: GULLIES SHAPED LIKE FINGERS SHOW THE EFFECT OF PLANTING ON MARGINAL LAND.
CRAIG COX OF THE ENVIRONMENTAL WORKING GROUP, NORMALLY AN OBAMA ALLY, CALLS THE ETHANOL POLICY AN ECOLOGICAL DISASTER.
AP VIDEO REPORT: CRAIG COX, ENVIRONMENTAL WORKING GROUP "SO YOU CAN IMAGINE, THIS SPRING, APRIL, MAY THERE'S NOTHING COVERING THE SOIL EROSION AND POLLUTED RUN-OFF FROM FIELDS IS HORRENDOUS"
Iowa Secretary of Agriculture Bill Northey disagrees that increased corn acreage automatically results in soil erosion and polluted run-off. Northey, who farms 600 acres in the northwest corner of the Hawkeye State, also criticized the Associated Press reports. And he says farmers in Iowa – the nation’s top corn and ethanol producing state – are going to great lengths to minimize erosion and control runoff from their fields.
Iowa Secretary of Agriculture Bill Northey: “Farmers are working hard at it. They’ve done it a long time around erosion and you look at terraces and grass waterways and filter strips folks have put in. Now we’re increasingly looking at water quality and trying to reduce nitrogen and phosperous as well. Some of those same practices work but it requires other practices to do some things. We’re seeing increased amounts of cover crops out there and we’re looking at bio-filters, nutrient reduction and wetlands that are out there as well. Lots of different practices, practices that in some cases farmers weren’t using ten years ago now they are and increasingly interested in it. We’re seeing a lot of effort in engagement around both water quality and water erosion reduction.”
AP VIDEO REPORT: THAT RUN-OFF ACCORDING TO DES MOINES WATER WORKS IS ENDING UP IN THE TWO RIVERS THAT SUPPLY 500,000 CUSTOMERS. FOR THE FIRST TIME, THE CITY HAD TO RUN HUGE MACHINES AROUND THE CLOCK THIS SUMMER TO FILTER OUT THE RISING LEVELS OF HARMFUL NITRATES.
SCIENTISTS SAY THOSE SAME POLLUTANTS CONTAINING-- NITROGEN AND PHOSPHOROUS --ARE MAKING THEIR WAY ALL THE WAY TO THE MOUTH OF THE MISSISSIPPI RIVER AND BEYOND, WORSENING AN AREA KNOWN AS THE DEAD ZONE - WHERE MARINE LIFE CAN'T SURVIVE.
THIS YEAR'S DEAD ZONE STRETCHED MORE THAN 5800 SQUARE MILES, THE SIZE OF CONNECTICUT.
AP VIDEO REPORT: LARRY MCKINNEY, HARTE RESEARCH INSTITUTE, "IT'S NOT ROCKET SCIENCE TO FIGURE OUT THAT IF YOU PLANT MORE ACREAGE OF CORN. YOU USE MORE FERTILIZER, WE LOSE MORE FERTILIZER. THAT MEANS MORE OF IT GETS INTO THE GULF OF MEXICO."
Runoff from farmland – particularly in Iowa -- has long been blamed for its contribution to the Dead Zone. And the Associated Press was correct when it reported the Des Moines Water Works operated its nitrate removal facility for a record period this past summer. But RFS proponents dispute the suggestion that increased corn acreage means more fertilizer and more nitrates in the Gulf of Mexico.
According to the Renewable Fuels Association nitrogen use actually declined from the inception of the Renewable Fuels Standard in 2007 through 2010 – the most recent year for which Agriculture Department data is available.
The RFA maintains the amount of nitrogen required to produce a bushel of corn has fallen steadily over the past 30 years, dropping 43 percent per bushel since 1980.
RFA President Bob Dineen told Market to Market this week he was frustrated by what he called, an “utter lack of balance” in the AP report. Dineen questioned the timing of the AP coverage with EPA’s ethanol blending announcement looming on the horizon and said he and other proponents will continue to advocate for what he calls “America’s most successful renewable fuel.”
Bob Dineen, President, Renewable Fuels Association: “I believe the Renewable Fuels Standard has been a tremendous success. I believe it is necessary for our nation’s economic and energy future and I, the domestic ethanol industry and farmers across the country are going to fight to make sure this important policy remains in place.”
On Friday, however, the Obama Administration proposed reducing the amount of ethanol in America’s fuel supply next year by nearly 3 billion gallons. And when Market to Market asked Dineen what his response would be if that were to happen, he vowed to fight harder than ever before.
Bob Dineen: “We will certainly be commenting to EPA. We’ll be encouraging others to let the administration know the mistake that they are pursuing. And hopefully, before this rule is finalized, changes are made that reflect the potential of domestic renewable fuels to continue to grow and evolve; lower consumer costs, lower our dependence on foreign oil and finally address global climate change. If not, if they finalize a rule, and roll back the RFS, the only successful energy policy this nation has in place today, we will challenge it in every venue we possibly can -- including the courts.
Next week, Market to Market will examine the impact of the Obama Administration’s proposal to roll back the RFS and consider its effect on prices from the pit to the pump.
For Market to Market, I’m John Nichols.