Iowa senators and ethanol industry want piece of auto bailout: Is Iowa the new Detroit?
With the automakers on the ropes, and the government getting ready to write a big check, and possibly attach some strings to it, the ethanol industry wants to make sure that they are at the end of those strings.
Of course, merely trying to attach efficiency requirements to any bailout of Detroit is not inherently wrong. In fact, if we do bailout the automakers, there should absolutely be a strict commitment that they must make their cars significantly more fuel efficient going forward.
However, with that said, what the ethanol industry and their local senators are trying to do is just more of the same behavior that got the auto industry into the situation they face today. That is, government policy being influenced by self-interested commercial industry groups that are supported by hometown politicians.
For years, Detroit successfully lobbied the federal government to make sure that higher fuel efficiency standards were not imposed, thereby allowing them to continue their business plan of selling as many gas guzzling SUVs to the public as possible. Their success was due, in large part, to the support they found from the congressional delegation from Michigan. Without powerful protectors like Sen. Dingell, their efforts would not have been nearly as effective.
Now, the ethanol industry, which has been widely criticized for being not nearly as much of a solution to climate change as they claim, is asking the government to put additional ethanol mandates into any bailout agreement.
Sen. Grassley of Iowa, supported this position in a letter to the Democratic congressional leadership last week. He argued that any bailout “must be accompanied by enforceable commitments to [flex fuel vehicle] production and alternative fuel use.”
Sen. Harkin, also of Iowa, has sponsored legislation to boost production of e85 vehicles and also wants it linked to any bailout.
In the words of a famous Yankee, this is déjà vu all over again!
It was silly governmental ethanol policies that caused the automakers to turn thousands of their SUVs into “flex fuel” cars, capable of running on e85, despite the fact that 99% of drivers couldn’t find an ethanol station within 100 miles of their homes.
A major reason GM sells these flex fuel cars is because of the break on fuel efficiency standards given to them by the federal government for cars that can burn ethanol. It only costs GM a few hundred dollars to convert a regular car into a flex fuel (and just a couple cents to attach that greenwashed flex fuel emblem to the rear panel). Yet, there is little, if any environmental benefit.
This new proposal to attach new ethanol mandates to a bailout reeks of all the worst in Washington politics. It is a huge benefit for a small commercial group that has a disproportionately large voice in the debate. And the end result would be that two powerful industry groups get to continue in business, subsidized by the American taxpayers, and the pursuit of real efficiency and common good is again lost through lobbying and politics.
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- Ethanol stations coming online as gas prices sit well below E85
- California asks Congress for waiver to regulate vehicle emissions as part of any bailout
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