04.15.09

Wesley Clark's Folly

In getting behind the ethanol lobby, the former NATO supreme commander is doing a supreme disservice to the environment, the auto industry and his country.

In getting behind the ethanol lobby, the former NATO supreme commander is doing a supreme disservice to the environment, the auto industry, and his country.

Back in 1951, during a speech to Congress, General Douglas MacArthur famously declared that "old soldiers never die, they just fade away." Alas, if only if only that were true for General Wesley Clark, who continues to haunt American voters and consumers. His latest job: carrying water for the corn-ethanol producers.

Clark, a retired four-star general, graduated first in his class at West Point. He served as Supreme Allied Commander of NATO. In 2004, he ran for president as a Democrat but quit the race after racking up a single primary win: Oklahoma.

“I’ve never seen the Sierra Club, the Competitive Enterprise Institute and the oil industry on same page in my life,” says Frank O’Donnell, president of Washington-based Clear Air Watch.

Today, Clark has decided that rather than leverage his post-military career on something honorable—such as pitchman for the ThighMaster Gold or maybe the Ronco Vegematic—he’s leading the push to increase the size and influence of one of the biggest rip-offs in modern American history: the corn-ethanol scam. In February, Growth Energy, an upstart group that claims that more corn-ethanol production will help the U.S. economy “through cleaner, greener energy,” announced that Clark will serve as its co-chairman. In its press release, the group trumpeted the fact that Clark is “one of the most highly decorated military leaders since General Dwight D. Eisenhower” and “will help America take an important step closer to becoming energy independent.”

Clark can make a living however he likes. But by joining forces with the corn growers and corn-ethanol producers, Clark has thrown in with an industry that is collectively crapping in its combines.

Indeed, the entire corn-ethanol sector is teetering on the edge of insolvency and doing so at the very same time that an ever-increasing number of reports are showing that the grain-based fuel is harming the environment and costing U.S. consumers dearly. While brazenly denying any problems at all, the corn-ethanol producers are nevertheless pushing federal regulators to change the rules so that consumers could be forced to buy even more ethanol.

Consider these recent developments:

—According to Ethanol Producer Magazine, 37 ethanol distilleries—representing about 18% of total U.S. production capacity—are now sitting idle due to excess capacity.

—Over the last few months, more than half a dozen ethanol producers have gone bankrupt. The latest casualty: Illinois-based Aventine Renewable Energy Holdings, which filed for Chapter 11 last week.

—In January, Toyota announced that it was recalling 214,570 Lexus vehicles. The reason for the recall: The company found that “ethanol fuels with a low moisture content will corrode the internal surface of the fuel rails.”

—Over the last two years, at least 16 studies have found a direct connection between corn-ethanol production and higher food prices. That shouldn’t be surprising. Last year, the ethanol industry gobbled down about one-third of the U.S. corn crop, about 4.1 billion bushels.

—Last week, the Congressional Budget Office concluded that increased use of corn for ethanol production accounted for 10 to 15% of the surge in food prices that occurred between April 2007 and April 2008. That rise in food costs, said the agency, “will boost federal spending for the Supplemental Nutrition Assistance Program (SNAP, formerly the Food Stamp program) and child nutrition programs by an estimated $600 million to $900 million in fiscal year 2009.”

—On April 2, an international team of 75 scientists from 21 countries released a report which determined that “the water requirements of biofuel-derived energy are 70 to 400 times larger than other energy sources such as fossil fuels, wind, or solar.”

Despite all of this, Clark is leading Growth Energy’s push to persuade the Environmental Protection Agency to increase the amount of ethanol blended into gasoline from 10% to 15%. Clark is pushing the plan even though fewer than 10 million of the 250 million motor vehicles in the U.S. have been built to handle fuel blends containing more than 10% ethanol.

In industry parlance, the ethanol producers are hitting the "blend wall." That is, they have way too much capacity and motorists aren't buying enough gasoline to absorb all the ethanol they are producing. That leaves them with two options: Close more distilleries or force more ethanol into motorists’ fuel tanks. And that’s where Growth Energy’s rent-a-general strategy comes in. His job is to help an industry that isn’t profitable—despite years of huge subsidies and mandates—get yet more subsidies and mandates.

But Clark is facing enormous resistance. On March 26, a letter from one of the oddest coalitions in modern American history was sent to Energy Secretary Steven Chu, Agriculture Secretary Thomas Vilsack, EPA Administrator Lisa Jackson, and President Obama’s adviser on climate change, Carol Browner. The coalition advised that it “opposes any administrative or legislative efforts to increase the current cap on the amount of ethanol permitted to be blended into gasoline” until “comprehensive testing programs” have been done.

The signatories included the Sierra Club, National Petrochemical and Refiners Association, Competitive Enterprise Institute, Grocery Manufacturers Association, Friends of the Earth, and the Association of International Automobile Manufacturers. “I’ve never seen the Sierra Club, the Competitive Enterprise Institute, and the oil industry on same page in my life,” says Frank O’Donnell, president of Washington-based Clear Air Watch.

O’Donnell’s right. The mix of groups opposing Clark sounds like the beginning of a joke—a rabbi, a priest, and an imam walk into a bar…. Unfortunately for American taxpayers and motorists, the expansion of the ethanol scam being pushed by Clark is not a joke. As I said at the beginning, if only he would fade away.

Robert Bryce has written for numerous publications ranging from The Atlantic Monthly to The Guardian and The Nation to The American Conservative. His first book, Pipe Dreams: Greed, Ego, and the Death of Enron, was named one of the best nonfiction books of 2002 by Publishers Weekly. His latest book, Gusher of Lies: The Dangerous Delusions of “Energy Independence,” was published in 2008 by PublicAffairs.