Agriculture, Energy, and the Future of Rural America
ABN Radio’s own Gary Jackson spent last week in Washington DC with members of the Ohio Farmer’s Union, covering their annual Fall Legislative Fly-In. Along with discussions of the 2008 Farm Bill, International Trade Issues, and Country of Origin Labeling, one of the hottest topics for both the farmers and the legislators was energy policy.
Today is the last day of the Farm Science Review, hosted by The Ohio State University at the Molly Caren Agricultural Center in London. Among the displays of the latest farm equipment and technology, the field demonstrations and test plots, and workshops from Extension experts is a clear undercurrent of interest in the role rural America will play in securing our nation’s energy independence.
These two far-flung localities and events illustrated for me – as if my daily conversations with our listeners and colleagues didn’t – how critical the search for energy solutions really is to these United States. Starting with the policy issues, Washington has clearly been embroiled in a heavy debate on energy. First and foremost, and certainly the most obviously controversial is the notion of exploring and exploiting our own domestic petroleum resources. Ohio Congressmen John Boehner, Jim Jordan, and Bob Latta spent several days last month in Colorado and Alaska learning more about our untapped resources in terms of shale oil and the Arctic National Wildlife Refuge. Then during the lengthy August recess, Minority Leader Boehner instigated and coordinated a month-long debate on the floor of the House of Representatives highlighting his party’s “All of the Above” strategy on dealing with the skyrocketing cost of energy. The problem, of course, was that the Congress was in recess and the majority party wasn’t participating in the discussion.
For several years, renewable fuels have played a prominent role in a comprehensive energy strategy. Two different energy bills have been passed in the last four years, focusing on implementing a Renewable Fuels Standard mandating the percentage of renewable fuels to be blended in our fuel supply. Republicans, including Ohio’s own Senator George Voinovich, were significant in their leadership of this effort. These legislators have been recognized consistently by groups ranging from the American Farm Bureau Federation to the National Corn Growers Association for their efforts to utilize agriculture’s ability to produce a safe, renewable fuel supply while boosting the agricultural economy, and thereby the prospects of rural America in general.
Imagine, then, the surprise of these same organizations and their farmer-leaders when during last month’s Republican National Convention, the adopted platform of the Party took a hard line calling for the end of biofuels mandates in federal energy legislation. Rumors, almost dismissed because of their implausibility, began circulating that the RNC was in the process of an about-face on renewable fuels. Fred Yoder, a farmer from Plain City who served as President of both the Ohio and National Corn Growers Association, emailed me during the Convention to ask if I’d seen anything on the story. After pulling together some quick research, we determined that indeed, the rumors were true. Yoder, well known in agricultural policy circles nationally, quickly dispatched an open letter to the Party and its Presidential Nominee, Senator John McCain of Arizona, pointing out that the Energy Security Act of 2005 and the Energy Act of 2007 encouraged “not only biofuels made from corn, but also those made from other sources such as wood chips, corn stover, and switch grass. [The bills] also include incentives to further develop the wind and solar energy industries.”
Yoder reminded the Party and the McCain camp that this sudden change of heart was a real slap in the face of rural voters of any stripe, pointing out that “during the 2004 Republican convention, there was strong support for building and using alternative fuels to help us be less reliant on foreign oil…Without the current use of 8 billion gallons of ethanol to stretch gasoline supplies, Merrill Lynch has estimated gasoline at the pump would be at least 15% higher, or roughly 40 to 60 cents a gallon.” To further illustrate his point, Yoder posed a very simple question. “What incentives will there be to sink enormous sums of money into research to develop these new fuels if there is no ready market for them? Remember, we currently rely on our friends [in the oil industry] to blend and market our home-grown ethanol because they have to. In essence, by taking away the RFS, there will be a national mandate to use only gasoline. How does that help in reducing our reliance on imported oil?”
Yoder is exactly right. Senator McCain long ago ceded the state of Iowa to his Democratic foes, forgoing the Hawkeye Cauci because of his staunch position in opposition to ethanol. The GOP Platform committee clearly bowed to the nominee’s stance on this issue during their deliberations. While fiscal conservatives should be expected to pose the question as to when a subsidy or government incentive is no longer necessary in the market place, it is clear that the rewards of encouraging continued development of biofuels far exceed the costs of current government subsidization. The market is on the verge of moving from a policy-push to a demand-pull orientation, but as Yoder points out, without the government mandate, the petroleum industry will not blend ethanol into unleaded gasoline of its own accord. It is in the oil companies’ best interest to sell more petroleum, which is not necessarily in the best interest of the rest of the country.
Rural America is experiencing a Rural Renaissance, thanks in large part to the renewable fuels boom of recent years. Ohio is on the cusp of taking part in this industry in a big way, with POET Biorefining expected to open the second of their three plants at months end, and at least three other firms already operating in the state at this point. With the continued advancement of the ethanol, biodiesel, and wind power industries in Ohio, the Buckeye State is well poised to make a significant impact on the quest of becoming energy independent.
Hopefully Congressmen Boehner, Jordan, and Latta will listen to men like Fred Yoder, and continue to pursue a truly comprehensive energy strategy. As long as our policy-makers don’t abandon biofuels too soon, we all stand to benefit… and not just at the pump.
You can read the Logan County River Current online. This week’s column appeared on A4 & A5.