Big Ag's Losing Fight on Ethanol

Des Moines Register:

With billions of dollars of potential profit on the line, ethanol producers, corn growers and other groups know they have a tough road ahead and a limited window in which to change the thinking of the EPA and White House officials overseeing the mandate, known as the Renewable Fuel Standard. The law requires refiners to buy alternative fuels made from corn, soybeans and other products. The EPA proposal will be open to a 60-day comment period; the agency is expected to finalize the rule in the spring of 2014.
Biofuel producers have wasted little time trying to get their message through to the Obama administration. On Wednesday, just five days after the measure was made public, representatives of Growth Energy, the Renewable Fuels Association, ethanol maker Poet, the National Corn Growers Association and others met with Secretary of Agriculture Tom Vilsack, White House staff and EPA officials. The industry representatives underscored the damaging impact the proposal would have on the future of biofuels.
Vilsack said administration officials told the biofuels industry they remain committed to the renewable fuels requirement and “understand the importance of it” for offering consumer choice, creating jobs, reducing the country’s dependence on foreign energy and saving motorists money at the pump. The former Iowa governor said more needs to be done to expand consumer access to higher-grade ethanol blends such as E85, which includes 85 percent of the corn-based fuel.
Critics of the EPA proposal contend they must act to prevent a permanent shift in the way blend levels are determined. In the past, the EPA largely followed the annual level requirements put in place by Congress, helping to drive new markets and spur demand for the renewable fuel. The proposed reduction — a move even some in the oil industry have called substantive — would shift the process to one that sets the requirements based on expected market demand.

The ethanol mandate was bad policy growing out of diminishing conventional oil production and high gasoline prices.  The skew it has made in commodity prices fueled a farm land price bubble and has wreaked havoc in livestock production.  With shale oil production spiking, fuel economy improving and miles driven per licensed driver falling, Big Ag has run into a more powerful foe, Big Oil.  If I'm a betting man (and I am), I'd wager on Big Oil.