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    Senators Klobuchar and Grassley Succumb to Corporate Cronyism on Renewable Fuels

    08/28/2013

    Last week, Senators Klobuchar and Grassley called on the Justice Department and Federal Trade Commission to investigate possible anti-competitive practices by oil companies that harm consumers.  In Washington-speak, what the Senators are really asking for is truly atrocious: we want the federal government to force another industry to pay to develop its competition’s business.  And if they don’t, throw them in jail and punish them with fines!

    Of course, the oil companies reject having to pay for ethanol infrastructure and fuel pumps, but since when in America is it anti-competitive to reject having to pay for a competitor’s business?  Does Coke pay for Pepsi machines?  What would McDonalds say if the Senators told them to sell Burger King Whoppers?  With 2012 revenues of $89 billion, why can’t Minnesota-based Archer Daniels Midland (ADM) afford to invest in ethanol infrastructure, particularly if its fuel is cheaper and cleaner than gasoline – a point that the Senators make in their letter?  Well, the answer is actually simple: ADM doesn’t have to bother investing its own money when two U.S. Senators are willing to use their influence as a hammer against the oil industry.

    We would advise the Senators to stop using the talking points given to them by huge corporate farms and crony interests like ADM.  They are doing a huge disservice to the majority of working class families living in their states. 

    Policies like the Renewable Fuel Standard (RFS) only benefit a handful of people – rich farmers and big business interests.  The vast majority of citizens in those states face higher costs for the food and the gasoline that they buy.  That means less disposable income for working families who are already struggling from paycheck to paycheck.

    Of course, the Senators refute those points.  They actually claim that the RFS with its requirement to blend more ethanol with gasoline doesn’t substantially impact the price of corn.  We find that lack of acknowledgment hard to believe and astonishing.  After all, it doesn’t take a PhD in economics to understand that prices for chicken meat will increase if chicken producers have to pay more for corn feed, which will be more expensive if the government requires more and more corn to be blended with gasoline.

    Or are we missing something?

    Perhaps it’s easy for Senators Klobuchar and Grassley to avoid the facts when they aren’t going to the grocery store every week with a limited budget to feed a family of four.  Attending $1,000 plate fundraisers and having tax-payer funded staff run your errands gives you a different perspective on life, making it incredibly easy to accept the talking points of rich farmers and corporate interests like ADM.

    More likely than not, this is simply a short-term political calculation.  So let’s be honest.  Why should the Senators care about the facts when they depend on the backers of the RFS – rich farmers and corporate farm interests to help fund their political campaigns?  Poor Minnesotans and Iowans who care about the price of chicken don’t have the money to give to their political overseers.  So they don’t really matter in the eyes of the Washington Establishment.

    Most people living in Minnesota and Iowa would view using the federal government to force one industry to subsidize another with the threat of prison time and fines as incredibly anti-competitive and downright un-American.  If any entity has committed anti-competitive behavior, we would argue that the guilty party would be ADM, enjoying its opaque influence over Senators Klobuchar and Grassley. 

    When you try to force others to buy your product when there’s no real market for it, you have to expect a push back.  Unfortunately, the ethanol industry has resorted to thuggish tactics, trying to use the federal government as a weapon against its competition and fellow Americans.  We are disappointed in Senators Klobuchar and Grassley as we have been in the past with their support of other renewable energy subsidies, such as the wind production tax credit.  But they’ve taken it to a new level.  Of course, that’s the type of behavior that the RFS has inspired these days.  And that’s why we support its repeal.