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Stop Fueling Corporate Welfare!


Senate Bill 2222 would force North Dakota’s farmers and other taxpayers to pay for ethanol subsidies to benefit large for-profit corporations and their investors. We do not believe this is right – and the more we looked into it, the worse it turned out to be. If you read our info and check out the links to the information we found, we believe you will agree – and vote NO on SB2222!


Ethanol subsidies rob:


- North Dakota taxpayers. Subsidies would cost us indefinitely up to $1,600,000 per year for the new plant or plants alone, with a total of up to $10 million per plant. SB2222  The plants being discussed in Jamestown and Richardton will probably receive separate and similar appropriations. The mandate to use ethanol in the state fleet will cost an ADDITIONAL $73,000 (70-some thou – check amount), and the taxpayers will be paying for this ethanol TWICE: once when it is subsidized, and again when the state BUYS it from the corporation – when the taxpayers paid for its production in the first place.


- Farmers. All farmers and ranchers would pay for the subsidy in the form of decreased fuel rebates, including those who do not grow corn. SB2222 This is unfair! And it comes at a time when farmers can’t afford it.


- Highways and motorists. Money for the ethanol corporations would be taken from the highway fund – the money we need to keep our roads safe and in decent repair. SB2222; William D. Fay, President, American Highway Users Alliance Vehicle registration fees were raised by $3 this year – supposedly for the highway fund – while money for ethanol is being taken FROM the highway fund. Every vehicle owner is being forced to contribute this additional money to corporate welfare. This will not stop.


- Workers of their jobs. Increased taxes cost more jobs in retail than ethanol manufacture creates. Program Evaluation Division, Office of the Legislative Auditor, Minnesota: “The sectors that gain employment directly from increased ethanol production are mostly manufacturing sectors. In general, these sectors are highly mechanized and levels of output per worker are high. Hence, a given change in output supports a relatively small number of jobs. In contrast, decreases in household spending due to the cost of ethanol programs affect workers mainly in the retail sectors, where output per worker is lower. Thus for a given transfer of income from households to the ethanol industry, more retail jobs are lost than there are jobs created in manufacturing.” People in Minnesota have THAT MUCH LESS to spend after being taxed for ethanol – so much less that it costs more retail jobs than are created in manufacturing!! If North Dakotans have to pay $10 million each for plants in Valley City, then those that are being discussed in Jamestown and Richardton, we will be impoverished just as badly as they are.


Who is getting it? Big corporations!


This tax money is being used to increase the profits of huge corporations. Archer Daniels Midland, a coprporate giant, is among the biggest contributors of “soft money” to both the Democrats and the Republicans – ensuring that they will get what they want, whoever is in power. That is why ethanol continues to be subsidized, when it benefits NO ONE but these corporations and their investors.




Ethanol subsidies also rob:


- America’s energy. It takes 71% more energy, most of it in the form of high-grade fossil fuels, to produce a gallon of ethanol than that gallon contains. There is a net loss of 53,600 BTU per gallon of ethanol produced. Study by David Pimental, Cornell University.


- Social Programs. Welfare given to huge corporations ultimately means less for families. The state has a budget shortfall and can’t afford both.


- The family farm. Ethanol greatly accelerates the trend away from “agriculture” towards “agribusiness” – instead of family farms producing food for people, we will have huge concerns growing corn for fuel.


- Our water. Each gallon of ethanol produces 160 gallons of waste water. Pimental, Cornell Univ.A plant the size of the proposed plant uses 750,000 to 1 million gallons a DAY.


- Our air. Ethanol plants emit formaldehyde and other carcinogens. People living two miles from a plant have difficulty breathing. News article from Minnesota


- People’s health. Hazardous emissions include methanol, acetic acid, and formaldehyde. Depletion of water by ethanol plants causes arsenic to leach into wells. "Water Rich Water Poor" from Wisconsin Public Television, which does an excellent job of presenting this issue


- The environment. The Sierra Club is suing for ethanol plant violations and is opposed to ethanol production and use. Ethanol additives in gasoline INCREASE smog, especially in summer. Recent statement by Sen Dianne Feinstien, CA. (and other sources) The state of California, along with the Clean Air Trust and other environmental groups, is suing the EPA to keep ethanol OUT because of its pollution. They will not buy our etahnol, as its boosters tell us.


Ethanol facts:


- It takes as much farmland to fuel one American car with ethanol for a year as to feed seven Americans for a year. US Dept of Agriculture Report


- To fuel America’s cars with ethanol would require about 2 billion acres of cropland: more than 5 times all the cropland that is actually and potentially available in the United States. David Pimental, Cornell University


- The total energy input to produce one gallon of ethanol is 129,000 BTU. However, one gallon of ethanol has an energy value of only 76,000 BTU: a net loss of 53,600 BTU. Pimental, Cornell U.


Archer Daniels Midland, a giant corporation that manufactures ethanol, is one of the largest contributors of “soft money” to both the Democratic and Republican parties – ensuring that whichever party is in power, ethanol will be subsidized. Oct 30, 2002 – had contributed over $1.1 mil to Dem, $2 mil to Repub.


- Using a blend of corn ethanol and gas in a car causes MORE pollution than gasoline alone. Not only are you burning energy to make ethanol, but ethanol makes gas more volatile, so when it is blended, more pollution is caused due to evaporation. This is supported by the work done at the EPA and by other scientific groups. The Natural Defense Council & the Clean Air Trust have joined California in suing the EPA over requiring ethanol.


- Ethanol plants do not create more jobs. MN concluded that the increased taxes to support ethanol subsidies cause more loss of jobs than those created by the ethanol plants. Program Evaluation Division, Office of the Legislative Auditor, Minnesota


- Ethanol plants have been releasing many times greater pollution into the air than previously reported. The ethanol industry will tell you the answer is to fit your plant with a thermal oxidizer - check out the news articles in St. Paul about the thermal oxidizer on the Gopher State plant. The St. Paul City Council recently voted to support closing down Gopher State.





Ethanol subsidy is “a cautionary tale about what happens to quote-unquote temporary subsidies. They never go away.” – Sen. John McCain (R-AZ)


The ethanol tax break is “highway robbery.” – Bill Archer (R-TX), Chairman, House Ways and Means Committee


“A program so bereft of public benefit as the ethanol subsidy exists only because is has powerful friends.” – Doug Bandow, The Politics of Plunder: Misgovernment in Washington


“If the principal argument for subsidizing ethanol is to boost farm income, it would be more economical to burn straight gasoline in our automobiles and pay corn growers a direct subsidy.” - USDA report


“Ethanol’s critics have been no match for the big money contributions and the contrivances of leaders of both political parties to keep corporate welfare flowing.” - Ann McBride, President, Common Cause


The ethanol tax break is “an egregious exemple of corporate welfare that should be allowed to die.” – Investors Business Daily


In addition to this, SB 2222 is UNCONSTITUTIONAL.


Article X, Sec. 18 of the ND state constitution reads: “…neither the state nor any political subdivision thereof shall otherwise loan or give its credit or make donations to or in aid of any individual, association or corporation except for reasonable support of the poor, nor subscribe to or become the owner of capital stock in any association or corporation."


Read more:


“Information Distortion and Competitive Remedies in Government Transfer Programs: The Case of Ethanol” by Dr. Ronald Johnson and Dr. Gary Libecap


“Archer Daniels Midland: A Case Study in Corporate Welfare,” by James Bovard, The Cato Institute