Who gets hurt the most when King Kong battles Godzilla?
The citizens of Tokyo, screaming in terror as they’re stomped by the battling giants.
That’s what’s happening to Americans now as twin titans King Corn and Big Oil tangle over so-called renewable biofuels.
Watch the movie and you’ll see it’s an old story: Washington working with the big guys to stomp out the competition and stomp on the forgotten American citizen (us). Here’s the plot line for “Rigged System,” gas pump edition:
Environmental regulations require every gallon of gasoline to include a certain amount of ethanol, the renewable biofuel made from corn. Ethanol can be added to the gasoline at the oil refinery, or more commonly, it’s added later at a blending facility, which is a separate industry in itself.
Every time they mix ethanol into gas, companies get a credit from the government. That credit can be sold to other companies to help them meet federal requirements. (It’s similar to the “cap and trade” schemes for so-called greenhouse gases.)
The big refineries and big gasoline blenders – one of them owned by Wall Street giant JPMorgan Chase – churn out billions of these credits a year. That’s far more than they can use, so (with help from Wall Street) they sell them for a fast buck to other companies that need them.
A dozen years ago, EPA wrote the rules so only independent refineries (not the big refiners and blenders) are required to buy the credits. That gives Big Oil, King Corn and Wall Street a captive market for their credits. They make out fine. Everyone else loses.
Small independents like the Monroe refinery in Pennsylvania and the Toledo refinery in Ohio spend hundreds of millions of dollars every year buying these credits. They’re forced to lay off workers. It drives up gasoline prices. Mom and pop gas stations are squeezed.
The skyrocketing price of biofuel credits threatens the continued existence of independent refiners. That’s as dangerous as losing the American manufacturing base. If not for independent refiners around the country, Americans would have had a hard time filling their tanks after Harvey shut down the big refineries on the Gulf of Mexico.
The corporate media try to make this out as a contest between two special interests, the global grain traders (the ethanol lobby) and the global energy companies. But it’s actually a different movie, and one we’ve seen before: global corporations working with Washington regulators to smother the little guy and kill the competition.
Changing the EPA regulation so big fuel blenders and global energy companies that create the credits are also responsible for using the credits will level the playing field, protect American jobs, reinvigorate the independent American energy industry and give motorists a break at the pump. And neither King Corn nor our lungs will suffer – ethanol will still be made and used.
Republicans and Democrats, the National Black Caucus, the U.S. Hispanic Chamber of Commerce, non-union wildcatters and organized labor all agree it’s the right thing to do.
When Donald Trump unveiled his America First program of tax, trade, regulatory and energy reform on the campaign trail in Pittsburgh, he said, “I’m going to lift restrictions on American energy and allow this wealth to pour into our communities, including right here in the state of Pennsylvania.”
A remake of the EPA rule will benefit workers in the Northeast, farmers in the Midwest and everyone else. Hopefully we’ll see it before the remake of King Kong vs. Godzilla.