The original corn laws put tariffs on imported grain in an effort to help domestic producers. That was nearly two centuries ago, in England, and the experiment is taught as an example of bad economic policy. But people never learn and in this country, today, we have the renewable fuel mandates which have been a boon to corn farmers in Iowa (among other states) where presidential candidates are obliged to speak in favor of a policy that is a drag just about everywhere else in the country. The ill effects include higher gas prices, poor engine performance in automobiles, and damage to smaller engines found in chain saws, leaf blowers, and lawn mowers.
In a report published Thursday, Harvard University professor Jim Stock, who served on President Barack Obama’s Council of Economic Advisers in 2013 and 2014, proposes several reforms to the biofuels mandate, known as the renewable fuel standard, including some requiring congressional approval.
Just as policy, how bad is the current scheme?
Under the law, which was expanded in 2007, the standards require refineries to blend an increasingly large amount of biofuels into gasoline to reach 36 billion gallons of renewable fuels by 2022. No more than 15 billion gallons of that total can come from corn, which today is within one billion gallons of that limit.
The additional 21 billion gallons by 2022 are supposed to come from advanced biofuels made from non-corn products, but that sector is falling far short of producing what Congress had envisioned. The industry produced 1.9 billion gallons of fuel in 2014, with 1.7 billion gallons coming from biodiesel and 180 million gallons from other alternative fuels—far less than the 3.75 billion gallons the 2007 law had initially required for the year.
The EPA is almost two years behind issuing the requirements for 2014 and at least six months late with the 2015 requirements, partly a recognition that the biofuels market has not performed as the law assumed. Bound by a legal agreement announced last week, the agency is planning to propose the levels for 2014-2016 by June 1.
Iowa took umbrage, last week, over something an operative for Scott Walker said. Or, to be precise, something she once tweeted. For her indiscretion, Liz Mair was forced to resign from Walker’s political action committee. Walker is not yet an officially declared candidate for president but that is just political coyness.
Rivers have rights, they say down in Mora County, New Mexico—“inalienable and fundamental rights,” beyond the power of any government to touch. Aquifers, too. Wetlands, streams, ecosystems, and even “natural communities,” whatever that undefined term means: All of them have rights to “exist and flourish.” The land itself has an “intrinsic right” to “exist without defilement.”
We’re hearing from all over just how good things are – and are becoming ever more so – and how on top of the game the president is. There is that 5 percent GDP growth last quarter and an unemployment rate that has dropped below 6 percent (the bar has, obviously, been lowered) and the stock market is burning it up.
An estimated 90 million of us will drive 50 miles or more during this holiday season, and recent years’ gnashings of teeth at the pump are being replaced with smiles. The price of gasoline is down 36 percent since April, to a national average of around $2.40 per gallon, with some cities reporting prices of below $2.
Anyone who doubts that the deployment of the technologies we have come to call fracking constitutes a revolution should consider this. U.S. oil production has soared by 70 percent in the past six years. American refineries have cut in half their imports from the OPEC cartel, setting off a scramble by those countries to find new markets.
Representative Peter Welch (Democrat, Vermont and, by the way, my representative) has announced that he is in favor of raising the tax on gasoline. He has a safe seat and, anyway, in Vermont it isn’t politically dangerous to propose a tax increase, especially if it can be somehow made into a positive for jobs and infrastructure and a negative for automobiles and oil companies. Vermont is eagerly anticipating the arrival of cars that are powered by wind.