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By Staff | Dec 6, 2013

Ethanol leaders met in Nevada last week at Lincolnway Energy to start to rally the ethanol industry, state and farmers to push back against the EPA’s proposed destruction of the RFS.

It was more political than I expected with Gov. Terry Branstad, Sen. Chuck Grassley and Rep. Steve King rounding out an all-GOP cast of elected officials.

“If you like your insurance you can keep your insurance” wasn’t the only lie that President Obama told recently. He also promised to support biofuels and the RFS.

Make no mistake, the EPA action using made-up authority to reduce instead of advance the RFS volumetric requirements, cuts the heart out of it. The cellulosic industry is done when it was just started because there is no market access when EPA stands behind creating a blend wall instead of tearing it down which is what the RFS legislation intended.

No one will invest more in cellulosic ethanol under these circumstances. We haven’t had a president that told the whole truth in some time, but we elected the current one based on the premise of change, so it is even more disappointing to learn that nothing has. He lied to us too.

Branstad said that EPA administrator, Gina McCarthy, told him in August that the volumetric ethanol RFS would be maintained and then the EPA came with this different proposal from what was promised before. She lied to our governor.

I don’t blame Iowa Republicans for jumping on this one bit. Iowa Democrats support ethanol too, but they will pay a political price for the sins of Obama’s EPA in Washington anyway.

Democrats were benefiting politically from being perceived as the pro-ethanol-biodiesel political party and now they are not. Obama touted his support specifically for biodiesel in major speeches, and they nailed that to capping the market for biodiesel at present levels instead of expanding it as written in the law.

GOP leadership in Washington was anti-ethanol working in Congress for the petroleum interests that were giving them generous campaign donations to legislatively repeal the RFS.

Obama’s EPA essentially did that for them by accepting the myth of a blend wall. The RFS did not say we would use 36 billion gallons of ethanol, or E-10, whichever comes first.

It said that fuel retailers were to give consumer’s access to E-15, E-30 and E-85 and now because of what is proposed by EPA, they don’t have to.

Branstad said that he will hold future presidential candidates accountable for their ethanol views when campaigning in Iowa for the caucuses next time.

I was critical of him for not having done that the last time around. He invited Texas governor Rick Perry into the state with a handshake and a smile despite his very strong anti-ethanol Big Oil, Big Cattle perspective.

It didn’t take Perry long to prove to voters what a nincompoop he was, so his campaign flamed out, but Branstad should have been the first to throw water on him. We hear tell that Perry may try again, and Branstad should make it known that he is not welcome in Iowa.

Branstad said that ethanol did not play a big role in the last election because of the high price of corn, and with corn now at breakeven, that will change the political landscape going forward.

Ethanol opponents want cheaper corn still, along with the destruction of the basis to Chicago corn prices, which has changed to benefit corn producers immensely because of the ethanol industry.

What this illogical EPA mandate did was lay the blame for a deteriorating farm economy on Obama and the Democrats. It was going to turn down anyway, but now they will get the credit for it. Talk about stupid.

The disastrous rollout of Obamacare was not the only really incompetent thing the administration accomplished recently. If I were a Democrat I would be furious with the administration, wanting to clean out the White House bumbling staff that is now taking down what would otherwise have been decent electoral prospects.

Now they are their own worst enemy.

The Democrats in Washington obviously did not have a clue what the political ramifications of this extreme renunciation of the RFS are going to have on them in Corn Belt states.

They can send out U.S. Secretary of Agriculture Tom Vilsack to put lipstick on their sow telling us how pro-biofuel the administration really is, and there ain’t anybody going to listen to him.

Vilsack has been the best advocate for biofuel that we have ever had, but obviously noone listened to him in the administration either.

They would just be making a liar out of him, too.

We have now added Obama to the long list of “nothing has changed” tradition of presidents lying to us.

David Kruse is president of CommStock Investments Inc., author and producer of The CommStock Report, an ag commentary and market analysis available daily by radio and by subscription on DTN/FarmDayta and the Internet.

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