The Problem With The Ethanol Industry

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The U.S. ethanol industry has never been consistently profitable. The reason is the very nature of the industry's business model.

Flags fly outside the POET LLC ethanol biorefinery in Gowrie, Iowa, U.S., on Friday, May 17, 2019. Stockpiles of U.S. corn ethanol sank to the smallest since July even as production of the biofuel climbed, Department of Energy data showed on Wednesday. Photographer: Daniel Acker/Bloomberg", I would like to see a healthy U.S. ethanol industry. I think it's important for the U.S. to produce as much fuel as we can domestically, and it's important to keep U.S. farmers in business.

Consider the business model of the ethanol industry. It is essentially to get the federal government to force consumers to use their product. That is not a sustainable business model. It creates a cycle of dependence that has been in place since the industry was in its infancy.Renewable Fuel Standard was created by the Energy Policy Act of 2005.

Despite this huge increase in mandated ethanol, it has never been enough to bring continuous prosperity to the ethanol industry, or to the corn farmers that supply it. In my, I showed that major ethanol producers have seen their share prices hit hard over the past two years.

 

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Really concerned about billionaire's feeling screwed over. Weepy, even.

'Refiners object to the entire concept of being forced to blend ethanol and for being penalized if they don’t. Refiners have spent billions of dollars complying with the ethanol mandates. That cost to the refiners is essentially a transfer of wealth to the ethanol industry.' RFS

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