Big Oil Clinging Onto Refuted Claims

In recent weeks, Big Oil has stepped up its attacks on ethanol. Today, those attacks landed right here in Minnesota. The American Petroleum Institute (Big Oil's big lobbying arm) sent in a letter filled with erroneous claims on ethanol to the Star Tribune. The letter was in response to an opinion piece written by Minnesota Corn Growers Association's President, Ryan Buck, which was published by the Strib on Sept 22.

In that opinion piece, Buck argued that the food verus fuel debate surrounding ethanol is actually a myth constructed by ethanol's detractors. And quite naturally, the API decided to hit back with their own piece, which of course is riddled with dubious claims. Here's our response:

The letter “No myth: mandate fuels food price hikes” (published Sept 29) by Bob Greco of the American Petroleum Institute was filled with erroneous information. Contrary to the writer’s misleading accusations, the Renewable Fuel Standard (RFS) has not driven up food prices.

Instead, it is gasoline prices that impact food prices. One only has to look at the UN FAO’s world food price index and crude oil prices to see the deep correlation between the two. Moreover, a recent report by the Renewable Fuels Association points out that retail food prices have been unresponsive to changes in corn prices. In fact, the USDA’s corn output estimates for the year indicate that there is an oversupply of corn. In turn, corn prices have fallen yet prices at the grocery store remain unchanged.

Greco’s claim that the RFS would raise gas prices is just as false. Last week, Iowa State University’s Center for Agricultural and Rural Development released a new paper which said that increasing ethanol consumption will have no effect on gas prices. And based on today’s price for gasoline and ethanol, consumers in Minnesota are paying on average 16 cents less per gallon than they would if gasoline sold at the pumps did not contain 10 percent ethanol.

Last but not least, thanks to the RFS, there are fewer greenhouse gasses emitted in America. The Argonne National Laboratory has found that greenhouse gas emissions from ethanol is on average 44 percent less than gasoline.