Your Turn: South Dakota ethanol policy genius

Source: By Orrie Swayze, Sioux Falls Argus Leader • Posted: Monday, April 2, 2018

Sen. Kent Frerichs looked to further capitalize on the genius of our incredibly successful ethanol policy taxing imported petroleum one cent/gallon at the pipeline to fund incentives to build a strong South Dakota ethanol industry. His Senate Bill 210 used $1 million of those remaining funds to build S.D. blender pump infrastructure, surprisingly was defeated in committee. It would have enabled all S.D. auto owners to save another 30 cents/gallon by purchasing basically volatility neutral E30’s 94 octane, more power, lower maintenance costs and same mileage, safer premium E30. Along with 20 cents/gallon saved purchasing E10 vs. ethanol free regular, the grand total at today’s prices would be 50 cents/gallon. Or, potential $150 million saved annually by S.D. auto owners based on 300 mg annual road taxed gasoline use. The good news is promising discussions continue.

Genius ethanol policy, considering it was created in 1984, at a low point when the S.D. economy was referred to as “buffalo commons.” Imported oil pricing had complete charge of S.D.’s agricultural economy and the oil embargo was fresh on everyone’s mind. Farm economies were especially at the mercy of imported oil prices and agriculture had no plan to relieve its predicament of ever lower grain vs. imported oil prices, ever increasing interest rates and declining land values.

Revolutionary change started when House Minority Leader Frerichs asked me to invite and bring S.D. native Dave Hallberg, founder and CEO of the Renewable Fuels Association, to Pierre to testify before a legislative committee set to abandon ethanol incentives. Dave’s testimony shocked all, as he offered S.D. can build a huge S.D. ethanol industry, whose benefits to S.D. are only limited by the sky and all we had to do was restrict current ethanol incentives to S.D. produced ethanol.

Intrigued with the possibilities, the committee set in motion process to form a legislative summer study committee to write such a law. Gov. Bill Janklow was the citizen most intrigued with the possibilities, that he called me at home early after the legislative session and invited me to Pierre to discuss what Hallberg had told the committee. He knew Hallberg was then Rep. Tom Daschle’s ethanol consultant and recognized his credibility.

Interestingly, he then invited me to his office before nearly every summer study committee meeting, because he wanted to know what Hallberg was going to say in his regular telephone conversations with the committee before very meeting. Jim Myers, DOT head, was also always in the office ranting ethanol evils as he did at every committee meeting. Janklow was a fair referee, as I aggressively offered reality type comments.

All this a miracle? When I left Janklow’s office the first time, he said, “You and your crowd make your case to me and I will be with you.” He was with us all along, but enthusiastically made sure our proposed one cent pipeline tax detail was vigorously vetted. He ruled all unused dollars go back to DOT, preventing petroleum consumer dollars being diverted to unrelated projects. One passage, young 20-year-old Jeff Broin was first to take notice and purchased the bankrupt Scotland plant, to famously lead the explosion building the Midwest’s many 40-100mg dry mill ethanol plants. Production that lowered gasoline and diesel prices many times over for those paying the penny/gallon pipeline tax. Collateral benefits are billions added to the S.D. economy.

The pipeline tax can do it again when reinstated, to also expand current plant production and include funding to educate citizens about ethanol’s engine performance benefits. All is possible when S.D. corn recognizes the folly of abandoning the founding board’s position to join other corn boards, governors, Growth Energy, Ace, Fuels Association, EPA, etc. Together, they say “it’s illegal to fuel standard autos with E30,” creating the perceived ethanol blend wall that plunders rural America’s assets today. S.D. corn can lead, by again being the enlightened, credible lone corn voice asserting a daily provable reality that will crush this perceived blend wall. “Standard auto owners have an unenumerated Ninth Amendment protected self-evident constitutional right to choose safer E30, because ethanol doesn’t produce and its added oxygen aggressively combusts gasoline’s toxic emissions identical to those found in cigarette smoke.” Case closed.

Orrie Swayze, 74, is a farmer living near Wilmot. He is a member of the S.D. VFW, VVA and founding vice/president of S.D. Corn Growers and Utilization Council, and chairman of S.D. Farmers Union Ethanol Action Team.