March 7, 2011
BY Susanne Retka Schill
One of the bigger new players in the ethanol industry came out against ethanol subsidies this week. Writing in the Wall Street Journal, Koch Industries CEO Charles Koch said, “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 is behind Flint Hill Resources which bought Hawkeye’s four ethanol plants in Iowa—the two at Menlo and Shell Rock last fall and two this spring at Iowa Falls and Fairbank. The total capacity of about 450 MMgy puts Flint Hills in the middle of the top 10 ethanol producers.
Koch prefaced the above comment with a bit of explanation: “Because every other company in a given industry is accepting market-distorting programs, Koch companies have had little option but to do so as well, simply to remain competitive and help sustain our 50,000 U.S.-based jobs. However, even when such policies benefit us, we only support the policies that enhance true economic freedom. For example, because of government mandates, our refining business is essentially obligated to be in the ethanol business.”
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The Koch family is well known for its conservative stance, and reportedly played a big role in the last election cycle. Will its stance on ethanol subsidies be received with a yawn, or will it give added ammunition to those stridently opposing ethanol?
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