Trade War and Oil Industry Waivers Continue to Harm Farmers

Empty grain receiving facility - photo credit: Washington Post.

Ironically, it is Republicans who preach - or at least pretend to preach - the mantra of personal responsibility and that bad decisions and actions should reap consequences on those who make bad life decisions. Thus, for example if suffers the consequences of being gay or poor, somehow one's choices are to blame, not social and economic barriers.  Applying this rule, it is delicious to see Mid-West farmers who helped elect Donald Trump pay an enormous economic and financial price for their bad and - in my view - morally bankrupt decision. I truly worry about the children and youths who are suffering as a result, but as for the adults who chose to vote for a narcissistic demagogue who played to their worse instincts and bigotries, they sadly deserve their fate.  Frighteningly, many continue to refuse to see their own fault in what has now befallen them.  A piece in the Washington Post looks at the continued economic devastation  Trump's self-created trade wars and pandering to the oil industry continues to wreak in the Mid-West in particular.  Here are story highlights (Note the idiocy and insanity: "Many of those grumbling about Trump today concede they are unlikely to vote for a Democratic presidential candidate next year."):

SIOUX CENTER, Iowa — On a typical day, about 80 tractor trailers full of corn line up to dump their loads at Siouxland Energy Cooperative, the ethanol plant just outside of town. The air throbs with the noise and vibration of this industrial moonshine operation, which distills nature’s harvest into a cleaner-burning fuel.

But today, the warm Iowa sun shines on an almost empty parking lot, and the machinery sits idle.

After two decades, Siouxland this month halted operations following the Environmental Protection Agency’s decision to exempt 31 small oil refiners from a federal law requiring them to blend ethanol in their gasoline. The waivers, which the Trump administration has approved almost four times as often as its predecessor, have undercut demand for ethanol and the corn used to make it, farmers said.

“The waivers are what pushed us over the edge,” said Steve Westra, 46, the plant manager. “It absolutely killed the potential for anybody to make any money at this.”

For Iowa farmers already suffering from an extended trade war with China, the ruling has made ethanol the focus of their growing ire over President Trump’s policies.

The trade war has cost farmers potential Chinese orders for the corn-based fuel as well as for a byproduct that is used as animal feed. Now, the refinery exemptions are compounding the financial pain — and threatening political consequences for [Trump] the president, who won this state and its six electoral votes in 2016.

“I supported Trump in the last election. Today, if the election were held, I don’t think I could vote for him,” said Kelly Nieuwenhuis, 60, a corn and soybean farmer in Primghar, about 40 miles east. “It’s definitely growing, the displeasure with the Trump administration.” . . . .Many of those grumbling about Trump today concede they are unlikely to vote for a Democratic presidential candidate next year.

In recent days, amid a rising impeachment furor, the White House has scrambled to midwife a compromise between ethanol advocates and the oil industry. . . . The discontent in deeply conservative northwest Iowa has its roots in [Trump’s] the president’s confrontation with China, which farmers initially backed.

The trade war’s mounting costs are especially evident in this corner of the corn belt. Iowa’s fourth congressional district, which sprawls from the Nebraska and Minnesota borders to the outskirts of Des Moines, has lost more export sales to China than any other district in the country, according to the U.S.-China Business Council.

China’s retaliation for [Trump's] the president’s tariffs on Chinese goods last year cost farmers 78 percent of their $856 million in oilseed and grain shipments to China, the study found.

Those figures may understate the toll. The trade war erupted as farmers were counting on a major increase in Chinese orders for U.S. ethanol and an ethanol byproduct called distillers dried grain (DDG.) Those potential sales for the past two years have now become casualties of the trans-Pacific conflict, Nieuwenhuis said.

China in 2015 had purchased more than 5 million metric tons of DDG, a high-protein animal feed, valued at $1.4 billion, according to the U.S. Grains Council. By the following year, China was the No. 3 export market for American ethanol, purchasing more than 200 million gallons, worth almost $350 million, the industry group said. Since then, DDG sales have plunged by roughly 98 percent; ethanol orders are virtually nonexistent.

China targeted Midwestern farmers for retaliation, calculating that complaints from a key part of Trump’s political base might cause him to buckle. The president so far has instead tried to make farmers whole with a $28 billion bailout and promises of future riches.

Neither seems to be working. Multiple farmers said the Agriculture Department payments that [Trump] the president bills as full compensation for lost Chinese sales, while better than nothing, still leave them in the red.

[The Trump/Pence] administration has exempted more than 38 billion gallons of gasoline and diesel fuel from ethanol blending requirements compared with just 7.4 billion in President Obama’s final three years, according to the Renewable Fuels Association, an industry group.

It is sad that racial animus and clinging to extremist religious beliefs mean more to a majority of these farmers than their own economic survival.  Adding insult to injury is that the rest of America has been forced to pay 28 billion to save these farmers from the consequences of their own idiocy and bigotry.

Will Trump's Offshore Drilling Plan Defeat Him in 2020

Trump's dangerous offshore drilling policies could bring a major oil spill to a coast near you.

To date the Trump/Pence regime has shown time and time again that it puts the financial interest of big business groups be they coal, oil or pharmaceuticals, ahead of the interests and health of average American voters.  To try to save the moribund coal industry, Trump has been rolling back clean air and clean water regulations with no concern about the health care nightmares increased air and water pollution will American citizens.  All that matters is further lining the pockets of big business.  Now, Trump is pushing for offshore drilling from Florida northward along the Atlantic coast, including Virginia (which along with Maryland will be harmed by Trump's efforts to eliminate funding for the cleaning up of the Chesapeake Bay) despite the strong opposition from residents of the states that would be severely harmed by a major oil spill in their offshore waters.   A piece in Politico looks at how this highly unpopular plan could see Trump lose his 2020 re-election effort with particular emphasis on Florida.  Here are article highlights:

The Trump administration is considering auctioning off Florida’s coastal waters for oil and gas drilling — and Republicans are warning it could cost the president dearly in Florida in the 2020 election.

An industry lobbying offensive has put it on the cusp of achieving its holy grail: access to the resource-rich eastern Gulf of Mexico. The idea is so politically toxic in Florida that past presidents haven't even entertained it. But behind the scenes, oil and gas interests are appealing to Trump's desire to turbo-charge U.S. energy production, including his past openness to drilling off the Florida coast.

But giving it the green light would be tantamount to a declaration of war on his second home state, given the uniform opposition from Florida Republicans, including prominent allies like Sen. Rick Scott, Gov. Ron DeSantis and others.  “He would have a price to pay for that,” Rep. Ted Yoho (R-Fla.), a staunch Trump supporter, told POLITICO.

Multiple oil and gas industry sources told POLITICO that the eastern Gulf, along with the Atlantic coast, are included in the administration’s current five-year off-shore drilling proposal, which hasn’t yet been released.

The administration's position was muddied when former Interior Secretary Ryan Zinke held an elaborately staged Jan. 2018 meeting with Scott, then Florida's governor, to declare the state wouldn’t be on the drilling map. The announcement was seen as a favor to boost Scott’s electoral fortunes in his ultimately successful challenge against Democratic incumbent Bill Nelson, who tried to use environmental issues to separate himself from the Republican challenger.

Trump was upset by the announcement. People familiar with his reaction said Zinke’s statement came without White House approval and contradicted the administration’s “energy dominance” message.

Both parties in Florida oppose offshore drilling. Memories of the 2010 Deepwater Horizon oil spill, which sent tarballs ashore in Florida, bring fears of a future spill damaging the state’s fisheries and tourism. Many in the state also say drilling would conflict with military exercises in the area.

Offshore drilling is broadly unpopular in Florida. A Quinnipiac University poll of Florida voters released March 13 showed 64 percent oppose the practice. Republicans, though, supported it by a 54-38 percent margin. A ballot measure banning oil and gas development in state waters passed overwhelmingly in November.

“I’m going to do everything I can to make sure Florida remains off the table,” Scott told POLITICO in an interview earlier this month. “I’ve been very clear to let the White House know where I stand. This is very important to me.“

The current plan includes a “buffer” to keep rigs at least 100 miles from Florida’s shoreline, according to industry representatives. They said they plan to present Trump with several options for each of the major regions to be covered under the plan, including the mid-Atlantic and Pacific.

Florida lawmakers from both parties have signed numerous letters rejecting offshore drilling, no matter how far from the state’s shoreline. Many also have pushed back on what’s known as seismic testing, a precursor to drilling that involves blasting sonar from boats toward the seafloor to search for buried oil and gas deposits. Both chambers of the state legislature are moving resolutions rejecting offshore drilling in the Gulf.

“We don’t want to see any of it in the Gulf, I don’t want to see any of it on the Atlantic side, which is where I represent,” Rep. Brian Mast (R-Fla.) told POLITICO. “We’re not looking for Deepwater Horizons off of Jensen Beach, Miami Beach, Fort Lauderdale Beach, Fort Pierce Beach, and we don’t want to see it out there in the Gulf.”

Even DeSantis, whom Trump endorsed in a crowded Republican primary last year, signed an executive order in January committing the state’s Department of Environmental Protection to “adamantly oppose” offshore drilling. Pressure on Republicans to oppose drilling has only grown since DeSantis was elected in November, as Democrats have homed in on fighting climate change.

“It seems hard to believe that the administration would move forward with drilling off the coast of Florida less than two years before a presidential election,” said Alex Conant, a partner at Firehouse Strategies and former aide to Sen. Marco Rubio (R-Fla.). “It would certainly be an issue that Democrats would try to use against [Trump] throughout the state.”

Trump cares nothing about the environmental damage his horrible regime's policies are causing or the health harms done to average Americans.  More dollars to oil companies and plutocrats is all that matters. 

"Stockbroker’s Bible" to Oil Industry: Accept Your Demise

In a recent editorial the august Financial Times had a message for international oil industry: the hand writing is on the wall: accept your own decline and either diversify or retain capital to your shareholders.  With climate change a growing international concern, compliance with new regulations will significantly curtail the demand for oil and oil products.  Indeed, the trend has already begun and with falling demand in the West, prices remain historically low and exploration projects have been curtailed.  For too many decades, American and European foreign policy has been focused on keeping oil supplies flowing from the perpetually unstable Middle East.  But for oil and the delusions of the Bush/Cheney regime, the Iraq War and its ensuing unintended consequences might not have occurred. Frankly, the hasten demise of reliance on oil could make the Middle East increasing irrelevant - something that would be a true positive.  Here are editorial highlights:

The annual meetings of some of the world’s largest oil companies this week were like therapy sessions for an industry that is suffering from existential angst. The international objective of holding the increase in global temperatures to “well below” 2C, agreed at the Paris climate talks last year, implies the obsolescence of all fossil fuel production within the next few decades. The oil companies have not yet reconciled themselves to quite what this means.

If governments stick to that commitment, fossil fuel companies will either have to find ways to stop greenhouse gas emissions from their products, or shift into renewable energy, or go out of business. At the annual meetings of oil groups including ExxonMobil and Royal Dutch Shell, that prospect was argued over by executives and shareholders, without conclusive result.

In their public presentation, at least, the European groups including Shell and Total are more willing to face up to the threat of climate change than their US rivals. 

One option for escaping those limits is for the big oil companies themselves to take part in the energy transition. Total, which has the most ambitious plans for diversification, has set a goal of having 20 per cent of its assets in low-carbon energy by 2035.

Rather than investing in potentially stranded oil and gas projects, or gambling on new technologies that they do not fully understand, the oil companies would do better to continue returning money to shareholders through dividends and share buybacks.

The commitments made by Chevron, BP and most other groups to maintaining their dividends during the downturn, even if they have to borrow to do so, is an encouraging acknowledgment of that reality, even if the companies do not put it in those terms.

Instead of railing against climate policies, or paying them lip-service while quietly defying them with investment decisions, the oil companies will serve their investors and society better if they accept the limits they face, and embrace a future of long-term decline.