February 21, 2014

Predicament at the Pump


Mike and Diane Karr family for Nebraska Corn Board.  September 13, 2013. Photo by Craig Chandler / University Communications*By Diane Karr, CommonGround volunteer and farmer from Blue Hill, Nebraska

When I fuel up my vehicle, I use an ethanol blend without any second thoughts. But what if I wasn’t a farmer?

There are two main schools of thought right now on ethanol. While ethanol industry promotes it, the petroleum industry promotes fear of it.

A reduction in the Renewable Fuel Standard (RFS) has been proposed by the Environmental Protection Agency (EPA) and some members of Congress. The RFS is legislation that sets targets for blending ethanol with gasoline. The EPA is proposing a reduction of 1.4 billion gallons.

On one hand, the ethanol industry points out that the RFS decreases our dependency on foreign oil, that ethanol is a cleaner choice for the environment, and that the RFS provides strong economic support for the cities and farms in the Midwest.

On the other hand, the petroleum industry tells consumers that ethanol damages engines, raising corn is destructive to the environment, and agricultural subsidies hurt the poor. However, when we read between the lines, vehicles with improved fuel efficiency have led to decreased demand for gasoline. This has left the petroleum industry wanting to increase its market share and bottom line by reducing ethanol blend targets. If you are holding a petroleum company in your investment portfolio, this benefits you. It’s ironic that oil interests express concern for the poor while they boast record profits and unapologetically stick it to consumers at the pump!

All mudslinging aside, here’s what I know as a farmer:

  • We’ve used ethanol for over twenty years in our pickup trucks and personal vehicles without any engine problems. None of our mechanics has ever advised against using ethanol blends.
  • Corn production on our farm is not destructive or unsustainable. Most of the farmers I know practice similar methods to care for the land and water. (I’ll let you make up your own mind as to what kind of impact you think the petroleum industry has on the environment - such as 2010’s Deepwater Horizon oil spill.)
  • 80% of the Farm Bill funds food stamps and nutrition. The remainder supports crop insurance, conservation, subsidies, and other programs. The main intent of agricultural subsidies is to provide economic stability in times of extreme weather or market risk. Connecting subsidies to the plight of the poor is questionable at best.
  • Veterans groups are pro-ethanol.

As a corn farmer, I’m biased. However, we also raise soybeans, wheat, grain sorghum, alfalfa and cattle.  Although corn prices spiked in recent years, it’s when production is high and prices are low that the ethanol industry lends important stability to the market.

I truly predict that a reduction in the RFS would have a negative influence on the economy in the Midwest, which could ultimately impact other sectors of the economy nationwide which have been experiencing a somewhat shaky recovery. When the farm economy is weak, it deals a severe blow to all of rural America. During the 1980s Farm Crisis, we didn’t just lose farmers. We also lost small town businesses and population which eventually triggered a wave of school consolidations. When farmers can’t replace and update equipment, it affects manufacturing sector. The ripple effect reaches all consumers eventually. Ethanol production is a homegrown American industry that benefits our economy with thousands of jobs beyond just farmers. While domestic petroleum is considerable, there’s no denying that there are foreign firms who want you to use less ethanol.

Until I’m convinced otherwise, a little ethanol at the pump never hurt anybody; but letting petroleum interests determine our opinion of it could be painful to us all in the long run.

*You can read Diane’s blogs, and other posts from farm women across Nebraska at CommonGroundNebraska.com!

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