The Anti-Ethanol Crusades: The GMA campaign, the 11th Crusade 2008-200?
The GMA anti-ethanol campaign, with the intended consequence of increasing the taxes on clean burning domestically produced fuels, sadly lacks the context and perspective that somehow their concern about increasing the price of food $15 per year outweighs the benefits of biofuels and trumps the importance of our national effort to reduce greenhouse gases, lower the carcinogens in gasoline, improve the safety of U.S. soldiers fighting in the world’s largest oil region, lower crude oil and gasoline prices, reduce our addition to foreign oil, and protect the jobs of the people that shop at their stores. Their propaganda also lacks the convenient truth of comparing ethanol to oil and statistics showing grocery store chains are fast becoming the newest and largest retail outlets for the gasoline supplies of major U.S. refiners and importers. Anti-ethanol crusades have been absent accountability, responsibility, and morality -- and this one is no different.
For thirty years I have witnessed many anti-ethanol crusades parading outdated and misguided research to the media to squelch America’s entrepreneurial spirit and dampen the Congressional will to protect its citizens. These anti-ethanol campaigns have been waged with the intended consequence of driving fear and doubt into the hearts of consumers that may want to consider alternatives to the now ½ trillion dollar U.S. gasoline market.
According to my memory, the Grocery Manufactures Association attack on ethanol is the 11th crusade in a series of sadly similar campaigns to stop the development of alternative fuels and keep America in the very dark ages of fossil fuels. In spite of the overwhelming bipartisan support for the U.S biofuels fuels program and the onslaught of industry and government research countering the propaganda generated by the GMA crusade – their band plays on. If you are not familiar with the GMA same-old-song crusade, you can view their request for proposal to start their anti-ethanol campaign, and the public relations company response outlining the tactics, targets and the intended consequences on the website of Senator Charles Grassley (June 5, 2008 – Senator Grassley questions participation of national organizations in ethanol smear campaign) or the Capitol Hill newspaper Roll Call which first outed the campaign (partial story below).
Excerpts from “Beating Up on Ethanol, Glover Park Helps Frame the Debate” -- By Anna Palmer, Roll Call Staff, May 14, 2008.
GMA has been leading an "aggressive" public relations campaign for the past two months in an effort to roll back ethanol mandates that passed in last year's energy bill. The association hired Glover Park Group to run a six-month campaign, according to GMA's request for proposal and Glover Park's response. "GMA has concluded that rising food prices ... create a window to change perceptions about the benefits of bio-fuels and the mandate," reads the three-page RFP, a copy of which was obtained by Roll Call.
GMA, which believes the current ethanol policy has caused a major rise in food prices, sent out the RFP in early March looking for a public relations shop to "build a groundswell in support of freezing or reversing some provisions of the 2007 Energy Bill and for the elimination/reform of ethanol subsidies and import restrictions." The energy bill, which passed in December, includes a renewable fuel standard that mandates 36 billion gallons of ethanol be produced yearly by 2022, up from about 7 billion gallons last year.
In its RFP, the GMA outlined a four-part approach: building "a global center-left coalition," which includes environmental, hunger, food aid, poverty, development, senior, children, business, nutrition, farm consumer and labor groups; taking advantage of the "extraordinary earned media opportunities" caused by rising food prices; mobilizing local food banks and "other local opinion leaders in key states and districts"; and hiring "trusted third-party experts" to document the effect of fuel mandates on, among other things, global hunger and poverty, job losses in the food industry, and inflation.
In its 21-page answer, a copy of which was also obtained by Roll Call, Glover Park laid out a hard-hitting plan with two main goals for the campaign. "First, we must obliterate whatever intellectual justification might still exist for corn-based ethanol among policy elites. ... Second, we must demonstrate to policy makers at the state and federal level that there is a political price to allowing ethanol policy to drive up the cost of food," Glover Park wrote.
Meanwhile… USDA and DOE recently testified before Congress that ethanol policies account for 3% of the 45% increase in food prices. Merrill Lynch estimates corn price increases from the U.S. biofuels program cost the consumer $15 per year and on the other side of the family ledger saves them over $500 in their cost of buying gasoline.
What’s fair? What’s important? Most people have their conspiracy theories about oil interests trying to squash the development of alternative fuels. While it is a tantalizing tale, it more likely a simple public relations and propaganda tactic to protect market share that is taught in most business schools. However, if this were simply a battle of Coke vs. Pepsi or sugar vs. artificial sweeteners it would be ok. It is not the same and it is not OK.
After Persian Gulf War I the nation should have drawn a line in the sand declaring the moral equivalent of morality – which is the right for our county to pursue alternatives to gasoline to avoid the paying consequence of our oil addition and having no competing products to gasoline. September 11, 2001 was the volley back across that morality line in the sand. Persian Gulf War II was our volley across that line again -- and the price of oil has gone up nearly everyday since. Paying the strategic cost of oil addiction in terms of national security, including the “ultimate price” our war fighters pay, should out this charade of an argument to it's real baseline -- a debate over self importance, more profits, and market share.
All companies deserve to have the right to fight for market share -- as long as they are the ones fighting for it. If oil companies had to deploy troops to keep the oil shipping lanes open, we would all be making cellulosic-ethanol in our backyards and selling it on the street corner to be employed. What would make this anti-ethanol propaganda campaign fair? If any of the major oil companies had made one gallon of alternative fuels since the first Arab Oil embargo of 1973.
The brief history below is my personal account of the 10 anti-ethanol crusades leading up to the current GMA campaign.
- Henry Ford designed some of his first cars to run on any combination of ethanol or gasoline, much like the seven million Flexible Fuel Vehicles (FFVs) on the road again today. He lost the first anti-ethanol crusade to Rockefeller family. The same Rockefeller family that is fighting today to get ExxonMobil to invest more into alternative fuels.
- Oil companies fought to keep the lead in gasoline for 90 years despite the overwhelming evidence of the detrimental health effects on people, especially children. In the late 1970’s, they claimed it would increase the cost of gasoline by $1 a gallon and "their customers" would not stand for it. Unleaded gasoline wound up costing “their customers” a nickel. Hardly worth the battle considering the ultimate price.
- When working for an ethanol marketer in 1980 I personally discovered many letters sent from major oil company gasoline suppliers to independent marketers threatening to cut off supplies if they put gasohol in their pumps, sold it in their station, and/or accepted payment with “their customers” credit cards. That anti-ethanol campaign led to the original Gasohol Competition Act of 1980.
- During the 1980’s I helped with a Congressional investigation by the Federal Trade Commission and Senator Tom Daschle regarding unfair trade practices by oil companies used to thwart ethanol sales. During that anti-ethanol crusade oil companies were giving their dealers "no alcohol in my gasoline" signs – after spending about a year to get states to pass labeling laws for ethanol pumps.
- In the late 1980's I worked on a law suit filed by a few small ethanol producers against Shell Oil and a few others major oil companies about unfair trade practices. During that anti-ethanol campaign the court, through its discovery process, uncovered about 1,200 documents showing oil companies were working against the development of ethanol.
- After the lead came out and the no alcohol signs came down, the oil companies fought against new fuel standards that would require the use of oxygenates (ethanol) in gasoline to reduce carbon monoxide and ozone during the Clean Air Act Amendments of 1990. Then again during the mid 1990s during the introduction of reformulated gasoline which reduced toxics and carcinogens in gasoline. In each case oil interests reported to Congress that it would raise the cost of gasoline $1 a gallon and "their customers” would not stand for it. According to press accounts during that period oil companies spent millions on those campaigns and cleaner gasoline wound up costing “their customers” a nickel. Hardly worth the price, considering the cost.
- In the 1990s, much to the chagrin of many oil interests, a new concept was developed to continue the clean up of gasoline -- a renewable oxygen standard (which would have avoided MTBE). During this anti-ethanol campaign oil interests fought against that concept, which would wind up being the renewable fuel standard (RFS) that was included in the Energy Policy Act of 2005.
- After a brief calming period where ethanol was helping oil companies replace MTBE, they renewed their anti-ethanol crusade to stop the expansion of the RFS in the Energy Independence and Security Act of 2007. Once again, oil company interests said adding ethanol to gasoline would raise the cost of gasoline $1 a gallon and "their customers" would not stand for it. Instead, Merrill Lynch found that ethanol supplies lowered the price of gasoline and oil 15% -- while they were making an extra $1 per gallon on the ethanol and not passing it along to “their customers.”
- The introduction of E85 (85% ethanol and 15% gasoline) for the seven million FFVs on the road was not any easier. During this campaign alternative fuel advocates had to improve and enhance provisions in the Gasoline Competition Act in the Energy Independence and Security Act of 2007 to protect franchisees from their suppliers. The Business Week article “The Big Stall on Ethanol” shows how even the automakers got fed up with that anti-ethanol campaign.
- During the past 30 years I have observed the too-many-to-count “increase the tax on domestically produced cleaner burning fuels” anti-ethanol crusades. Since Congress and the President established a lower tax on ethanol in 1978, oil interests have tried to repeatedly to raise the taxes on ethanol and "their customers." While the ethanol incentive makes it possible to sell ethanol lower than the price of gasoline, it is rarely passed on to “their customer.” The tax incentive that lowers the price of ethanol to consumers has been under attack since it inception in 1978. And even today, the Governor of Texas is leading a charge to ask EPA to repeal the renewable fuel standard -- which has been proven to reduce the price of gasoline and oil by 15%.
As a result of all of these campaigns, ethanol has been the most scrutinized product on the planet. It has withstood the test of time and is still the only commercially viable alternative to more imported oil, and the monopoly gasoline has on the transportation fuel market. The next time you read or hear one of those anti-ethanol attacks ask yourself -- Where are the fuel cells, the hydrogen refueling stations, the methanol and electric cars, compressed natural gas cars, and the vast amounts of new oil supplies that can be found and produced at “fair prices” in free market? Who is working in my best interest? Do we really need competition in the fuel market?
After 30 years of anti-ethanol crusades, which were always matched with warnings by many analysts in the oil industry and other sectors, major oil companies have not produced one gallon of alternative transportation fuel or do they have any commercially ready technology to stop the affect the gasoline-monopoly has on the nation’s economy and every consumer.
This lack of progress, in the face of fighting to stop the development of alternatives, has cost "their consumer" a lot more than $1 per gallon. Some oil interests say publicly that's OK, and there is nothing to be done about the $40 billion profit. That is a sad story. A story nearly as sad as the original Crusades. My apologies if I offended anyone with my analogy. This was not an attempt offend any of those already hurt by historic misinformation campaigns with malicious intent. This is my attempt to bring some serious context and perspective to a harmful campaign that has gone way too far to protect a special interest at the cost of our national interest. The result of those failed crusades? "Their customer" now has a choice to buy an FFV that can run on 85% domestically produced renewable fuels. Proving once and for all, truth is stranger, and stronger, than fiction.
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