Ethanol Policy and the Economy

Paul Kenney

 

Editorial Submission by Paul Kenney

Recent reports from the University of Nebraska clearly document the impressive economic benefits that occur when the corn, cattle and ethanol industries are efficiently integrated. Economists describe the economic “bounce” we realize in the economy when value is added as grain is converted to food, fuel, fiber and bio-products.

As a long-time resident of the second largest ethanol producing state, I’ve seen how the ethanol sector and related agri-industries have created a positive impact on our economy and many Nebraska families. Having grown up on a farm and spent much of my life working in the agricultural sector, I see first-hand the enormous potential of biofuels to strengthen the economic health of Nebraska. But we should not take this recent era of agricultural prosperity for granted. The recent decline in grain prices is a stark reminder of that fact.

The highly subsidized oil industry is mounting an unprecedented assault on biofuels generally and ethanol specifically. As a person with deep agricultural roots, I take this assault personally. The constant attacks by Big Oil on ethanol and other biofuels are an attack on our way of life and our goal of maintaining a sound economy. Oil refiners continue to report record profits at a time when we face volatile oil prices. Ethanol plays a key role in keeping gasoline prices lower thereby saving Nebraska consumers more than $70 million last year. Ethanol also helps reduce the toxicity of gasoline and lowers carbon monoxide levels by up to 30 percent compared to gasoline. But make no mistake: Big Oil is not a fan of ethanol.

Economic, public health and environmental benefits of ethanol and other biofuels are well established. But we can do more provided that Nebraska’s policy makers take a strong leadership role in shaping public policy. Nebraska’s political leaders at the local, state and national level have a proud legacy of championing agricultural and ethanol policy. There is an opportunity for Nebraska’s leaders to take a proactive role today. Many of the largest ethanol-producing states have adopted state biofuel initiatives that encourage not only the production, but the use of ethanol and other biofuels. Those state programs support ethanol infrastructure development while providing access to E15, E30, E85 and other fuel choices. As a result, consumers have more choices at the pump, lower fuel costs, a pro-ethanol marketplace and the opportunity to patronize the products they produce from agricultural resources. Nebraska’s policymakers must actively and vocally show support for the federal Renewable Fuel Standard and push back against regulatory actions that impede the use of ethanol and other biofuels. The current Renewable Fuel Standard is the only mechanism today that provides a framework for agricultural prosperity while weaning our economy off high-priced fossil fuels.

We are at a pivotal point in agriculture today. We can continue to have a prosperous future if we have strong political leadership that advocates for agriculture and biofuels. Or we can repeat the mistakes of the past and Big Oil will gain even tighter control of our economy and our future.

Paul Kenney grew up on a family farm near Amherst. He spends most of his time engaged in grain and cattle production and ethanol advocacy.


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