The ethanol lobby wins

Read today's editorial on ethanol in the Wall Street Journal. Here's the heart of it:

the EPA lifted the cap on how much ethanol is allowed to be mixed into gasoline to meet the annual consumption mandates in the 2007 energy bill, which will rise to 36 billion gallons by 2022. Until last week, this per-gallon “blend wall” stood at 10%, because ethanol is highly corrosive and can damage engines and exhaust systems and impair other features. The practical problem with this industrial planning is that Americans don't use enough gas to meet the mandates.

So the EPA decided that more ethanol should be mixed with less gas, lifting the cap to 15% for model years 2007 and later, or about one out of seven cars and light trucks currently on the road. The decision came in the nick of time for the ethanol industry, which is at market saturation and producing a glut that the government is not requiring anyone to buy. “We have lots of gallons of ethanol chasing too few gallons of gasoline,” Renewable Fuels Association president Bob Dinneen told the New York Times in May.

In this context, it's worth recalling the size and reach of the ethanol lobby, about which I wrote earlier this year:

For instance, there's Growth Energy, a new ethanol lobby group co-chaired by former Democratic presidential candidate and Obama donor Wesley Clark. The company's chief executive officer is lobbyist Tom Buis, formerly the top agricultural policy aide to Obama confidant Tom Daschle.

 

Former Rep. Jim Nussle, R-Iowa, sits on Growth Energy's board, while his former chief of staff, Christopher Bliley — also a former associate administrator at the EPA — lobbies for the group. Growth Energy's top K Street asset, however, is Kountoupes Consulting.

 

The firm's three Democratic lobbyists have already given a combined $64,000 to Democrats this cycle, while Republican lobbyist Julie Hershey Carr has given more than $11,000 to GOP candidates and committees since the 2008 election.

 

Across the ethanol industry, lobbying is picking up. The BlueFire Ethanol corporation last month hired K Street's Bracewell and Giuliani, including lobbyist Edward Krenik, an associate EPA administrator under Bush and a former hill staffer for Sen. David Durenberger, R-Minn., a close ally of the original ethanol giant, Archer Daniels Midland.

Then ask yourself if you're confident the administration made this decision based on science, or on politics.

Beltway ConfidentialUS

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