One of the best examples of the Koch brothers’ self-interest is their longstanding, heavily-funded opposition to the Renewable Fuel Standard. While the RFS is good for Iowa’s economy and the environment, the Kochs oppose it because it threatens their own oil profits.
Today, as Hillary Clinton announces her support for strengthening the RFS, will Republicans do what’s right for Iowa and support the RFS or will they listen to the Kochs in hopes they get a piece of the $900 million the brothers are planning to spend on this election?
Earlier this year, Bridge Project’s report, “The Importance of Buying Ernst: Why The Kochs Go Wilde Lobbying the Hawkeye State,” outlined just how far the Kochs have gone to end the RFS — despite overwhelming support from Iowans.
From the report:
KOCH HAS LOBBIED AGAINST THE RENEWABLE FUEL STANDARD AND BIODIESEL FUEL STANDARDS TO PROTECT THEIR OIL INTERESTS IN IOWA
Koch Lobbyists Opposed Iowa Bill To Increase Amount Of Biodiesel That Could Be Blended In Diesel Fuel Sold At The Pump. According to the Des Moines Register, “So what does Koch Industries want from Iowa lawmakers in return for its donations? Apparently not much, if lobbyist disclosure reports on file with the Iowa General Assembly are any indication. Legislators feel the influence of the company and its foundations in other ways, however. For the 2011 legislative session, which ended June 30, the company’s three Iowa lobbyists declared an interest in just three of the 1,241 bills introduced in the House or Senate. […] They opposed a proposal to raise to 5 percent the amount of biodiesel that could be blended in diesel fuel sold at retail outlets. […] None of the three bills made it out of committee.” [Des Moines Register, 7/31/11] 26
Since 2006, Koch Companies Public Sector & Flint Hills Resources Lobbied On At Least 37 Bills Related To Ethanol, Biodiesel And Other Renewable Fuels. According to Iowa state lobbyist declarations, Koch Companies Public Sector and Flint Hills Resources lobbied on at least 37 bills related to the Renewable Fuel Standard and biodiesel fuels. According to lobbyist declarations, they lobbied against 12 bills and listed their stance as “undecided” on 25 bills. [Iowa Lobbyist Declarations, 2006-2014, accessed 8/7/14]
- Koch Industries And Flint Hills Lobbied Against Bills That Would Modify Renewable Fuel Standards And Provide Tax Credits To Retailers Who Sold The Renewable Fuels. According to Iowa state lobbyist declarations, Koch Industries’ and Flint Hills’ lobbyists lobbied against bills that would have modified the Renewable Fuel Standard and would have provided tax credits to retailers who sold the renewable fuels. Among these bills was Senate File (SF) 2359 in the 83rd General Assembly, which would have “[created] a new requirement that a retail dealer cannot advertise, sell, or dispense gasoline other than ethanol blended gasoline which is either standard ethanol blended gasoline or so-called E=85 gasoline. Gasoline which does not contain the requisite 35 percentage of ethanol is referred to as ‘nonblended gasoline’. The bill also creates a new designation for high ethanol blended gasoline which is E=11 or higher.” [Senate File 2359, 83rd General Assembly, accessed 9/19/14]
- Koch Industries & Flint Hills Lobbied Against Bills That Would Have Required Diesel Fuels To Contain At Least 5 Percent Biodiesel. According to the Iowa Legislature, among the bills that Koch Industries lobbied against was Senate File (SF) 464 in the 83rd General Assembly, which required that “a retail dealer shall not advertise for sale or sell diesel fuel in this state, unless it is biodiesel fuel designated as B=5 or higher.” B=5 fuel is diesel fuel that contains, by definition, at least 5 percent biodiesel. [Senate File 464, 83rd General Assembly, accessed 9/19/14]
- Flint Hills Resources Lobbied Against Bills That Contained Provisions Providing Gasoline Tax Credits To Retail Dealers Who Sold Gasoline With 85 Percent Ethanol And Drivers Who Used E=85 Gasoline. According to the Iowa Legislature, among the bills that Flint Hills lobbied against was Senate File 2385 in the 81st General Assembly, which instructed that “the department of natural resources… is authorized to award demonstration grants to persons who purchase vehicles which operate on alternative fuels, including but not limited to, E=85 gasoline, compressed natural gas, electricity, solar energy, or hydrogen. A grant shall be for the purpose of conducting research connected with the fuel or the vehicle, and not for the purchase of the vehicle itself.” The bill also provided tax credits to retail dealers “who [own] or [operates] at least one service station at which E=85 gasoline is sold and dispensed through a metered pump.” [Senate File 2385, 81st General Assembly, accessed 9/19/14]
AFP’s Opposition to Support for Ethanol and the Renewable Fuel Standard
Americans For Prosperity Official Said That “AFP Supports Efforts To Repeal The RFS Entirely. We Have Endorsed Legislation In Congress That Does So.” According to testimony from Christine Harbin Hanson, Federal Affairs Manager for Americans for Prosperity, during a public hearing by the Environmental Protection Agency, “On behalf of over 2 million AFP activists in all 50 states, I am pleased to have the opportunity to comment on the proposed rule for the 2014 Standards for the Renewable Fuel Standard (RFS) program. Let me state from the start that AFP supports efforts to repeal the RFS entirely.” [Christine Harbin Hanson – Environmental Protection Agency, Public Hearing Testimony, 12/5/13]
Americans For Prosperity Official Said That “AFP Strongly Supports Efforts To Permanently Eliminate The RFS.” According to testimony from Christine Harbin Hanson, Federal Affairs Manager for Americans for Prosperity, during a public hearing by the Environmental Protection Agency, “Given it’s numerous downsides, AFP strongly supports efforts to permanently eliminate the RFS.” [Christine Harbin Hanson – Environmental Protection Agency, Public Hearing Testimony, 12/5/13]
Koch Industries Lobbying Arm: “We Have Consistently Supported the Full Repeal of the RFS Mandate.” According to Koch Industries: “On behalf of Koch, I am writing to urge you to oppose the expansion of the Renewable Fuel Standard (RFS) mandate. The RFS mandate previously created by Congress distorts the markets and has resulted in higher costs to consumers. For these reasons, we have consistently supported the full repeal of this RFS mandate and other similar mandates, even when we may benefit from them.” [Letter from Koch Companies Public Sector to Members of Congress,6/6/2013]
AFP-Iowa Attacked The “Ethanol Lobby” And Criticized Renewable Fuel Standards As “Bad For All Other Businesses And American Consumers.” According to a press release from Americans for Prosperity – Iowa, “The ethanol lobby has been raising a ruckus lately, blaming ‘Big Oil’ for supposedly launching a smear campaign against the federal government’s Renewable Fuel Standard (RFS) that brings them so much business. Nothing could be further from the truth. The reality is that Americans are starting to wake up to the high costs that the RFS imposes on businesses and consumers alike, harming the American economy at the worst possible time. The RFS is a federal program that mandates energy producers to blend renewable fuels such as ethanol into every gallon of gasoline. The current standard calls for fuel makers to blend 10 percent ethanol into every gallon of fuel produced. However, the Environmental Protection Agency (EPA) is now increasing the mandate, encouraging producers to increase its blending of ethanol to 15 percent per gallon through its E15 program. While this federal encouragement may boost the ethanol lobby’s profits, it’s bad for all other businesses and American consumers.” [Americans For Prosperity – Iowa Press Release, 7/8/13]
AFP-Iowa: “The Playing Field Is Massively Tilted” In Favor Of “Big Ethanol.” According to a press release from Americans for Prosperity – Iowa, “Don’t believe Big Ethanol’s misinformation. Nobody’s out to get them. In fact, the playing field is massively tilted in their favor. The decision of when and how much ethanol should be blended with gas should be left up to companies and consumers in the market, not government bureaucrats.” [Americans For Prosperity – Iowa Press Release, 7/8/13]
KOCH INDUSTRIES AND CHARLES KOCH’S PERSONAL OPPOSITION TO ETHANOL SUBSIDIES
Koch Industries CEO Charles Koch Opposed Ethanol Subsidies. According to the Des Moines Register, “Charles Koch – the new owner of ethanol plants at Fairbank, Iowa Falls, Menlo, and Shell Rock – has come out against tax credits or other subsidies for biofuels. Koch’s position isn’t necessarily a surprise; the Koch family has long espoused conservative political positions. In an article in the Wall Street Journal last week, Koch, who is CEO of Koch Industries, wrote ‘because of government mandates, our refining business is essentially obligated to be in the ethanol business. We believe that ethanol – and every other product in the marketplace – should be required to compete on its own merits, without mandates, subsidies or protective tariffs. Such policies only increase the prices of those products, taxes and the cost of many other goods and services.’ Koch’s voice is new among Iowa ethanol producers. Koch’s Flint Hills Resources bought ethanol plants at Menlo and Shell Rock last September, and two more at Iowa Falls and Fairbank, from Hawkeye Energy of Ames.” [Des Moines Register, 3/6/11]
Charles Koch: Working Men And Women Are Hurt By Ethanol Policies. According to an op-ed by Charles Koch in the Wichita Eagle, “If we allow our government to waste scarce resources and become the ultimate decision maker, almost everyone will suffer a lower standard of living. For evidence, look at what ethanol policies have done to fuel and food prices. And who is hurt most by higher prices? Working men and women, and the less fortunate.” [Charles Koch -Wichita Eagle, 5/19/11]
Charles Koch: “Because Ethanol Use Is Mandated, We Were Compelled To Be In That Business.” According to an op-ed by Charles Koch in the Wichita Eagle, “For example, because ethanol use is mandated, we were compelled to be in that business, so we chose to be in it in the most competitive way we could. We still oppose ethanol subsidies and mandates, even though some of our businesses would benefit from them.” [Charles Koch -Wichita Eagle, 5/19/11]
The Kochs “Lobbied Congress On Ethanol And Other Biofuel Subsidies.” According to the Center for Public Integrity, “In Washington (where ethanol tax subsidies cost the Treasury some $6 billion annually) Koch representatives lobbied Congress on ethanol and other biofuel subsidies. ‘New or emerging markets, such as renewable fuels, are an opportunity for us to create value within the rules the government sets,’ Flint Hills Resources President Brad Razook told his employees in the January company newsletter.” [Center for Public Integrity, 8/6/11]
Discovery Newsletter: Flint Hills Resources Purchased Four Ethanol Plants In Iowa. According to Discovery Newsletter via Kochind.com, “Last August, Flint Hills Resources announced its plans to purchase two ethanol plants in Iowa. That transaction was completed less than a month later. Then, early this month, FHR announced plans to buy two more ethanol plants, also in Iowa. That transaction is expected to close this quarter.” [KochInd.com, January 2011]
2010: Flint Hills Resources Announces Plans To Acquire Two Iowa Ethanol Plants In Menlo And Shell Rock. According to a 2010 timeline in the January 2011 Discovery Newsletter via Kochind.com, “FHR announces plans to acquire two Iowa ethanol plants in Menlo and Shell Rock.” [KochInd.com, January 2011]
2010: Flint Hills Resources’ Mustang Ridge Terminal Opens. According to a 2010 timeline in the January 2011 Discovery Newsletter via Kochind.com, “FHR’s Mustang Ridge terminal opens.” [KochInd.com, January 2011]
Flint Hills President: “We Are Always Going To Oppose Government Policies We Believe Are Inconsistent With Liberty And Economic Freedom. But We Are Also Going To Abide By The Law, And Ethanol Is Required By Law.” According to Discovery Newsletter via Kochind.com, “Brad Razook, president of Flint Hills Resources, has answered plenty of questions from employees ever since the September purchase of the Iowa ethanol plants. His answers to those questions are usually simple and straightforward. ‘Because of government mandates, we believe ethanol will be part of the transportation fuels market for years to come. We also want to remain competitive,’ said Razook. ‘It’s really as simple as that.’ ‘We are always going to oppose government policies we believe are inconsistent with liberty and economic freedom. But we are also going to abide by the law, and ethanol is required by law.’” [KochInd.com, January 2011]