Letter to the Editor – Response to Wall Street Journal: Purpose over Panic. Fact over Fear.
by Bob Dinneen (Renewable Fuels Association) Mr. Larry Pope’s July 27th op-ed “The Ethanol Mandate is Worse Than The Drought” calls out for a rebuttal. It is a bit astonishing to read an op-ed in the Wall Street Journal that argues against letting the markets do what they do best: Ration supply and demand.
I understand that Mr. Pope does not like the Renewable Fuel Standard (RFS), a very successful program that is helping to reduce our dependence on foreign oil and lower consumer gasoline costs. Mr. Pope just wants cheap subsidized corn. But the nation needs both feed and fuel. And the Congress long ago determined that continuing to subsidize corn farmers was less effective at stimulating rural economic development than creating new markets that would provide farmers a fair value for their labor and relieve the taxpayer of the burden.
The RFS is doing both. In 1995, the year the RFS was first adopted, the United States was 60% dependent on foreign oil for our liquid transportation fuels. Today, as a result of the RFS, we are only 45% dependent, and ethanol is now 10% of the nation’s motor fuel supply. And the increased demand for grain has increased farm income, reduced farm program costs, and brought idled farmland back into production. Corn farmers planted 96 million acres into corn this year, about 12 million acres more than the 10-year average. Thus, while yields will certainly be far below what anyone would want or expected, the impact on corn supply will not be as great because farmers were responding to the signal sent by the ethanol market. READ MORE and MORE (Ethanol Producer Magazine) and MORE (Washington Times) and MORE (Ethanol Producer Magazine) and MORE (Wall Street Journal) and MORE (Wall Street Journal) and MORE (Renewable Fuels Association update August 16, 2012) and MORE (Kearney Hub)