It's not just Big Oil: A look at Big Corn, which is also suing over EPA emissions rules

Last week, Reuters reported that "Oil and corn groups team up against Biden's tailpipe emissions rules." Presidential elections always restore corn to the headlines because corn is such enormous business that the tall grass should be called "Gold on the Cob." That's not just gold for farmers, either, thanks to corn's requirements and reach. Industrial farming companies like Cargill, chemical companies like DuPont and Monsanto, and ethanol refiners like Poet Biorefining and Archer Daniels Midland all derive massive benefit from the amazing maize.

The corn lobby has a touchy relationship with Big Oil. When the Associated Press published "The Secret, Dirty Cost of Obama's Green Power Push" in 2013 (highly recommended read), we're told, "An industry blog in Minnesota said the AP had succumbed 'to Big Oil's deep pockets and powerful influence.'"

As governments have taken more steps to enact regulations aiming to curb greenhouse gasses, though, corn finds common cause with oil. Mandated reductions in traditional fuel usage threaten refiner profits, and less fuel used — or no liquid fuel, at least directly, in the case of electric vehicles — means less ethanol added, reducing ethanol purchases and subsidies distributed along the value chain. Various lawsuits filed against the EPA in the past few weeks represent the combined forces of the American Petroleum Institute, National Corn Growers Association, American Farm Bureau Federation, Renewable Fuels Association and National Farmers Union.

It's a topic so big it could come up in tonight's presidential debate (CNN and other channels, 9 p.m. Eastern). The higher fuel economy standards are an initiative of President Biden's administration (he made a case for ethanol in 2022 in a speech inside a Poet Biofuels building); former President Donald Trump, meanwhile, complains about EVs every chance he gets. The big business of corn is one reason why.

RFA President and CEO Geoff Cooper summed up the problem for the ethanol lobby with, "[The] EPA grossly exceeded its statutory authority by finalizing regulations that effectively mandate the production of EVs, while blatantly excluding the ability of flex fuel vehicles and low-carbon, high-octane renewable fuels like ethanol to achieve significant vehicle emissions reductions."

Using ethanol to power cars and reformulate gasoline isn't new. Henry Ford's 1908 Model T could run on ethanol because gasoline wasn't the commodity it is today. Refiners began mixing ethanol into gasoline in the 1920s to get higher octane ratings, which reduced knock (lead was a much more famous octane enhancer). And ethanol use spiked during World War II when gas supplies were diverted to the U.S. military.

The Calgren Renewable Fuels ethanol plant in Pixley, Calif. (AP)

The upsides

Ethanol subsidies aren't new. They began in the U.S. with the Energy Policy Act of 1978, and remained in effect as either a subsidy and/or tax credit until the end of the Volumetric Ethanol Excise Tax Credit in 2011, by which time the system was said to cost the government more than $5 billion per year. Well, the payouts didn't end, really, the government simply created new methods of providing incentives, grants, loan guarantees, production payments and tax credits.

Leaning on ethanol to reduce greenhouse gas emissions isn't new, either. The 1990 Clean Air Act required more oxygenated gasoline in areas of the country with elevated ground-level ozone measurements. Increased oxygenate helps gasoline burn more completely during combustion, reducing the amount of carbon monoxide, soot, and environmentally harmful compounds that escape from a vehicle's tailpipe.

Ethanol and MTBE (methyl tertiary butyl ether) became popular oxygenates. As researchers began to question MTBE's ability to break down in water, though, ethanol — an organic resource — found more favor. As some states began declaring MTBE unwelcome beginning in 2000, the U.S. government's 2003 Energy Bill declared ethanol the only legal fuel oxygenate for the U.S. market.

That established a federally guaranteed market for ethanol for the first time (as opposed to refiners having a choice in oxygenate). Ethanol doesn't need to be made with corn — soybeans and sorghum are other options — but renewable fuel in the U.S. today is effectively corn-based.

Two years after that energy bill, the Renewable Fuels Standard (RFS) in the Energy Policy Act of 2005 exploded ethanol's guaranteed market. The RFS instructs the U.S. Environmental Protection Agency to decide on a minimum volume of renewable fuels to be included in the nation's fossil fuel supply every year. The volumes, called Renewable Volume Obligations (RVO), change based on government agency predictions of fuel usage. The renewables take four forms: Conventional biofuel (also called renewable fuel in EPA parlance); biomass-based diesel; "other advanced biofuel;" and cellulosic biofuel.