Thursday, April 12, 2012

Huffington Post On Lugar-Mourdock Differences On Ethanol

The Huffington Post's Matt Sledge takes a closer look at the different stances Sen. Richard Lugar and Indiana State Treasurer Richard Mourdock staked out in last night's debate over the price impact of blending ethanol with gasoline. Lugar, a corn and soybean farmer, has always supported federal subsidies for ethanol, which Congress ended last year; however, mandatory blending rules have replaced subsidies. Mourdock, who has consistently taken the view that government should not be picking winners and losers in the market place, argued that Lugar's pro-ethanol policies have contributed to higher prices at the pump, an argument to which Lugar took strong exception. Sledge spoke to me today about the different positions Lugar and Mourdock have taken on ethanol:

"Most of us, especially as Republicans, object to mandates from the federal government," Mourdock said during the debate. "And yet suddenly we saw more ethanol being mandated into our gasoline."
The federal government gave gas refiners a subsidy to add ethanol to their product, but that policy was phased out at the start of 2012. Instead, the federal government now mandates only that the industry add some sort of alternative fuel, which often means ethanol derived from corn.
Just a few years ago, Mourdock's stance would have been heresy for a candidate in a farm state. Even though the state actually farms more acres of soybeans these days, corn has long been integral to Indiana's self-image. Gov. Mitch Daniels and both the leading Democratic and Republican candidates for governor are generally supportive of ethanol. Lugar, himself a farmer, has long taken the stance that what's good for corn is good for the state.
"It's a Hoosier product, with Hoosiers producing it on farms here," Lugar replied to Mourdock with near exasperation during the debate.
But that argument has less and less support from Republicans these days. Politicians like Rick Santorum -- who told Iowans he would end ethanol subsidies and then went on to win the state -- are finding that opposing industry subsidies is less of a liability. The industry, meanwhile, believes it is finally becoming competitive on its own terms.
Mourdock, who has been endorsed by the Tea Party Express, outlines his stance as a matter of conservative principle.
That plays well with primary voters, said Gary Welsh, a Republican lawyer in Indianapolis who blogs about state politics, and who grew up growing corn and soybean crops. "Mourdock is pretty pure on those issues, and he's consistent -- even if some people may not like that view."
Plus, Welsh added, farmers are hardly monolistic in their views on ethanol. "To the extent that you're creating a demand converting food to fuel use, you're driving up food prices too, so there's that flip-side," he said. "For livestock farmers, that means their cost of feeding livestock goes up." . . .
The Star's Mary Beth Schneider also blogged today about the ethanol industry going on the attack against Mourdock for the position he took in last night's debate on their sacred product.

The Indiana Ethanol Producers Association took umbrage. Mourdock’s comments, they said in a release, “does a disservice to the over 3,500 Hoosier jobs dependent upon the state’s growing ethanol industry and does nothing to reduce the price at the pump.”
The association argued that ethanol brings down the price of gas, calling it “simple math” as something less expensive replaces the more expensive oil.
“In fact, a recent study by the Indiana Corn Marketing Council found that ethanol resulted in savings to consumers of over $40 million in 2011,” the associated stated.
Thursday morning, a Washington-based group that represents ethanol producers, Growth Energy, also disputed Mourdock.
Tom Buis, the group’s CEO, said in a statement that: “I don’t know where Mr. Mourdock is getting his facts but he’s been fed misinformation. In fact, he’s got the facts backward. Ethanol actually keeps gas prices down at the pump instead of raising them.”
Thursday, Mourdock stood by his statements and said that among other things ethanol reduces the gas mileage, costing people more to operate their cars.
Schneider astutely picks up on the fact that Lugar has strong personal ties to the ethanol association's leader:
Of course, some would argue this may be as much about politics as it is about ethanol. The executive director of the Indiana Ethanol Producers is Anne Hathaway, a former chief of staff to the Republican National Committee who is active in the Richard Lugar Excellence in Public Service group that gets women involved in GOP politics.
She’s backing Lugar, and so is the ethanol association. In its release, the association said Mourdock’s statements reflected a “lack of knowledge” about the industry and that “Indiana deserves serious leadership.” Lugar, the release noted, is a farmer and “steadfast supporter” of the ethanol industry.


Paul K. Ogden said...

Ethanol is indefensible as an alternative energy option. Putting corn in a our fuel tank and driving up the price of food was one of the dumbest things we've ever done. And that's not even considering the huge amount of energy required to create ethanol.

The only people who still believe in ethanol are those getting wealthy off ethanol subsidies and mandates. I like that Mourdock is taking a principled position even though it might hurt him with some Hoosier farmers.

Pete Boggs said...

Is that the punchline to an economic joke, "ethanol industry?"

Cato said...

Ethanol is horrible to stick into internal combustion engines. It gives less power than gasoline, runs too lean and hot and destroys engine gaskets and seals.

If you care about your car/motorcycle/waverunner, and you're willing to drive a little, find a gas station on this list, and get the good stuff. Your engine will run so much more smoothly and powerfully.

Unknown said...

Dick Lugar's debate performance sent a clear message to Hoosiers.

Here's what I heard:

After 36 years in the US Senate, Dick Lugar has helped to divert 40% of Indiana's corn crop into the heavily subsidized ethanol market, while doing nothing to reduce our dependency on Arab oil. We are still as dependent on Arab oil as we were in when Lugar took office in 1976. Dick Lugar still thinks we'll be impressed by his bragging about managing the Lugar family farm and his daily watching of the corn prices.

The creation of false markets (that is, creating tax-subsidized products and then forcing industries and consumers to buy them) is a game Democrat Joe Donnelly also loves to play with voters.

After 36 years in the US Senate, Dick Lugar, the crown jewel of the Senate Foreign Relations Committee, still talks Cold War Era style diplomacy as our best missile defense. Dick Lugar still thinks the remedy is "containment" and "non-proliferation", all of which amount to the old Mutual Assured Destruction (MAD) stand off defense.

The big thing Lugar let slip was that "On the Korean business . . . there is no stopping, for the moment, the Korean [missile] shot except for a missile control, which will we hope we can exercise in Japan on the way out."

Fact: A ballistic missile will reach the US in 33 minutes or less. Ronald Reagan urged us to create a ballistic missile defense, yet Dick Lugar has not embraced it and still our people are unprotected.

What I heard tells me that it's time for Dick Lugar to step down.
It's time for Richard Mourdock for US Senate.