Washington’s New Era

By Bob Dinneen | August 15, 2011

The recent partisan battle over raising the amount of money the federal government is allowed to borrow to pay its bills is merely a symptom of a larger metamorphosis on Capitol Hill.  As we have seen with every spending measure put before either chamber of Congress, the age of Washington austerity is here.

The implications of this new-found fiscal discipline, or at least façade of fiscal discipline, will present challenges for every industry in the nation, including existing and emerging renewable fuel technologies.  We have already seen the appetite to do away with federal investment in ethanol peak, despite thoughtful ideas and policies put forward by ethanol’s champions on the Hill and the industry itself.  But the mischief that lawmakers are hiding behind a veil of budget concern extends far beyond the tax credit for ethanol blending.

Using the appropriations process, lawmakers from the oil patch and elsewhere are seeking to use the federal government purse strings to reverse, overturn, or stall critical advances in America’s ethanol industry.  Take, for example, the U.S. EPA and Department of the Interior annual appropriations bill.  No fewer than four amendments to that bill sought to prevent funding for EPA-related activities that would fully implement the approval of E15 ethanol blends and enforce the 2012 renewable fuel standard requirements.  This bill has already drawn a veto threat from the White House and is a nonstarter, but the efforts to systematically dismantle American renewable fuel production are just beginning.

As more appropriations bills are considered, such as the one funding the USDA, some lawmakers will again seek to legislate as they appropriate, having failed to thwart American ethanol production through normal legislative and regulatory channels.

The Achilles heel for these lawmakers is often the hypocritical nature of their “budget focus.”  While they routinely bemoan federal investment in ethanol, however paltry the amount, they will refuse to address subsidies elsewhere in the energy sector.  As we saw last quarter, America’s major oil companies are making tens of billions of dollars in profit while American taxpayers continue to provide them with support.  One analysis from DTN/Progressive Farmer estimates that the petroleum industry is eligible for some $17 billion in subsidies each year. 

In order to fight back these efforts to halt America’s march toward energy independence, all of America’s renewable energy community must do three things.  First, we must recognize that the enemy is not each other.  Rather, we share a common foil in the fossil fuel industries that have monopolized our economy and energy future for too long.  Second, we must continue to point out the hypocrisy of continued support for oil and coal while investment in promising new renewable technologies is slashed or abandoned.  Third, we must look for opportunities to work together and think outside the box.  I believe that the ethanol tax policy reforms put forward by Sens. Amy Klobuchar, John Thune and Chuck Grassley, among others, are an example of the kind of new energy policy paradigm that Washington and the nation need to adopt.

This column is not meant to unduly alarm.  To the contrary, it is meant to excite the renewable fuels community to action and spur ongoing efforts to find new solutions and areas of commonality.

This new era in Washington may very well usher in a new era for American ethanol and renewable energy production.  It will only be as promising as we make it.   

Author: Bob Dinneen
President and CEO of the
Renewable Fuels Association
(202) 289-3835