Global news project highlights ethanol industry's lobbying efforts

An investigation by the New England Center for Investigative Reporting and Connectas into the ethanol industry’s lobbying has found that over the last five years the industry -its companies and associations- has spent around $30 million a year for a total of approximately $150 million between 2008 and 2012. That’s $10 million more a year than the amount spent in the previous five years, all in an effort to influence the U.S. Congress and Senate.

According to the news project, the top 15 biofuel-production companies include Archer Daniels Midland, Cargill and Bunge. Archer Daniels Midland – based in Decatur, Ill. – holds the number one slot as it produces more than 1.7 billion gallons of ethanol a year.

The industry’s primary goal is ensuring the survival of the Renewable Fuels Standard that guarantees that a minimum percentage of ethanol and other biofuels be blended with gasoline each year. The U.S. industry also lobbied for the Volumetric Ethanol Excise Tax Credit, a tax incentive of $0.45 cents for every gallon of ethanol that was blended in gasoline until 2011.

Since 2000, at least 5,980 firms reported lobbying for ethanol, according to records obtained from the Center for Responsive Politics and processed by the Computer Science and Artificial Intelligence Laboratory at the Massachusetts Institute of Technology (MIT). Among these firms– the biggest players lobbying for the ethanol industry– are at least 16 companies that produce the biofuel and 21 associations that have among its members firms connected to the ethanol industry.

New England Center for Investigative Reporting: Ethanol industry battles to keep incentives

By Emilia Diaz-Struck

The United States Congress is the main playing field where the largest ethanol producers try to ensure the survival of incentives that benefit their industry. They’re up against environmentalists, who are seeking to end those benefits, because they are disgruntled by what they consider an unfulfilled “green” promise.

Over the last two years, laws and regulations benefiting the ethanol industry have been the subject of a heated battle in the U.S. Congress – between the industry itself and environmentalists. The showdown has focused on two items: the Renewable Fuels Standard (RFS) that establishes a minimum yearly percentage of ethanol and other biofuels to be blended with gasoline and the Volumetric Ethanol Excise Tax Credit (VEETC), a tax that, for years, gave the American ethanol industry an advantage. In the end, the ethanol industry won the battle to keep the RSF but the environmentalists won too, by killing the VEETC.

In Latin America, the battle is about maintaining an obligatory percentage of ethanol in gasoline. In the region, the industry has been successful in securing loans from the World Bank Group, the Inter-American Development Bank and the Development Bank of Latin America CAF. The loans have totaled more than $1.4 billion over the last eight years. That money is being used to develop the sector and help it stay afloat. Another strategy the industry uses to get its way in the halls of power – political contributions to powerful politicians.

“Corn lobbying – corn is a raw material for ethanol- is one of the biggest and most powerful in the US. They have very deep pockets and spend a lot of money in Congress to make their goals known”, said Michal Rosenoer, one of the key players on the environmentalists’ side. She oversaw biofuels policy for Friends of the Earth, an organization that by October 2012 had reported $18 thousand spent on lobbying for the year.

Emilia Diaz-Struck is a journalist with Connectas, a South American-based nonprofit journalism project that promotes the production, sharing, training, and dissemination of information with a transnational perspective. Emilia was a Reporter-in-Residence at The New England Center for Investigative Reporting from October through December, 2012. The program was underwritten by a generous grant from the Open Society Foundations.