EPA scales back on ethanol requirements

Gasoline Additive Contributing To Massive Habitat Loss

Robert Malsam nearly went broke in the 1980s when corn was cheap. So now that prices are high and he can finally make a profit, he's not about to apologize for ripping up prairieland to plant corn.​

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Across the Dakotas and Nebraska, more than 1 million acres of the Great Plains are giving way to cornfields as farmers transform the wild expanse that once served as the backdrop for American pioneers.​

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This expansion of the Corn Belt is fueled in part by America's green energy policy, which requires oil companies to blend billions of gallons of corn ethanol into their gasoline. In 2010, fuel became the No. 1 use for corn in America, a title it held in 2011 and 2012 and narrowly lost this year. That helps keep prices high.​

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"It's not hard to do the math there as to what's profitable to have," Malsam said. "I think an ethanol plant is a farmer's friend."​

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What the green-energy program has made profitable, however, is far from green. A policy intended to reduce global warming is encouraging a farming practice that actually could worsen it.​

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That's because plowing into untouched grassland releases carbon dioxide that has been naturally locked in the soil. It also increases erosion and requires farmers to use fertilizers and other industrial chemicals. In turn, that destroys native plants and wipes out wildlife habitats.​

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It appeared so damaging that scientists warned that America's corn-for-ethanol policy would fail as an anti-global warming strategy if too many farmers plowed over virgin land.

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The Obama administration argued that would not happen. But the administration didn't set up a way to monitor whether it actually happened.​

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It did.​

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Grassland turns to farmland​

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More than 1.2 million acres of grassland have been lost since the federal government required that gasoline be blended with increasing amounts ofethanol, an Associated Press analysis of satellite data found. Plots that were wild grass or pastureland seven years ago are now corn and soybean fields.​

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That's in addition to the 5 million acres of farmland that had been aside for conservation - more than Yellowstone, Everglades and Yosemite National Parks combined - that have vanished since Obama took office.​

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In South Dakota, more than 370,000 acres of grassland have been uprooted and farmed from since 2006. In Edmunds County, a rural community about two hours north of the capital, Pierre, at least 42,000 acres of grassland have become cropland - one of the largest turnovers in the region.​

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Malsam runs a 13-square-mile family farm there. He grows corn, soybeans and wheat, then rents out his grassland for grazing. Each year, the family converts another 160 acres from grass to cropland.​

Chemicals kill the grass. Machines remove the rocks. Then tractors plow it three times to break up the sod and prepare it for planting.​

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Scattered among fields of 7-foot tall corn and thigh-high soybeans, some stretches of grassland still exist. Cattle munch on some grass. And "prairie potholes" - natural ponds ranging from small pools to larger lakes - support a smattering of ducks, geese, pelicans and herons.​

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Yet within a mile of Malsam's farm, federal satellite data show, more than 300 acres of grassland have been converted to soybeans and corn since 2006.​

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Data shows immense loss​

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Nebraska has lost at least 830,000 acres of grassland, a total larger than New York City, Los Angeles and Dallas combined.​

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"It's great to see farmers making money. It hasn't always been that way," said Craig Cox of the Environmental Working Group. He advocates for clean energy but opposes the ethanol mandate. "If we're going to push the land this hard, we really need to intensify conservation in lockstep with production, and that's just not happening," he said. ​

"If we're going to push the land this hard, we really need to intensify conservation in lockstep with production, and that's just not happening,"​

Jeff Lautt, CEO of Poet, which operates ethanol refineries across the country, including in South Dakota, said it's up to farmers how to use their land.

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"The last I checked, it is still an open market. And farmers that own land are free to farm their land to the extent they think they can make money on it or whatever purpose they need," he said.​

Yet Chris Wright, a professor at South Dakota State University who has studied land conversion, said: "The conversation about land preservation should start now before it becomes a serious problem." Wright reviewed the AP's methodology for determining land conversion.​

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The AP's analysis used government satellite data to count how much grassland existed in 2006 in each county, then compare each plot of land to corresponding satellite data from 2012.​

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The data from the U.S. Geological Survey and the Department of Agriculture identify corn and soybean fields. That allowed the AP to see which plots of grassland became cropland.​

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To reach its conservative estimate of 1.2 million acres lost, the AP excluded grassland that had been set aside under the government's Conservation Reserve Program, in which old farmland is allowed to return to a near-natural state. The AP used half-acre sections of earth and excluded tiny tracts that became corn, which experts said were most likely outliers.​

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Corn profits support communities​

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Corn prices more than doubled in the years after Congress passed the ethanol mandate in 2007. Now, Malsam said, farmers can make about $500 an acre planting corn.​

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His farm has just become profitable in the past five years, allowing him and his wife, Theresa, to build a new house on the farmstead.​

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Four miles south, signs at each end of the town of Roscoe announce a population of only 324. But the town, which relies in part on incomes like Malsam's, supports a school, a restaurant, a bank, a grocery store and a large farm machinery store.​

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The manager of the equipment dealership, Kaleb Rodgers, said the booming farm economy has helped the town and the dealership prosper. The business with 28 employees last year sold a dozen combines at about $300,000 apiece, plus more than 60 tractors worth between $100,000 and $300,000, he said.​

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"If we didn't have any farmers we wouldn't have a community here. We wouldn't have a business. I wouldn't be sitting here. I wouldn't be able to feed my family," Rodgers said. "I think ethanol is a very good thing."​

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Jim Faulstich, president of the South Dakota Grasslands Coalition, said the nation's ethanol and crop insurancepolicies have encouraged the transformation of the land.​

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Faulstich, who farms and ranches in central South Dakota near Highmore, said much of the land being converted is not suited to crop production, and South Dakota's strong winds and rains will erode the topsoil.​

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"I guess a good motto would be to farm the best and leave the rest," he said.​

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Industry takes aim​

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In an unusual campaign, ethanol producers, corn growers and its lobbying and public relations firms have criticized the AP's report. The Agriculture secretary, Tom Vilsack, told the Des Moines Register that the AP project included "a number of inaccuracies and errors." Vilsack said farmers were engaged in other conservation practices, including wetland reserve programs, wildlife habitat incentive programs and EQIP, a program that helps farmers adopt conservation practices.​

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The industry's efforts, which began one week before the AP project was being published and broadcast, included distributing fill-in-the-blank letters to newspapers editors that call the AP's report "rife with errors." Industry officials emailed newspapers and other media, referring to AP's report as a "smear," ''hatchet job" and "more dumpster fire than journalism."​

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"We find it to be just flabbergasting. There is probably more truth in this week's National Enquirer than AP's story," said Geoff Cooper, vice president of research and analysis for the Renewable Fuels Association in a press call with reporters Monday criticizing the investigation.​

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The AP's investigation is based on government data, interviews and observations. It highlights what many researchers have published in peer-reviewed journals and is consistent with reports to Congress by theEnvironmental Protection Agency about ethanol's environment toll.​

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"The AP's reporting on this important topic is a result of months of work and review of documents, and interviews of experts and people on all sides of the public policy debate about this energy resource," said Mike Oreskes, AP's vice president and senior managing editor. "We stand behind our reporting and welcome further insights and discussion."​

 

Yeah,

ADM; "supermarket to the World"

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TIME Magazine October 28, 1996 Volume 148, No. 20
THE FIX WAS IN AT ADM
A RECORD $100 MILLION FINE FOR RIGGING PRICES MAY ADD UP TO THE END OF THE
ANDREAS FAMILY DYNASTY
JOHN GREENWALD
No one expects Archer-Daniels- Midland to change its advertising slogan from
"Supermarket to the World" to "Price Fixer to the World." But that sobriquet
would fit in the wake of the agribusiness giant's $100 million plea bargain last
week with the Justice Department.
After years of denying any wrongdoing, the company pleaded guilty to conspiring
to fix prices for the livestock feed-supplement lysine and for citric acid, an
additive found in products from cosmetics to soft drinks. The $100 million fine,
the largest ever levied in a criminal antitrust case, was more than six times the
amount of the previous record settlement. Further, ADM will pay an additional $90
million to settle civil suits. "In essence, greed, simple greed, replaced any
sense of corporate decency or integrity" at ADM, said Joel Klein, the acting
Assistant Attorney General for antitrust.
The plea bargain turned ADM (1995 sales: $12.7 billion) into an informer for the
government. In exchange for immunity, company officials agreed to become
witnesses against other firms under investigation for conspiring with ADM to rig
prices in the $1.2 billion citric-acid market.
ADM employees may also be called on to testify against their own, notably
executive vice president Michael Andreas, 47, longtime heir apparent to his
father, ADM chairman and CEO Dwayne Andreas, 78. Prosecutors are continuing their
investigation of both the younger Andreas and Terrance Wilson, 58, who heads the
ADM corn-processing division. Neither was granted immunity--meaning that both
could face indictment. ADM said last week that Andreas was taking a leave of
absence and that Wilson had decided to retire.
Importantly, the Justice Department will not pursue a potentially larger case
against ADM for fixing prices in the market for high-fructose corn syrup, a
ubiquitous soft-drink sweetener. This $4 billion industry is nearly four times
the size of citric acid, and some consumer advocates have charged that shoppers
pay higher prices for soda because of ADM's practices.
The Justice Department's case hinged on a company executive turned FBI informant,
Mark Whitacre, who secretly taped meetings that allegedly included the younger
Andreas, Wilson and executives of rival companies. "The competitor is our friend;
the customer is our enemy" was a favorite saying around ADM, according to
Whitacre. Such talk ended when the feds raided ADM's Decatur, Illinois,
headquarters in June 1995. Although the company fired Whitacre and charged him
with embezzlement, which he denies, and although Whitacre later attempted
suicide, the case was strong enough to force ADM's directors to capitulate.
The plea bargain was a public humiliation for Dwayne Andreas, a political insider
who has funneled millions in corporate contributions to Republican and Democratic
candidates. Andreas has particularly close ties to Bob Dole, who has used ADM
corporate planes for campaign trips and vacationed with Andreas in Bal Harbour,
Florida; Dole and his wife Elizabeth purchased an apartment there from Andreas.
Dole has championed myriad agricultural subsidies that have benefited ADM. With
Dole's support, Washington has paid out more than $6 billion in subsidies since
1980 for ethanol, the corn-based fuel that ADM makes; it holds a 65% share of the
$1.5 billion ethanol market.
Andreas had to face down a shareholder revolt last week at the ADM annual meeting
in Decatur. Declaring that "as Harry Truman said, 'The buck stops with me,'" the
chairman apologized for the scandals. Nevertheless, the settlement put paid to an
era at ADM, which Andreas and his family have dominated for 30 years. It appears
unlikely that Michael Andreas will ever succeed his father. "Even if this is not
the end of ADM," says a close business associate of Dwayne's, "this could well be
the end of the Andreas reign."
For the company, last week's penalty represented little more than peanuts--or
soybeans--and was a good deal, considering that ADM benefited financially in the
form of higher prices. The company has $1.3 billion on hand to pay inconveniences
like a $100 million fine. ADM's stock even rose $1.13 a share, to $21.75, on news
of the penalty--which Wall Street had expected to be much higher--and finished
the week at $21.50, raising the company's market value some $500 million. By that
accounting, it can't be said that crime doesn't pay, only that it is a cost of
doing business.
--Reported by Sally B. Donnelly/Washington and William A. McWhirter/Chicago