How Tom Vilsack Has Expanded Iowa’s Favorite Corporate Welfare Program

How Tom Vilsack Has Expanded Iowa’s Favorite Corporate Welfare Program

During his tenure in Washington, the former Iowa governor has made sure that the wasteful ethanol and biofuels sector remains addicted to taxpayers’ money.
Robert Bryce
By

On January 15, President Obama named Agriculture Secretary Tom Vilsack to head an effort to reduce heroin use in rural America. It was a good choice—for if anyone in Washington knows about addiction, it’s Vilsack. During his tenure in Washington, the former Iowa governor has made sure that the ethanol and biofuels sector remains addicted to taxpayers’ money.

Sure, Monday’s Iowa caucuses are a key reason presidential candidates march in near-lockstep in support of corn ethanol. But few modern politicians have done more to hype biofuels than Vilsack. That hype has helped bring home the bacon to Iowa, which produces more ethanol than any other state.

Since taking office in January 2009, Vilsack has justified his biofuel boosterism by repeatedly hawking the same bogus claims that have befouled American energy policy since the 1970s—namely, the bogeyman of foreign oil and the myth of energy independence.

Ethanol Costs Drivers Billions

Vilsack, the only member of Obama’s original cabinet who’s still on the job, reliably repeats Big Corn’s fibs, particularly about the cost and environmental impact of ethanol and biofuels. For instance, in December, shortly after the Environmental Protection Agency (EPA) increased the amount of corn ethanol it forces gas producers to blend into America’s gasoline supply, Vilsack claimed, “We are saving Americans money at the pump with improved and expanded ethanol and biodiesel production.”

To get the same amount of energy contained in a gallon of conventional gasoline, a motorist would have to purchase about 1.5 gallons of ethanol.

A bigger fib is hard to conjure. Ethanol-blended gasoline doesn’t save motorists money. It’s the exact opposite. Ethanol contains about 76,000 Btu per gallon. Gasoline contains about 114,000 Btu per gallon. Thus, to get the same amount of energy contained in a gallon of conventional gasoline, a motorist would have to purchase about 1.5 gallons of ethanol.

Since 1982, the state of Nebraska (the second-largest ethanol producer) has been collecting prices for ethanol and gasoline at fuel depots in Omaha. That pricing data shows that, when measured on an energy equivalent basis, ethanol has always been more expensive than gasoline.

As I showed last year in a report for the Manhattan Institute, the ethanol mandates are now imposing $10 billion in additional fuel costs annually on U.S. motorists, over and above what they would have paid for gasoline alone. That means that each of the 212 million licensed drivers in the United States are paying about $47 per year in excess fuel costs. Thus, during the nine years Vilsack has been in office, the ethanol mandates have cost Americans about $90 billion.

Ethanol Also Genuinely Hurts the Environment

Also in December, Vilsack claimed that the increased “use of biofuels…support efforts to reduce greenhouse gas emissions.” Again, the secretary of Agriculture is simply repeating the ethanol lobby fibs. The truth is that corn ethanol is worse for greenhouse gas emissions—and air quality—than conventional gasoline.

Corn ethanol is worse for greenhouse gas emissions—and air quality—than conventional gasoline.

In May, Emily Cassidy, a research analyst at the Environmental Working Group, issued a report that found the carbon intensity of corn ethanol is 20 percent higher than that of standard gasoline. In 2014, she wrote, domestic corn ethanol consumption “resulted in 27 million tons more carbon emissions than if Americans had used straight gasoline in their vehicles.” Cassidy concluded that “the federal corn ethanol mandate has resulted in a massive influx of dirty corn ethanol…The only interest it benefits is the ethanol industry.”

In August, John DeCicco, a research professor at the University of Michigan’s Energy Institute who has been studying automobile fuels for more than two decades, found that greenhouse gas emissions from corn ethanol are up to 70 percent higher than those from standard gasoline. In an interview, DeCicco told me, “Biofuels are not only costly, they are harmful.”

Furthermore, research done by the EPA—an agency charged with protecting Americans’ health—has determined that ethanol-blended gasoline increases emissions of air pollutants. In 2010, the agency published a 1,100-page document detailing the environmental and economic effects of the Renewable Fuel Standard, the federal mandate that requires retailers to blend ethanol into the fuel they sell to the public. The agency determined that adding ethanol to gasoline results in higher emissions of air pollutants including nitrogen oxides.

The EPA has concluded that ethanol-blended fuel is deadly to the American public.

The EPA found that ethanol-blended fuel increases “emissions of hydrocarbons, nitrogen oxides, particulate matter and other pollutants” and that will “lead to increases in population-weighted annual average ambient PM [particulate matter] and ozone concentrations, which in turn are anticipated to lead to up to 245 cases of adult premature mortality.” In other words, the EPA has concluded that ethanol-blended fuel is deadly to the American public. Yet the secretary of Agriculture continually praises the fuel.

The EPA’s 2010 findings are similar to conclusions the agency reached back in 2007, when it determined that increased use of ethanol will result in “an increase in total emissions of volatile organic compounds and nitrogen oxides (VOC + NOx) between 41,000 and 83,000 tons.” It continued, saying that ethanol-blended fuel will result in increases of volatile organic compounds emissions of “between 4 and 5 percent and an increase in NOx emissions between 6 and 7 percent from gasoline powered vehicles and equipment.”

Sending Your Money to Pad Cronies’ Wallets

When he’s not promoting ethanol, Vilsack is promoting so-called “advanced” biofuels, that is, liquid fuel made from non-food plants, like wood and grass. Earlier this month, Vilsack, along with Navy Secretary Ray Mabus, extolled the Navy’s deployment of what the Defense Department is calling the “Great Green Fleet.”

In 2010, the USDA provided an $80 million loan to Range Fuels. Less than two years later, Range Fuels was bankrupt.

Mabus and Vilsack went to San Diego so they could watch the USS William P. Laurence, a guided missile destroyer, get refueled with a blend of diesel fuel and advanced biofuel. In a U.S. Department of Agriculture (USDA) press release, Vilsack was quoted as saying that the Navy’s use of biofuels shows “America is on its way to a secure, clean energy future, where both defense and commercial transportation can be fueled by our own hardworking farmers and ranchers.”

The Navy has awarded $210 million to three companies that are building refineries to make biofuels using woody biomass, as well as municipal garbage and used cooking oil. The Department of Agriculture is throwing in $161 million in crop supports.

Vilsack and the USDA are throwing good money after bad. In 2010, the USDA provided an $80 million loan to Range Fuels, a company that claimed it could “make cellulosic biofuel from wood chips.” Less than two years later, Range Fuels was bankrupt. In 2011, the USDA provided a $250 million loan guarantee to Coskata, a company that claimed it, too, could turn wood chips into biofuel. A year later, Coskata announced it was abandoning the wood-to-ethanol process in favor of trying to convert natural gas to ethanol.

In 2011, Vilsack oversaw the dispersal of about $15 million to companies in 33 states to “support the production and usage of advanced biofuels.” The justification was a familiar one. In a USDA press release, Vilsack said “The Obama Administration is working aggressively to bring greater energy independence to all of America.”

A Dangerous Rein of Error Without End

Here’s perhaps the scariest thing about Vilsack: He could stay on as secretary of Agriculture after Obama leaves the White House. Indeed, Vilsack, the longest-serving ag secretary in 50 years, appears to be angling for an even-longer tenure.

Back in September, Vilsack endorsed Hillary Clinton for president. He said Clinton’s “support for the Renewable Fuel Standard and bio-based manufacturing as important parts of a revitalized rural economy makes clear she will work hard to promote meaningful economic opportunity throughout the country.” Vilsack also did several campaign stops in Iowa with Clinton after giving her his endorsement.

Thus, if Clinton wins the White House in November, Vilsack could keep his job—and, in doing so, continue soaking American taxpayers for the benefit of the biofuel scam.

Robert Bryce is a senior fellow at the Manhattan Institute. His latest book is “Smaller Faster Lighter Denser Cheaper: How Innovation Keeps Proving the Catastrophists Wrong.”

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