Blumenauer: “heavily subsidized corn-based ethanol is a fool’s game”
by George SeldesJune 4th, 2007 at 15:36:42
Congressman Earl Blumenauer blogs on food and farm policy here, neatly noting that our ethanomania is a “fools game” that we have to overcome.
Note that, as a politician, he’s required to salute the phrase “energy independence” as a ritual matter, rather than stating the reality that no country with less than 5% of the world’s populace consuming 25% of its energy (MORE if you count the embedded energy in everything we import–which is to say, essentially everything these days) can, with a straight face, even dream about energy “independence.”
The independence we really need most is the strict independence of our food systems from our vehicles.
An excerpt from the Congressman:
That’s why I’m embarking on an effort to promote a Food and Farm Bill of Rights:
- Americans have a right to a policy free of special interest giveaways: Current farm policy favors corporate special interests. Fully 70 percent of the payments go to the top 10 percent of farmers, and even more of that benefit is concentrated for the large processors. What’s more, aid is so concentrated in a few powerful states that the support received by most states is almost negligible. We deserve a food and farm policy that serves all Americans, not just the politically-connected.
- American taxpayers have a right to a fiscally responsible policy: Today’s Farm Bill contains some of the federal government’s largest programs. We deserve a food and farm policy that ensures our tax dollars are invested in fiscally sound policies and programs that fit in with the priorities of the American farmer and taxpayer.
- Americans have a right to a policy that serves all farmers: Our current farm policy ensures high profits for a few select commodities while neglecting the needs of many other valuable commodities and smaller producers. In fact, 60 percent of America ’s farmers and ranchers get no support whatsoever. We deserve a food and farm policy that supports producers and helps them access new local markets, thereby generating jobs by adding value to their products.
- Americans have a right to a safe and healthful food supply: Recent crises in food supplies (Hurricanes Katrina and Rita) and food safety (fresh spinach and tainted pet foods) are painful reminders of the vulnerability of our food supplies and distribution systems. We deserve a food and farm policy that guarantees a safe and healthful food supply in this country, in good times and in bad.
- American children have a right to good nutrition: Children who are hungry perform poorly in school and are at greater risk for long-term health problems. We deserve a food and farm policy that makes sure our children are well nourished by allowing more healthful choices and opening up access to fruits and vegetables.
- Americans have a right to local supplies of fresh food: Too many Americans do not have the option of buying affordable, locally-grown fresh food. We deserve a food and farm policy that includes programs that deliver healthy food to all communities, regardless of location, class, or economic standing.
- Americans have a right to a policy that promotes energy independence: The pursuit of heavily subsidized corn-based ethanol is a fool’s game fueled only by massive government subsidies and regulations not justified by the science or economics. We deserve a food and farm policy that enables our farmers and ranchers to produce vast quantities of renewable energy: wind, solar, in some cases small-scale hydro, geothermal and biomass.
- Americans have a right to a policy that protects the environment: Virtually every urban area is surrounded by productive farmland that also provides important environmental services – wildlife habitat, carbon sinks, clean water – as well as landscapes and vistas that define our sense of place. We deserve a food and farm policy that promotes good stewardship of the environment and our natural resources.
- Americans have a right to preserve farmland from sprawl: In many areas of the country the pressures of sprawl are forcing farmers off of their land. We deserve a food and farm policy that gives farmers the tools they need to protect their land – and our heritage – from development pressures.
- Americans have a right to a policy that fosters sustainable farming practices: The current farm policy offers conflicting messages about good farming practices, sometimes promoting sustainable practices while other times offering incentives that undermine the long-term health of our soil and water resources. We deserve a food and farm policy that enables farmers to be responsible with their land so that they can pass it on to the next generation.
There are those who will claim that there isn’t enough money to be able to take care of all the needs of American agriculture and nutrition and the landscape, so that in their minds the priority should go to keep the system as it is and lavish the most support on those who have benefited most in the past. It is time to turn that philosophy on its head and concentrate more broadly the money to help all of agriculture.
Before anyone posts to note that biodiesel is not the same as ethanol, let me agree in advance. If there were a bill in the Oregon Legislature dealing with reusing waste vegetable oils by turning them into biodiesel fuel, I’d be a big backer. Meanwhile, the Farm Bureau has somehow managed to convince Oregon’s green groups to support yet another layer of subsidies for ethanol (HB 2210), with no mention of where the water is to come from or any requirement that the subsidies even reduce fossil fuel consumption at all.
June 5th, 2007 at 11:06 am
I would very much encourage you take another look at HB 2210. So many people take the time to blog without reading the actual bill that they are taking on. I worked on the governor’s renewable energy working group for many months with a very large stakeholder group from people all around the state. HB 2210 deserves passage and support.
2210 provides production tax credits for several agricultural products that could beenifit rural communities without jeopardizing other crops or affected the local food supply.
Oil seed crops get $0.05 per pound.
Used cooking oil or waste grease gets $0.10 per gallon.
Slash from forests during health stewardship projects receives $10 per green ton. Even yard debris that becomes a biofuel receives $5.00 per wet ton.
There are no corn susbsidies. Those susbsidies occur on a federal level and Oregon can’t influence these markets.
In my opinion the beginning of a biofuels industry is underway in Oregon. A biorefinery in Salem is converting waste vegetable oil from Willamette Valley restaurants and canola grown by Eastern Oregon farmers into biodiesel, and biorefinery plants are being built along the Columbia River to convert corn and other grains, in the near term, and waste agricultural and forestry products, in the long term, to ethanol. All of the models I have seen in researching alternative fuels says that in 8 to 10 years we will be around 95% cellulosic biofuels and 5% corn ethanol. In the short term we help a farmer in the midwest, but that is obviously not the end game.
As soon as 5 million gallons of biodiesel are produced in Oregon, petroleum distributors will be required to blend a small percentage of biodiesel into the diesel sold in Oregon, with a similar phased requirement for blending ethanol into gasoline. One of OEC’s main priorities this legislative session was this “renewable fuel standard,” as well as tax incentives to help Oregon’s rural communities provide feedstocks for biofuels. We ensured that the renewable fuel standard can’t be met by biodiesel produced from imported palm oil (palm plantations are supplanting tropical forests) and supported legislation that ensures corn production does not receive feedstock tax credits (as we all know conventionally grown corn requires heavy pesticide application and irrigation).
As soon as the renewable fuel standard is in place, a portion of every dollar you spend at the pump will support fuels produced right here in Oregon by Oregon farmers and workers. These biofuels are also cleaner and have a lower carbon footprint than petroleum fuels. In the coming months, OEC will work to ensure that the rules implementing this legislation are written to favor the biofuel feedstocks and biorefinery operations that are most environmentally beneficial while meeting sustainability guidelines.
June 5th, 2007 at 11:39 am
Interesting. Thank you for commenting from the inside.
Let me clarify one point where you state that “there are no corn subsidies” in HB 2210:
Are you saying that Sect. 5(2):
would not apply to corn?? Am I misreading this? How is corn not a grain? Is there something I’ve overlooked that specifically bars corn as a feedstock, as you state?
Moreover, I have read the bill several times, and I find no requirement for these refineries to use renewable energy in processing — therefore, they will use coal or natural gas to cook the ethanol.
Also, if economic cellulosic ethanol is 8 to 10 years away (where, according to Robert Rapier, who got his masters working on cellolosic, it has been for decades), why would we subsidize UNeconomic ethanol from other sources NOW? The refineries needed to produce corn ethanol are not rapidly convertible, so why would we want to encourage them with a subsidy? Wouldn’t that money be better spent in the lab?
Lastly, would you support or oppose recalculating the subsidy so that it only applies to the NET renewable energy, so that we’re not using Oregon tax dollars to (a) subsidize fossil fuel use and (b) further increase price pressure on fossil fuels?
June 5th, 2007 at 1:04 pm
There was a recent companion bill SB 814 that was passed to deal with the corn issue. I believe it now reads crops excluding corn. It has support from just about all parties.
It does open the door from using corn stover, other corn wastes and other ag biomass.
The alternative energy requirement during processing is likely to happen during rulemaking session. My larger question is: Can we really mandate that everyone must buy green power? If someone like TriMet was required to do this for MAX it would cost three times as much to ride and it would really make it hard for some lower income people to use the service.
With my apologies to Robert Rapier cellulosic ethanol is not 8 -10 years away. If the biofuels bill passes as does 2211 the BETC increase. You may very well see cellulosic in the Roseburg area in the next two to three years. I have my google alerts setup to find all rss feeds related to cellulosic and I know of about three operating facilities right now and one that they are working to site on the Oregon/Idaho border. You do people a disservice when you msirepresent what is actually happening on the ground.
I will be working this summer to ensure that the biofuels ultimately delivered to Oregonians are the lowest carbon fuels possible. This means life cycle analysis is conducted, impacts to biodiversity are managed and global warming impacts are all researched.
I will also be actively persuing ways to increase the CAFE standards, supporting the Oregon University System for biobased research and pass meaningful global warming legislation.
I will not spend my day blogging. My energy is better spent actively working on policy issues.
June 5th, 2007 at 1:23 pm
Well, thanks for stopping by. I’m sorry you didn’t make clear what you think I’ve misrepresented, so I guess we’re just left with that charge out there and no way to respond to it.
To respond to two things you did say:
Didn’t SB 838 (25% by 2025) answer that your question about green power mandates? Aren’t you advocating a mandate for more expensive fuels by requiring a minimum percentage be blended?
As for renewable energy during processing, unless it’s in the statute, wouldn’t any attempt to make a rule requiring that biofuels producers use only non-fossil fuels be defeated instantly in court as exceeding the authority of the agency?
If the technology is advancing without the subsidy, what’s the subsidy for again?
June 5th, 2007 at 1:42 pm
Didn’t SB 838 (25% by 2025) answer that your question about green power mandates? Aren’t you advocating a mandate for more expensive fuels by requiring a minimum percentage be blended?
The true costs of power and petroleum have been manipulated from their offset. If searching for petroleum, fighting a war, and reversing global warming was factored in correctly how much would petroleum really cost? $10/12/14 a gallon.
If it comes to paying less to Chavez and more to a grower/producer in Eastern Oregon which would you choose? Will we one day look back and tell our children we couln’t do anything about climate change because it simply cost too much?
The truth is that b-5 biodiesel costs less than petroelum diesel presently and is less volatile concerning price swings. In some parts of the midwest E85 is nearly 15 cents a gallon cheaper and the air quality benefits are worth the cost. What we are asking for a standard that if reached would require 2% of diesel to come from a renewable source rather than a finite one and the same for ethanol with a bridge to cellulosic.
As for renewable energy during processing, unless it’s in the statute, wouldn’t any attempt to make a rule requiring that biofuels producers use only non-fossil fuels be defeated instantly in court as exceeding the authority of the agency?
That is a possibility, but I won’t give in that easily.
If you own the technology to make biofuels from cellulosic are you going to cite your facility in a state where they have a renewable fuel standard or not? Obviously yes. Are you going to set roots in a community with production tax credits for your feedstocks? Again yes. Will a bank loan you money if you are in state with no standard and no tax credit to write off some on the construction costs for your facility? Probably not.
Is the petroleum industry the most susbsidized industry in the world. Absolutely.
June 5th, 2007 at 3:35 pm
Kevin, just so you know, I looked for the bill you mentioned, SB 814, and found a totally unrelated bill having nothing to do with biofuels. By searching on the term “biofuel” in the 2007 bills & measures I find SB 938, which includes language that seems identical to HB 2210.
So I’m still not seeing where subsidized corn ethanol is ruled out. Can you provide a better pointer?
June 6th, 2007 at 7:11 am
Concerns raised by Oregon’s agricultural producers over production tax credits in the bill for corn and wheat were addressed last week in a separate bill (SB 814). SB 814, which excludes corn as an eligible feedstock under the biofuels production tax credit and delays the eligibility of wheat under the credit until 2009, passed the House Revenue Committee unanimously. It now heads for the House floor for passage, and then the Senate floor for concurrence.
I just looked at 814 and I see the language that spells everything out. So I am not sure what you were seeing. SB 938 is essentialy the same as 2210 but Salem folks moved 2210 from the House and left 938 alone. Here is the 814 language.
SECTION 4. If House Bill 2210 becomes law, section 2,
chapter ___, Oregon Laws 2007 (Enrolled House Bill 2210), is
amended to read:
{ + Sec. 2. + } (1) As used in this section:
(a) ‘Agricultural producer’ means a person that produces
biomass that is used in Oregon as biofuel or to produce biofuel.
(b) ‘Biofuel’ means liquid, gaseous or solid fuels derived from
biomass.
(c) ‘Biomass’ means organic matter that is available on a
renewable or recurring basis and that is derived from:
(A) Forest or rangeland woody debris from harvesting or
thinning conducted to improve forest or rangeland ecological
health and reduce uncharacteristic stand replacing wildfire risk;
(B) Wood material from hardwood timber described in ORS 321.267
(3);
(C) Agricultural residues;
(D) Offal and tallow from animal rendering;
(E) Food wastes collected as provided under ORS chapter 459 or
459A;
(F) Yard or wood debris collected as provided under ORS chapter
459 or 459A;
(G) Wastewater solids; or
(H) Crops grown solely to be used for energy.
(d) ‘Biomass’ does not mean wood that has been treated with
creosote, pentachlorophenol, inorganic arsenic or other inorganic
chemical compounds.
(e) ‘Biomass collector’ means a person that collects biomass to
be used in Oregon as biofuel or to produce biofuel.
(2)(a) An agricultural producer or biomass collector shall be
allowed a credit against the taxes that would otherwise be due
under ORS chapter 316 or, if the taxpayer is a corporation, under
ORS chapter 317 or 318 for:
(A) The production of biomass that is used in Oregon as biofuel
or to produce biofuel; or
(B) The collection of biomass that is used in Oregon as biofuel
or to produce biofuel.
(b) A credit under this section may be claimed in the tax year
in which the agricultural producer or biomass collector transfers
biomass to a biofuel producer.
{ + (c) Notwithstanding paragraph (a) of this subsection, a
tax credit is not allowed for grain corn, but a tax credit shall
be allowed for other corn material. + }
(3) The amount of the credit shall be calculated as follows:
(a) Determine the quantity of biomass transferred to a biofuel
producer during the tax year;
(b) Categorize the biomass into appropriate categories; and
(c) Multiply the quantity of biomass in a particular category
by the appropriate credit rate for that category, expressed in
dollars and cents, that is prescribed in section 5 { + ,
chapter ___, Oregon Laws 2007 (Enrolled House Bill 2210) + }
{ – of this 2007 Act – } .
(4) The amount of the credit claimed under this section for any
tax year may not exceed the tax liability of the taxpayer.
(5)(a) A biofuel producer shall provide a written receipt to an
agricultural producer or biomass collector at the time biomass is
transferred from the agricultural producer or biomass collector
to the biofuel producer. The receipt must state the quantity and
type of biomass being transferred and that the biomass is to be
used to produce biofuel.
(b) Each agricultural producer or biomass collector shall
maintain the receipts described in this subsection in their
records for a period of at least five years after the tax year in
which the credit is claimed or for a longer period of time
prescribed by the Department of Revenue.
(6) The credit shall be claimed on a form prescribed by the
Department of Revenue that contains the information required by
the department.
(7) Any tax credit otherwise allowable under this section that
is not used by the taxpayer in a particular tax year may be
carried forward and offset against the taxpayer’s tax liability
for the next succeeding tax year. Any credit remaining unused in
the next succeeding tax year may be carried forward and used in
the second succeeding tax year, and likewise any credit not used
in that second succeeding tax year may be carried forward and
used in the third succeeding tax year, and any credit not used in
that third succeeding tax year may be carried forward and used in
the fourth succeeding tax year, but may not be carried forward
for any tax year thereafter.
(8) In the case of a credit allowed under this section:
(a) A nonresident shall be allowed the credit under this
section in the proportion provided in ORS 316.117.
(b) If a change in the status of the taxpayer from resident to
nonresident or from nonresident to resident occurs, the credit
allowed by this section shall be determined in a manner
consistent with ORS 316.117.
(c) If a change in the taxable year of the taxpayer occurs as
described in ORS 314.085, or if the department terminates the
taxpayer’s taxable year under ORS 314.440, the credit allowed
under this section shall be prorated or computed in a manner
consistent with ORS 314.085.
SECTION 5. If House Bill 2210 becomes law, section 6,
chapter ___, Oregon Laws 2007 (Enrolled House Bill 2210), is
amended to read:
{ + Sec. 6. + } { + (1) + } Sections 2, 3 and 5 { + ,
chapter ___, Oregon Laws 2007 (Enrolled House Bill 2210), + }
{ – of this 2007 Act – } apply to tax credits for tax years
beginning on or after January 1, 2007, and before January 1,
2013.
{ + (2) Notwithstanding subsection (1) of this section, a tax
credit is not allowed for wheat grain (other than nongrain wheat
material) before tax years beginning on or after January 1, 2009,
or on or after January 1, 2013. + }
SECTION 6. { + This 2007 Act takes effect on the 91st day
after the date on which the regular session of the Seventy-fourth
Legislative Assembly adjourns sine die. + }
One thing I will point out is that without these credits the ag community is not going to reap the benefits of home grwon biofuels. Some other farm community will. The same goes for citing new industries and facilities. If Oregon wants a chance to lead the nation in renewable energy this legislation is one step in the right direction.
June 6th, 2007 at 7:16 am
Concerns raised by Oregon’s agricultural producers over production tax credits in the bill for corn and wheat were addressed last week in a separate bill (SB 814). SB 814, which excludes corn as an eligible feedstock under the biofuels production tax credit and delays the eligibility of wheat under the credit until 2009, passed the House Revenue Committee unanimously. It now heads for the House floor for passage, and then the Senate floor for concurrence.
SB 814
SECTION 4. If House Bill 2210 becomes law, section 2,
chapter ___, Oregon Laws 2007 (Enrolled House Bill 2210), is
amended to read:
{ + Sec. 2. + } (1) As used in this section:
(a) ‘Agricultural producer’ means a person that produces
biomass that is used in Oregon as biofuel or to produce biofuel.
(b) ‘Biofuel’ means liquid, gaseous or solid fuels derived from
biomass.
(c) ‘Biomass’ means organic matter that is available on a
renewable or recurring basis and that is derived from:
(A) Forest or rangeland woody debris from harvesting or
thinning conducted to improve forest or rangeland ecological
health and reduce uncharacteristic stand replacing wildfire risk;
(B) Wood material from hardwood timber described in ORS 321.267
(3);
(C) Agricultural residues;
(D) Offal and tallow from animal rendering;
(E) Food wastes collected as provided under ORS chapter 459 or
459A;
(F) Yard or wood debris collected as provided under ORS chapter
459 or 459A;
(G) Wastewater solids; or
(H) Crops grown solely to be used for energy.
(d) ‘Biomass’ does not mean wood that has been treated with
creosote, pentachlorophenol, inorganic arsenic or other inorganic
chemical compounds.
(e) ‘Biomass collector’ means a person that collects biomass to
be used in Oregon as biofuel or to produce biofuel.
(2)(a) An agricultural producer or biomass collector shall be
allowed a credit against the taxes that would otherwise be due
under ORS chapter 316 or, if the taxpayer is a corporation, under
ORS chapter 317 or 318 for:
(A) The production of biomass that is used in Oregon as biofuel
or to produce biofuel; or
(B) The collection of biomass that is used in Oregon as biofuel
or to produce biofuel.
(b) A credit under this section may be claimed in the tax year
in which the agricultural producer or biomass collector transfers
biomass to a biofuel producer.
{ + (c) Notwithstanding paragraph (a) of this subsection, a
tax credit is not allowed for grain corn, but a tax credit shall
be allowed for other corn material. + }
(3) The amount of the credit shall be calculated as follows:
(a) Determine the quantity of biomass transferred to a biofuel
producer during the tax year;
(b) Categorize the biomass into appropriate categories; and
(c) Multiply the quantity of biomass in a particular category
by the appropriate credit rate for that category, expressed in
dollars and cents, that is prescribed in section 5 { + ,
chapter ___, Oregon Laws 2007 (Enrolled House Bill 2210) + }
{ – of this 2007 Act – } .
(4) The amount of the credit claimed under this section for any
tax year may not exceed the tax liability of the taxpayer.
(5)(a) A biofuel producer shall provide a written receipt to an
agricultural producer or biomass collector at the time biomass is
transferred from the agricultural producer or biomass collector
to the biofuel producer. The receipt must state the quantity and
type of biomass being transferred and that the biomass is to be
used to produce biofuel.
(b) Each agricultural producer or biomass collector shall
maintain the receipts described in this subsection in their
records for a period of at least five years after the tax year in
which the credit is claimed or for a longer period of time
prescribed by the Department of Revenue.
(6) The credit shall be claimed on a form prescribed by the
Department of Revenue that contains the information required by
the department.
(7) Any tax credit otherwise allowable under this section that
is not used by the taxpayer in a particular tax year may be
carried forward and offset against the taxpayer’s tax liability
for the next succeeding tax year. Any credit remaining unused in
the next succeeding tax year may be carried forward and used in
the second succeeding tax year, and likewise any credit not used
in that second succeeding tax year may be carried forward and
used in the third succeeding tax year, and any credit not used in
that third succeeding tax year may be carried forward and used in
the fourth succeeding tax year, but may not be carried forward
for any tax year thereafter.
(8) In the case of a credit allowed under this section:
(a) A nonresident shall be allowed the credit under this
section in the proportion provided in ORS 316.117.
(b) If a change in the status of the taxpayer from resident to
nonresident or from nonresident to resident occurs, the credit
allowed by this section shall be determined in a manner
consistent with ORS 316.117.
(c) If a change in the taxable year of the taxpayer occurs as
described in ORS 314.085, or if the department terminates the
taxpayer’s taxable year under ORS 314.440, the credit allowed
under this section shall be prorated or computed in a manner
consistent with ORS 314.085.
SECTION 5. If House Bill 2210 becomes law, section 6,
chapter ___, Oregon Laws 2007 (Enrolled House Bill 2210), is
amended to read:
{ + Sec. 6. + } { + (1) + } Sections 2, 3 and 5 { + ,
chapter ___, Oregon Laws 2007 (Enrolled House Bill 2210), + }
{ – of this 2007 Act – } apply to tax credits for tax years
beginning on or after January 1, 2007, and before January 1,
2013.
{ + (2) Notwithstanding subsection (1) of this section, a tax
credit is not allowed for wheat grain (other than nongrain wheat
material) before tax years beginning on or after January 1, 2009,
or on or after January 1, 2013. + }
SECTION 6. { + This 2007 Act takes effect on the 91st day
after the date on which the regular session of the Seventy-fourth
Legislative Assembly adjourns sine die. + }
June 6th, 2007 at 10:46 am
Kevin, thanks for adding that, and sorry for my confusion, the language of the house amendments were not available yesterday.
If there’s anyone following this, you can find the information about bills here
http://www.leg.state.or.us/searchmeas.html
You can enter a bill number and check the appropriate block to go to the page giving the progress of each bill (say, e.g., HB 2210 or SB 814), and that page will link you to the text of various versions.
http://www.leg.state.or.us/07reg/measures/sb0800.dir/sb0814.a1ha.html
I will try to respond the other comments you left as soon as I can.
June 6th, 2007 at 2:13 pm
Kevin, perhaps the best short response to your pot-pourri of claims is here:
http://www.globalsubsidies.org/article.php3?id_article=6&var_mode=calcul
To sum up the ethanol issue, it’s safe to say this:
1) if your concern is climate change, there are much more effective responses that would produce far more greenhouse gas reduction for far less money;
2) if your concern is helping rural farmers, then hitching them to a crop for which the demand only exists through subsidy is a poor strategy;
3) if your concern is improving transport efficiency, then money spent on providing replacement liquid fuels is a poor strategy.
June 7th, 2007 at 11:33 am
Kevin wrote
Are you suggesting that at some point the price for biofuels will dip below the price of petroleum fuels? To the extent that ethanol replaces gas (at a rate of about 3 gallons of ethanol for every two gallons of gas to attain the same energy output) it will not be priced any lower, and it’s currently priced higher, even neglecting the subsidies. If it were possible for biofuels to undercut fossil fuels at any scale we would see it happening already. Instead, as would be expected, the price of ethanol floats on top of the price of its fossil fuel inputs.
If you want to argue for stiff fossil fuel taxes (NOT designated as gas taxes, which have been captured by the road gang to further promote roads) then I’m right there with you—but don’t expect that making fossil fuels pay more of their true costs will create a situation where biofuels will be cheaper.
And if you could raise the price of fossil fuels but somehow keep the price of biofuels down, then you’d have a sharp demand increase for biofuel feedstocks to the point where food prices would shoot up through the roof. There is simply no way to operate such an energy intensive mode of living (car dominated) without paying the price for all that energy, either through taxes, through food prices, or through energy prices. As you note, we’ve made the accounting hard by hiding a lot of the cost of fossil energy use, and I certainly agree that we ought to fix that–but that’s not what the Oregon biofuels bills do at all. On the contrary, they add to the opacity of the accounting by using general tax revenue offsets to reduce the apparent price of biofuels, thus making it even harder to get a straight accounting.
Our main oil import source is Canada, then Mexico, then Saudi, then Venezuela — though we’re going to see less and less Venezuelan oil soon as Chavez decides he would rather sell to the Chinese than us —- apparently he takes umbrage at our supporting the coup there, go figure.
But if offered a choice between paying MORE to a farmer in E. Oregon or less to anyone, obviously I would prefer to keep the money in state so long as that farmer doesn’t turn around and send it out of state. That is, I’d be happy to take the entire amount budgeted for biofuels subsidies and make them available to Oregon farmers so long as those farmers deduct their fossil fuel inputs. If you want to stop sending money out of state, then don’t subsidize gross biofuels—pay a fair price for the NET RENEWABLE CONTENT no matter how it’s derived. But, as written, laundering the coal through an ethanol facility doesn’t keep the money in state–it just stops here long enough to collect a subsidy, and then does to the coal company.
While I think everyone agrees that biodiesels can theoretically be a superior system, the biofuels bills yoke biodiesel to ethanol. Split the two apart entirely and use the same principles for sustainability on the biodiesel portion (pay only on the net renewable energy gain in the biodiesel, no subsidy for imported feedstock, and no subsidy unless the soil is in as good or better condition each year than the previous one) and you might have something.
I’m sorrry, but even a lawyer with a mail-order degree could shred an agency rule trying to go beyond the statute in that way, and the biofuels industry doesn’t lack for good lawyers. No court in America, much less Oregon, would find a requirement for renewable energy in processing in the bills you cite (SB 938, SB 814 amendments, HB 2210), so there is no requirement for using renewable energy in processing. If it’s not in the statute, it’s not in the rules (or at least it won’t be for long).
Is that the purpose of these bills then? To lure biofuels plants? But then we have to ask, why do we want biofuels plants? It’s circular as hell — it seems that the bills have assumed that we want biofuels, so we should want biofuels plants, so we can have biofuels. I’ve asked JD and I’ve asked you, but let me ask again: what problem or problems are biofuels the solution to?
Fighting petroleum industry subsidies with subsidies for biofuels is like trying to fight obesity and heart disease with ice cream sundaes. If our goal is to rationalize the energy system so that we don’t destroy the climate and we prepare ourselves for the problems attendant with peak oil, then the last thing we should be doing is trying to prop up the internal combustion engine in the current context. I’ve already discussed how much this argument sounds like “But Johnny got subsidies!” For environmentalists to adopt this is just sad.