ACGF Chairman Says Petroleum Industry is Duplicitous by Misleading Congress and Consumers about RFS and Ethanol -Apparently Attempting to Seize Back Monopoly Market Power over the Consumer Gasoline Market
( printable copy)

July 19, 2013
By Gale Lush, Chairman

WILCOX, NEB –July 19, 2013 – “Recent attacks on the Renewable Fuel Standard (RFS) by the American Petroleum Institute (API) are misleading the United States Congress and American consumers,” said Gale Lush, Chairman of the American Corn Growers Foundation (ACGF), a corn, soybean and wheat farmer from Wilcox, Nebraska. “Considering that the fossil fuel industry has had one hundred years of various forms of government support and subsidies including tax credits through which they avoid paying federal taxes, it’s about the same as oil companies getting the equivalent of checks from the federal government and U.S. taxpayers, just in a little different form. Government support, combined with their dominance of motor fuels has amounted to a “mandate” and a captive market for their product, namely gasoline. The API’s call for the elimination of the RFS for ethanol is duplicitous at best and shows a selfish disregard for the best interests of the U.S. economy, U.S. consumers and U.S. energy security given that ethanol keeps gas prices $1.09 per gallon less at the pump than those prices otherwise would be without ethanol in the gasoline pipeline, according to a recent study by Iowa State University. It appears the petroleum industry wants to seize back monopoly market power which could result in a 100 percent oil industry monopoly “mandate” in the U.S. gasoline market if they could replace clean burning, environmentally-friendly ethanol with strictly gasoline, including all its carcinogens such as benzene.”

Lush added that the July 2013 U.S. Department of Agriculture (USDA) supply and demand report shows a near record number of acres planted to corn and near record 2013 corn production projected at about 14 billion bushels, plenty of corn for feed and fuel. Average corn prices are projected to drop by about $2.00 per bushel for the 2013/2014 marketing year.

“The API and big agribusiness livestock trade groups are trying to mislead the public and Congress with their spin that corn use for ethanol is a question of corn for fuel versus corn for food but that is disingenuous given the realities of the actual share of yellow field corn that traditionally goes to cereals and other products. According to USDA only 210 million bushels of corn is used in the category of ‘Cereals and other products’, 270 million bushels goes for ‘Glucose and dextrose’, 250 million bushels goes for ‘Starch’, and 505 million bushels goes for ‘High-fructose corn syrup (HFCS),” said Lush. “Furthermore, USDA projects that total U.S. red meat and poultry production in 2013 will be over 93 billion pounds with per capita U.S. consumption rising from 202.2 pounds in 2012 to 204.8 pounds in 2014. Obviously, there is no shortage of either corn or meat in the U.S. marketplace, so the API and those other anti-ethanol trade groups should knock off their misinformation campaign and back off their attempts at trying to get Congress to repeal the RFS.”

“Only the starch from the corn kernel goes toward producing ethanol,” said Lush. “The minerals, protein, oil, wet or dried distillers grain (DDGS) still goes right into the livestock feeding sector to produce meat for U.S. consumers while each bushel of corn simultaneously provides consumers nearly three gallons of ethanol that is blended with gasoline, keeping gasoline prices about $1.09 per gallon less at the gas pump, a major economic benefit for U.S. consumers and motorists. It appears that the petroleum industry wants to dominate government policy to have monopoly power in the gasoline market, and history shows just how much they are able to gouge consumers without fuel supply competition from ethanol.”

“For many years, as a landowner and farmer I have cooperated with the fossil fuel industry, by allowing them to use my production platform (my farmland) for multiple pipelines, so oil and gas companies can deliver their products (petroleum and natural gas) to the market,” said Lush. “Why shouldn’t I expect the petroleum industry to extend me the same courtesy and cooperation by allowing my product (corn ethanol) to be delivered through their marketing platform (gasoline outlets and stations) to American motorists and consumers? Farmers and the ethanol industry are providing a valuable, high quality product to consumers while enhancing U.S. energy security. With ethanol plants widely dispersed across the U.S. Middle West foreign wars in the Middle East and elsewhere do not jeopardize that part of our domestic fuel supply. This is not about an either or situation of corn for food or for fuel because prior to ethanol use yellow field corn was primarily used for livestock feed, not human consumption. The valuable feed corn components still are going into the livestock feeding industry that provides an abundance of food to consumers in the U.S. and around the world. It’s high time for the petroleum industry to become our American ally and marketing partner instead of our opponent.”

Latest USDA-WASDE July, 2013 U.S. Feed Grain and Corn Supply/Demand Table and USDA Feed Outlook Table 5-Corn: Food, seed, and industrial use (million bushels) June 13, 2013 both shown below.


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