Here’s Matt Purple in “Corny Capitalism,” posted on American Spectator at the end of August:
Earlier this year, the Environmental Protection Agency issued another one of those announcements read exclusively by government bureaucrats and green policy wonks. The EPA decided to delay a decision to increase the concentration of ethanol legal in gasoline from 10% to 15%. So-called E15 fuel would have to wait for approval until November.
It was a little-read regulatory decision that barely made a splash in the media. But it was also a rock thrown at Washington’s hornets’ nest of food and agricultural lobbyists. “We are disappointed,” warned food giant Archer Daniels Midland. “We find this further delay unacceptable” and a “dereliction of duty,” harrumphed ethanol lobbying group Growth Energy.
…The history of ethanol is a sad torrid affair of crony capitalism and green fantasies. By jumping in bed with the agriculture industry and blindly slapping on new regulations, the government artificially propped up an industry and put itself in a bind from which there may be no return.
Most certainly, the EPA decision is only a delay, not a reprieve. The delay occurred because even the central planning bureaucrats at the EPA know that cornahol is extremely inefficient (it leaves a sasquatchian carbon footprint), it reduces fuel economy, and it destroys automobile engines. We already pay for the vast sum of agricultural subsidies to prop up powerful corn interests. Meanwhile, Archer Daniels Midland and the rest of the massively subsidized corn industry will harvest huge profits due to favorable corporate state policymaking.
Mr. Purple has written an extraordinary article, laying out an abbreviated timeline describing how Jimmy Carter and Archer Daniels Midland CEO Dwayne Andreas struck a deal to create the subsidized ethanol boon and slapped a tariff (currently over 50 cents/gallon) on foreign producers of ethanol to eliminate the (more efficient) competition. Then came tax credits for producers and the Clean Air Act that conveniently attempted to exempt ethanol under Bush Sr., along with an attempt at a de facto ethanol mandate under Clinton. Purple remarks,
…nobody was crossing Andreas, whose ethanol empire seemed unstoppable. “There is an agricultural mafia in this town, and Dwayne Andreas is its kingpin,” wrote Frederick Potter, a Washington consultant. A few years later, Potter was singing a different tune. Andreas had become his client. By 1995, ADM was producing about 60% of America’s ethanol.
Along with Carter, Bob Dole and Tip O’Neill were regular policy contributors to the kingdom of Archer Daniels Midland. According to a commentary on the Fraser Institute website from 2009, the list of powerful presidential allies is predictable:
- President Jimmy Carter hailed his “gasohol program” as a way to “spur the investments that we, together, must make for a more secure energy future.”
- President Ronald Reagan boasted about how his first-term policies boosted ethanol production from 75 million gallons to more than 450 million gallons.
- President George H.W. Bush called ethanol “a homegrown energy alternative.”
- President Bill Clinton argued that “Ethanol production increases farm income, decreases deficiency payments, creates jobs in rural America, and reduces America’s reliance on foreign oil.” (See CFDC for Carter to Clinton quotes.)
- President George W. Bush trumpeted his administration’s role in boosting ethanol production to the point that “in 2005, the United States became the world’s leading ethanol producer.”
- And President Barack Obama argues ethanol “ultimately helps our national security, because right now we’re sending billions of dollars to some of the most hostile nations on earth” (Rother).
For more on the ethanol money trail, see Tim Carney’s “Obama EPA’s ‘science’ pleases powerful ethanol lobby.” Also see Jim Bovard’s revealing 1995 paper, “Archer Daniels Midland: A Case Study in Corporate Welfare.”