Natural Gas 4 Us: Energy’s Big Bang Theory

Let’s return to a much-discussed topic that of energy production and use in the United States, Everyday at the gas pump we are see that ethanol is added to our gas. Ever since 2005 ethanol has been added to our gasoline. Much of this ethanol comes from corn. The American corn farmer starting in 2007 could receive a complicated indirect subsidiary. The Renewable Fuel Standard (RFS) program under the Clean Air Act was created by George W. Bush under the Energy Policy Act of 2005, It was further expanded by the Energy Independence and Security Act of 2007. The EPA RFS program works with the U.S. Department of Agriculture and Department of Energy providing a subsidy payment that supports higher ethanol pricing to refiners and higher corn prices to mainly Midwest farmers. The subsidies are big money billions of dollars each year.

The 2007 enactment of EISA significantly increased the size of the RFS program and made key changes, including: Extending and increasing yearly volume requirements out to 2022 and more recently to 2027. It adds explicit definitions for renewable fuels to qualify. It creates grandfathering allowances for volumes for certain existing refineries. More importantly it sets volumes of ethanol to be blended with gasoline used in America.

American corn farmers through the program are ultimately subsidized to grow corn to power our vehicles. Ethanol refining plants are scattered across the country, the largest in the Midwest. Here in Pennsylvania corn can be shipped to a plant in Clearfield County rather than traditional farm markets. The ethanol blend helps reduce overall emissions including lead and expand corn markets for our farmer. Unfortunately, the large multinational corporate agriculture cartels have managed to manipulate and control the markets so now imports are nudging out American farmers over price, the “Big” pay the small less whether produced here or say Brazil. At the same time cost get “bigger” for the farmer: land prices inflate, fuel and fertilizer costs increase, demand larger new and more expensive equipment. As natural soil nutrients are reduced the only way to increase yields is to have larger farms and higher farming costs, squeezing out small farmers.

Soybeans is another “Big” Squeeze on our farmers, the ping pong ball being hit around the world markets, Follow the elusive bean market. Who is to be the buyer, China, Argentina, the saturated low price US market, and how much inroads will Brazil imports achieve. This in turn sub plants our farmers and keep the grain silos full and farmer bank accounts in the red. In a way we now have a new class of sharecropper and new corporate or wealthy landlord. In a recent interview with Martha Raddatz on ABC’s “This Week” Secretary Bessent sought to cast his own lot with the farm community. “Martha, in case you don’t know it, I’m actually a soybean farmer, so I have felt this pain too,” Bessent said. The New York Times reported in August that Bessent owns as much as $25 million worth of North Dakota corn and soybean farmland, which he rents out for more than $1 million a year in income. Bessent has delayed divesting his farm holdings, required under an ethics agreement in place since he took office, though he plans to by the end of the year.

Circling back home. All media is reporting about AI and need for energy for huge projects. However, the new state budget finally passed. Part of the budget deal repeals Pennsylvania joining RGGI. This hopefully stimulates additional possibility of smaller CNG electric generation projects, localized to specific rural counties in need of economic stimulus. In the budget there is also funding for community solar projects that could be co-sited and make smaller dual generation projects possible. The focus could be on the nine counties from Lawrence to Cambria County in developing small and strategic gas well development and corresponding CNG generation projects, with good fracking and water use programs. No Big Bang rather it could it be good for All to be Small?

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