Blog: Do Lawmakers Have Political Courage Regarding Ethanol?

Rep. Reynolds helped secure $25 million in loan guarantees for Western New York Energy’s ethanol plant in Medina.  That means taxpayers are on the hook for $25 million if the plant fails.

“Mike Sawyer is a no-nonsense guy who does his homework,” Reynolds says about the man running the plant.  “We can’t lose the goal of less dependence on foreign oil.  That was the driving force behind corn ethanol and it continues to be.”

Reynolds does not see corn ethanol as a mistake, or even as something that is on the way out.  “Both parties have promised to continue the great opportunity of ethanol,” he told me over the phone regarding increases in federal funding for corn ethanol.  “Alternative energy currently only provides for two percent of the country’s need.  Demand is way up, and energy is evolving.  Corn ethanol is not totally cost efficient now, but with the price of gasoline, corn ethanol has to be a factor in the energy market.”

Food prices are spiking, and Reynolds does not deny that corn ethanol has played a role.  “Certainly there are cost concerns, but there has been a floor value established for the price of corn, and that’s a good thing.  Western New York farmers can plant and grown corn and know there is a viable market for it.”

Retro-fitting plants to move from corn ethanol to other biofuels (like switch grass) is a popular idea among politicians.  Reynolds is no exception.  “It’s one of the things that excited me about the project.  (Mike Sawyer) is fully aware of where he is today and where he needs to be tomorrow.”

Would he help bring more federal funding or loans to new corn ethanol operations?  He’s open to the idea, and he touts the impact of job creation.  Reynolds explains that other corn ethanol plants are being considered in Buffalo and other areas, though nothing is concrete yet.  “We should take a look at those opportunities, though I don’t think it should be entirely funded by the government.  There needs to be a blend.”
  
And on former governor George Pataki, who banged the drum to get the Shelby plant built, Reynolds volunteered this:  “Everyone knows he was thinking about running for president, and (the Shelby plant) was a chance for him to say that New York built an ethanol plant on his watch.”  I pressed Reynolds on whether it was appropriate that politics might have played a role in the state’s decision to subsidize the plant.  “He genuinely cares about renewable energy.  There’s no doubt about it.  I’m just saying I kid him about it because the timing was coincidental.  His record on alternative energy speaks for itself.”

He’s in a much easier situation politically; Senator Alesi has not secured funding for ethanol operations.  But he presents some strong opposition to new ethanol plants.

“The intentions with this were good, but the results have not been what we expected,” Alesi says.  “The impact on food prices, for one thing, is a real concern.  This should not be about assigning blame but making sound decisions going forward.”

Given that comment, I expected that the Senator would say we ought to stop subsidizing corn ethanol on the state level (producers get 15 cents a gallon totaling a maximum of $2.5 million per year).  But he said we should continue to subsidize.

“You can’t stop, because you’d be taking apart an industry that you helped create.”

Given the fact that Congressman Kuhl traveled to Brazil last year to study alternative energy, I asked for his assessment of corn-based ethanol, and his reaction to a study showing that many biofuels currently being developed have a negative effect on the environment.  His staff responded with the following written statement:

“There is no single solution for achieving energy independence. In the 145 town hall meetings that I held this year, the number one concern expressed was the rising cost of gasoline and the importance of alternative energy. As we have seen, the cost of gasoline continues to rise and we are constantly reminded that our country does not yet have a solution to this problem. The only way we are going to combat this energy crisis is to maintain a diverse portfolio of energy sources, including but not limited to wind, solar, biodiesel, biomass, hydroelectricity, and nuclear.”

Maziarz secured the $6 million from New York state that finished the deal with Western New York Energy’s ethanol plant.  Now, Maziarz is touting a new Senate bill designed to push development toward cellulosic ethanol.

“What I would not want to see is construction of more corn ethanol plants,” Maziarz says.  “We risk flooding the market.  There’s no doubt that corn-based ethanol is already subsidized too heavily, which is why I want to see us shift our focus to other forms of energy.”

But supporting corn-based ethanol was not a mistake, he insists.

“Not a mistake at all.  There is a great deal of benefit from corn-based ethanol, and I have a lot of faith in the Sawyers and their operation.”

The candidates to replace Tom Reynolds might find themselves in somewhat uncomfortable circumstances regarding corn-based ethanol.  The industry is beginning to thrive in their district, even though criticism is intensifying.  Powers released this assessment of corn-based ethanol:

“Corn based ethanol is by no means a silver bullet solution, but it should be one of the alternatives on the menu.  Corn based ethanol is a stepping stone toward the development of cellulosic ethanol.  Cellulosic ethanol can be made from nonfood plants so it is more readily available, will drive food prices down, and reduce the price of gasoline. We must continue investment in research and development of ethanol methods so we can develop cellulosic ethanol as a viable alternative energy to wean ourselves off of foreign based oil.”