WHAT QUALIFIES AS GLUTTONOUS PROFITS? HOW ABOUT 8,000%!

If you’re looking for a good read, I think you might have just stumbled across one.

Take a look at this article by Marc J. Rauch, Executive Vice President of The Auto Channel which claims to be the “largest independent automotive information resource.” I don’t know about that, but I do know that Mr. Rauch is in favor of calling a spade, a spade.

The article quickly chronicles the arrival of a news tip in his inbox entitled Automakers Concerns with E15, and his thoughts on the folks that wrote the article, their lack of facts, and their unbiased support of the oil industry.

He offers some great quotes. For one, “The story’s byline claims that its author is with the ‘Ethanol Transparency Project,’ a sponsored program of “The Agribusiness Council.” After perusing information about The Agribusiness Council I would say that its name is as ill-conceived in describing its real purpose as “National Socialism” was to describe Hitler’s Nazi Party.”

And he summarizes the article by saying, “Except for those people who make gluttonous profits from the petroleum oil, it is in everyone’s best interests to destroy OPEC and the ruling hierarchy of the gasoline companies. Energy independence from foreign dictators and terrorism supporters can be had, and there are economically viable alternatives to gasoline that are available right now. Alcohol (ethanol) is one, and it may be as close to a viable single source solution to oil as is possible.”

I won’t ruin it for you. Come check it out here.

By: Lindsay Mitchell
ICGA/ICMB Marketing Director

FAPRI Response to “Stop Big Corn” in Washington Times

Ethanol Fumes

The editorial “Stop ‘Big Corn’ ” (Opinion, Monday) did not accurately describe the analysis of ethanol policy conducted by our institute.

The editorial says we at the University of Missouri’s Food and Agricultural Policy Research Institute estimate that the ethanol blender’s tax credit increases the price of corn by “18 cents per barrel.” This appears to be a reference to a report we issued in March that looked at the impact of extending the 45-cents-per-gallon ethanol tax credit, the 54-cents-per-gallon ethanol tariff and the $1-per-gallon biodiesel credit. We estimated that the combined effect of these three policies would be to raise the average producer price of corn by 18 cents per bushel during the 2011-12 corn-marketing year. Individually, each of these policies would have a smaller impact on corn prices.

In addition, the editorial says the Environmental Protection Agency is deciding whether to “boost existing requirements that gasoline contain 10 percent ethanol to 15 percent.” The EPA is actually considering whether to allow 15 percent blends, not whether to require them.

Finally, you cite the cost of the blender’s tax credit as $16 billion per year. That would be the eventual cost of the credit if ethanol consumption reached 36 billion gallons per year and the tax credit were maintained at its current level. We project actual ethanol use in 2010 to be a little more than 12 billion gallons, suggesting that the direct fiscal cost of the credit this year will be less than $6 billion. Without legislative action, the blender’s credit will expire at the end of 2010.

PATRICK WESTHOFF
Co-director, Food and Agricultural Policy Research Institute
University of Missouri
Columbia, Mo.

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