The big news this week: the release of President Obama’s new climate change plan.
Overzealous tree huggers are dancing in the streets, and those who choose to trivialize the scientific consensus on climate change are re-loading their rhetoric.
Neither side wins, mind you. Nope, the only winners here are those special interests who pimp their favorite politicians and the media gatekeepers who can milk this nonsense for some serious ad revenue.
As for me, if you’re a regular reader of these pages, you know I tend to side with the IPCC on its analysis of climate change data. You also know that while I take this position, I also hold firm that the solution to mitigating the effects of climate change cannot be found through government bullies with their frivolous mandates and additional taxes on already overburdened taxpayers.
I’m a free market guy all the way, and I truly believe that climate change, as well as many of our other environmental burdens, are best addressed by an honest free market where competition is the catalyst for change... not government interference. After all, the latter almost always results in exacerbating a problem instead of rectifying it.
Beyond the Fleecing of Taxpayers
Last week, the Environmental Working Group released a report entitled, “Ethanol’s Broken Promise.” It’s a must-read for every taxpayer who’s being forced to subsidize an industry that is not only an economic burden, but an environmental one as well.
The release of this report coincides with an upcoming EPA hearing scheduled to discuss reducing the amount of corn ethanol to be blended into gasoline — as per the requirements of the Renewable Fuel Standard mandate, which requires 36 billion gallons of renewable fuels (mostly corn-based ethanol) to be blended into transportation fuels by 2022.
The Renewable Fuel Standard began with the Energy Policy Act of 2005 under the Bush administration and has continued unobstructed under the Obama administration. Today, in 2014, ethanol continues to be produced in massive quantities in an effort to meet this mandate.
The result — beyond the fleecing of taxpayers — is a vibrant industry subsidized by the government that is fouling up the environment even worse than before the standard was put in place. This, plus steady pressure on lawmakers from both conservatives and liberals, seems to have finally instigated some action by the suits over at the EPA.
Ethanol’s Broken Promise
In “Ethanol’s Broken Promise,” you will find the following excerpt that pretty much sums the whole thing up...
The Environmental Protection Agency’s pending proposal to cut the amount of corn ethanol that must be blended into gasoline in 2014 by 1.39 billion gallons would lower U.S. greenhouse gas emissions by the equivalent of 3 million tons of carbon dioxide (CO2e) — as much as taking 580,000 cars off the road for a year. It is now clear that the federal corn ethanol mandate has driven up food prices, strained agricultural markets, increased competition for arable land and promoted conversion of uncultivated land to grow crops. In addition, previous estimates have dramatically underestimated corn ethanol’s greenhouse gas emissions by failing to account for changes in land use
And there you go.
Another government plan to save us from ourselves has proven to be little more than a gift for special interests and a financial burden on taxpayers.
Now, I don’t know how this whole thing is going to play out. But I suspect ethanol stocks will get hit pretty hard if the reduction does get approved. Not that I’d play ethanol stocks anyway. They continue to be quite risky.
To a new way of life and a new generation of wealth...
@JeffSiegel on Twitter
Jeff is the managing editor of Energy and Capital and contributing analyst for the Energy Investor, an independent investment research service focusing primarily on stocks in the oil & gas, modern energy and infrastructure markets. He has been a featured guest on Fox, CNBC, and Bloomberg Asia, and is the author of the best-selling book, Investing in Renewable Energy: Making Money on Green Chip Stocks. For more on Jeff, go to his editor's page.