[NEWS] The Standoff Between Big Oil and Big Corn
– by David Gelles, September 17, 2016, New York Times
A decade ago, lawmakers in Washington tried to address a trifecta of thorny challenges with one simple fix that has turned out to be anything but easy to assess.
The problems: an overreliance on foreign oil, rising greenhouse gas emissions and tepid economic growth.
The solution: the Renewable Fuel Standard, commonly known as the ethanol mandate. Enacted in 2005 and expanded two years later, the legislation required that refiners blend an increasing amount of biofuel into the gasoline that powers most American cars.
The logic was straightforward. More ethanol production would in theory reduce America’s dependence on oil from the Middle East. Because biofuel generally releases less in greenhouse gases than fossil fuel when burned, all that ethanol would be good for the environment, too. And by stimulating demand for domestically produced ethanol, made largely from corn, the mandate would prop up farmers and refiners.
In the intervening years, the ethanol industry has ballooned into an economic juggernaut. Last year, the industry contributed an estimated $44 billion to the economy.
Those numbers are set to become bigger. The Environmental Protection Agency, which administers the mandate, effectively increased the amount of ethanol required to be added to gasoline to 17.4 billion gallons this year, an annual increase of about 9 percent over 2015. The mandate calls for production to nearly double to 36 billion gallons by 2022, and in theory, much of that will be cellulosic ethanol, made from crops other than corn, like sugar cane and switch grass.