Nothing says 'populism' like forcing us to buy more ethanol

Nothing says “populism” like forcing consumers to use corn in their fuel in order to enrich a handful of corn producers in Iowa, all the while driving up the cost of food and fuel and putting blue-collar independent refinery workers out of jobs. Yet that is precisely what the ethanol lobby is enjoying, as it gets the administration to ramp up blending mandates on the fuel industry while relieving the ethanol industry of environmental regulations others must abide by.

The Trump administration has already increased the statist ethanol mandate on fuel blenders and has already allowed the industry to produce E-15 blends (gasoline with 15 percent ethanol blended in) even in the summer. But that is not enough for the corn robber barons. The Wall Street Journal reports that ethanol lobbyists and Iowa politicians pushed the president during his trip to Iowa to limit the waivers granted to small oil refiners that ease the pain of the ethanol mandate.

Sen. Deb Fischer (R., Neb.), who was on the trip with the president, said farmers were thankful but wanted to convince the administration the waivers for small refiners are a big deal.

“It’s very important that we make that the next step now so that the EPA is held accountable. It hasn’t always happened in the past,” Ms. Fischer said in an interview. “That affects family farms’ livelihoods.”

Sen. Joni Ernst (R., Iowa) added that the EPA in recent years “has had a harmful habit of passing out these waivers left and right, to refineries big and small. That’s got to stop.” She has spoken recently with Mr. Trump directly about the issue.

It’s shocking to watch GOP senators adopt the mentality of the Left that one industry is entitled to a mandate forcing other industries to use its product, especially something as awkward and odious as jamming corn into fuel. What happened to allowing consumers the right to choose? Why shouldn’t consumers and oil refiners be allowed to blend and purchase whatever fuel they prefer? Shouldn’t the ethanol industry be free to sell whatever products it prefers and everyone else be free to reject or accept them based on quality of product, not the boot of a government mandate?

Of course, it’s the small, independent refiners who are hurt, not the big oil companies. A small lobby of farmers used the boot of government to mandate the blending of their product into the nation’s gasoline supply, a product that could never have appealed to a free market driven by consumer choice and satisfaction. Oil refiners must purchase credits, called renewable identification numbers (RINs), as ransom money for not meeting the impossibly high centrally planned targets of the Renewable Fuels Standard (RFS). Then, in a classic case of venture socialism, an entire market of trading and speculating has been created from the big oil industry RINs.

Now the big oil industry has an entire commodities market based on this socialist policy to trade credits. The bidding up of credits by speculators has put independent refiners, such as Philadelphia Solutions, out of business.

Pennsylvania Sen. Pat Toomey, who has seen many jobs lost in the Keystone State, is frustrated with the one-sided influence of the ethanol lobby. He said in a statement emailed to CR:

“EPA and the courts have made clear that waivers must be issued to small refineries suffering severe economic harm from the ill-conceived corn ethanol mandate. It is unfortunate that the ethanol lobby, on the heels of securing the prize of year-round E15, is now calling for EPA to flout this statutory requirement. Big Corn’s latest demand is a reminder that their agenda is about securing as much corporate welfare as possible, even if it comes at the expense of U.S. consumers.”

The media has couched this battle as a war between agriculture states and oil-producing states, but big oil has already co-opted the ethanol cartel. It’s the small companies that get hurt by these draconian regulations, as we see with similar regulations in the health care field and other industries. Moreover, this is not an equal fight. Ethanol lobbyists have no constitutional right to force other industries to use their odious and inefficient product. They are free to produce whatever they want, independent of interference from the oil industry, whereas the oil industry is forced to use their product simply because of an unconstitutional mandate.

Editor's note: This article has been updated to add Sen. Pat Toomey's comments.

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