Ethanol bill plowing through Legislature

02/09/2005

Dane Smith, Star Tribune
February 9, 2005

Like a combine sweeping through a cornfield, legislation to double the ethanol content of gasoline at Minnesota pumps is mowing down all before it in the Legislature.

Despite opposition by normally potent interest groups, the House Agriculture and Rural Development Committee unanimously passed a bill Tuesday, a top priority of Republican Gov. Tim Pawlenty, that would double the required ethanol in gasoline to 20 percent by 2012. The House bill was almost identical to one that sailed through the DFL-controlled Senate on Monday.

Meanwhile, U.S. Rep. Collin Peterson, a Democrat who represents the farm country of northwestern Minnesota, pledged at the State Capitol to take the battle to Washington, and to wage an all-out effort to persuade the federal government to allow the requirements to take effect.

The proposal appears to be more popular than ever in Minnesota, where corn, the primary ethanol source, is king among the farm commodities. The state also has its own direct subsidy program and pays 13 cents per gallon to qualified ethanol producers.

The bill’s “a win-win-win for everybody,” said Sen. Jim Vickerman, DFL-Tracy, who along with other advocates claims a manyfold benefit including more demand for corn and higher income for farmers, higher outstate employment from processing plants, and cleaner vehicle emissions.

Critics call the legislation wasteful government spending and needless intervention with the free market. Foes include oil companies, refineries, and car dealers who argue that ethanol cuts gas mileage and may damage some engines.

But in Minnesota, at least, these critics also are beginning to admit that pro-ethanol bills are becoming unstoppable.

“The whole thing is greased like a pig and it’s going to slip through,” said C. Ford Runge, a long-time critic of ethanol subsidies and a McKnight professor of Applied Economics and Law at the University of Minnesota. Although sold as a benefit to ordinary farmers, the legislation’s main beneficiary will be international grain companies such as Cargill and Archer Daniels Midland, Runge said. He added: “The entrenched interests have gained experience with the political process.”

Nonsense, said Rep. Gregory Davids, R-Preston.

“Back in the 1980s, passing bills to help ethanol was brutal, tough. What’s happened is that this is a great success story, a spectacular Minnesota success story,” Davids said. “Ag chairs [legislative committee leaders] all around the country are wondering how to play catch-up with us. This is spreading, because we’re adding our own value to ag procucts right here.”

While not disputing Runge’s point that large agribusiness may be benefiting, Davids noted that, “A lot of these processing plants are owned by farmer cooperatives.”

Advocates say they are winning the battle against some of the persistent criticisms of ethanol, especially those having to do with efficiency standards and ethanol’s compatibility with most of today’s engines.

Advocates say a consensus is emerging that ethanol’s effect on reducing mileage is very slight, and worth the gains in cleaner air. Criticisms that ethanol costs as much or more to produce as it provides in energy also are gradually disappearing, they argue, because of rapid advances in processing technology.

Nevertheless, opponents aren’t quite ready to surrender, despite predictions that the ethanol bill might be on Pawlenty’s desk for signature within a month or so.

The Taxpayers League of Minnesota, a powerful interest group that opposes government intervention in general, declared the ethanol bill this week to be a “bad deal for consumers ... and a triumph of hope over reality.”