In 2005, when global warming was still believed to be a manmade crisis and before the technologies of horizontal drilling and hydraulic fracturing combined to unleash a new energy boom in the United States, the Energy Policy Act was passed--mandating that renewable fuels, such as ethanol and biofuel, be added to transportation fuels in escalating amounts over the next decade. It was thought that growing our fuel would give America energy independence and reduce carbon emissions. Neither has turned out to be the case.
Today, there is rare bipartisan angst over the Renewable Fuel Standard, or RFS. Rep. Fred Upton, R-Mich., Chairman of the House Energy and Commerce Committee says; "The current system cannot stand." The National Journal reports that Senate Democrats are worried about the RFS. Solutions range from repeal, to reform, to temporary modifications of the portion of the law that requires increasing amounts of biofuels be blended with gasoline each year.
Ethanol in the United States is generally made from corn. However, last summer's drought put pressure on the supply -- raising questions about the viability of corn-based ethanol and making allies of the fossil fuel and livestock industries and environmentalists.
On July 24, the House Subcommittee on Energy and Power concluded a two-day hearing: "Overview of the renewable fuel standard (RFS): Stakeholder perspectives."
At the hearing, Bill Roenigk of the National Chicken Council said his producers are confronting higher and more volatile feed prices, the result of diverting corn into gas tanks. He sided with Jack Gerard, of the American Petroleum Institute, who described the RFS as "completely untethered from reality" and a "grave economic threat" that must be stopped. The high corn prices are making ethanol more expensive and raising the price of gasoline. Scott Faber from the Environmental Working Group said the corn ethanol mandate has increased greenhouse gas emissions and caused other environmental harm.
Ethanol has been made in the United States for 32 years, yet 2012 production was 600 million gallons less than the previous year. Regardless of production, the law mandates that ever-increasing amounts of ethanol be blended into gasoline. The difference is being made up by importing Brazilian sugar-based ethanol.
The hearing addressed a range of topics including the RFS's potential effect on fuel and food prices, and impacts on the nation's agricultural sector and the environment. But, it didn't cover how much the biofuel mandates are costing the American taxpayer, the number of ethanol companies that have gone bankrupt while receiving taxpayer funds, or the existing crony corruption.
When government mandates something that doesn't exist, it gives rationale to fund experimental projects designed to meet the need. The Department of Energy awarded up to $564 million in stimulus funds to 19 integrated biorefinery projects and since 2009 the Biorefinery Assistance Program has given out about $1.2 billion in treasury-backed loan guarantees for 10 biofuel companies.
In her newest post to the Green Corruption Files, Christine Lakatos highlights three biofuel companies. During an energy speech in Florida, Obama stated: "We're making new investments in the development of gasoline and diesel and jet fuel that's actually made from a plant-like substance -- algae." Algenol Biofuels, which Forbes calls "Obama's favorite algae company," is in Florida. In December 2009, Algenol Biofuels received $25 million in federal stimulus grants from the Obama administration and, in 2010, a $10 million grant from the county.
Then there's Sapphire Energy, which received a $50 million grant from the DOE and a loan guarantee for up to $54.5 million through the Biorefinery Assistance Program. Executives and employees at Sapphire contributed almost exclusively to Democratic campaigns. Even the private funds raised for Sapphire have Obama connections: Bob Nelsen, a founding partner of ARCH Ventures -- a Sapphire investor, served on Obama's National Finance Committee during the 2008 campaign, and Microsoft's Bill Gates is also a Sapphire investor. In 2008 and 2012, Microsoft donated more than $800,000 each year -- making them number four and number two, respectively, on the top Obama donor lists. In 2012, Bill and Melinda Gates personally contributed $71,800 to Democrats.
The really interesting story is Solazyme, as it got both a $21 million DOE stimulus grant in 2009, and, in 2011, received a guaranteed government customer for its biofuel paying four to seven times the regular fuel price: the U.S. Navy. TJ Glauthier is a "Strategic Advisor" for Solazyyme. Previously Glauthier held key positions in the Clinton administration and the DOE and served on Obama's 2008 White House Transition Team. He is widely credited with helping to develop the energy provisions of the American Recovery and Reinvestment Act of 2009. Solazyme's officials, including Glauthier, contributed at least $360,000 to Democrats between 2007 and 2012. Other Solazyme Obama/Democrat connections include its lobbyist, and co-founder. No wonder Solazyme got the deal for the "Single largest purchase of biofuel in government history" that swindles taxpayers while ravaging national security.
Maybe ethanol's part in the green-energy crony-corruption scandal will need its own hearing. There's a lot more to cover! With Gina McCarthy as the new administrator at the Environmental Protection Agency there's bound to be more as she's reported to be "a consistent ethanol-industry defender."
While several members of the Energy and Power Subcommittee agree: "There's probably not enough congressional support for completely repealing the standard," Upton concluded: "I hope we can start a discussion that considers a host of potential modifications and updates to the RFS… I am absolutely committed to ensuring we deliver workable reforms."
The author of Energy Freedom, Marita Noon serves as the executive director for Energy Makes America Great Inc. and the companion educational organization, the Citizens' Alliance for Responsible Energy (CARE). Together they work to educate the public and influence policy makers regarding energy, its role in freedom, and the American way of life. Combining energy, news, politics, and, the environment through public events, speaking engagements, and media, the organizations' combined efforts serve as America's voice for energy.