Environmental Groups Oppose Ethanol Bailout in Stimulus Package


Environmental groups and food producers oppose the Renewable Fuels Association’s requests for support from the stimulus package that includes $1 billion to finance current operations and a $50 billion federal loan guarantee, as well as job tax credits.


The Clean Air Task Force, Environmental Working Group, Friends of Earth, and the Network for New Energy Choices released a statement today saying that federal government subsidies and mandates for corn-based ethanol produce potentially catastrophic consequences to the environment, and have no payback to taxpayers in terms of alleviating global warming effects, providing for energy security, or even simply reducing the cost of driving. The group’s stance:

“With evidence mounting that biofuels are worsening global warming and harming water quality and wildlife habitat, it makes no sense for the federal government to lavish billions more on an industry already flush with government assistance. It is time for ethanol to stand on its own.”

The spokesman for Renewable Fuels Association, Matt Hartwig, responded: “We are not asking for a bailout or anything like that.”

But environmental groups say that the ethanol industry already receives more federal support than any other renewable energy program. According to the EWG statement, two out of every three dollars that the government spends on what it calls renewable energy programs (including wind, solar, and geothermal) already goes to the ethanol industry.

“It’s utterly irresponsible to continue to expand this conventional biofuels industry.” – Craig Cox, Environmental Working Group

Food producers aren’t happy either, saying that America should be looking toward second generation solutions that don’t compete with the need to produce affordable food. “An additional $50 billion in government support for the corn ethanol industry will only calcify the status quo and reduce the urgency for innovation,” says Scott Openshaw, with the Grocery Manufacturers of America.

The RFA replied to the detractors, stating that “The RFA recognizes that by stimulating increased production, innovation, and investment in new technologies and cellulosic feedstocks, a revitalized renewable fuels industry can help bail out the flagging U.S. economy and lessen America’s dependence on foreign oil.”

Update: Just after finishing this post, I Tweeted it, and got a response from @nathanschock, saying “The environmental groups are opposing something that doesn’t exist.” He left a link to Biofuels Journal, which published this statement from RFA:

“America’s ethanol producers share the vision of President-elect Obama of a domestic industry that is innovating to include ethanol production from a wide array of materials including switchgrass, wood chips, and municipal solid waste.

That vision can only become a reality if today’s ethanol technologies and producers are successful. As such, the RFA is having discussions with the Obama team on how ethanol fits into a green stimulus package.

Today, ethanol is the only alternative transportation fuel having any impact reducing America’s dependence on foreign oil. Moreover, ethanol is uniquely poised to employ new technologies and scale up production significantly in the short term to greatly reduce imports of foreign oil and more meaningfully help address the issue of global warming.

Ethanol production must be at the core of any green initiatives designed to reduce foreign oil dependence, create economic opportunity, and address climate change by changing how Americans fuel their cars.”

I disagree with @nathanschock. Asking for one billion dollars to continue operating sounds like a bailout to me.

Image: Aunt Owwee at Flickr under Creative Commons

Derek Markham

lives in southwestern New Mexico and digs bicycles, simple living, organic gardening, sustainable lifestyle design, slacklining, bouldering, and permaculture. He loves good food, with fresh roasted chiles at the top of his list of favorites. Catch up with Derek on Twitter, RebelMouse, Google+, or at his natural parenting site, Natural Papa!