Andrew Langer

Oil is the lifeblood of the American Economy. From the cars we drive to the plastics that went into the keyboard I’m banging on right now, we have relied on, rely on, and will continue to rely on oil and oil-based products as a key component of our economic strength. Oil’s role in the economy has become increasingly clear as the Unites States wrestles with mixed economic signals—and unless we get a handle on the supply of that oil, and other economic tinkering will be an exercise in futility.

This is especially true for America’s small businesses. Ninety percent of America’s businesses have fewer than twenty employees, and American small businesses provide nearly seventy percent of all new jobs. These businesses are especially hard-hit by rising oil costs—they have the worst of all possible worlds. They cannot negotiate like big businesses for lower fuel and supply costs, and they cannot change their behavior like individuals to deal with the shock of high prices.

According to the National Federation of Independent Business, small businesses want three things when it comes to energy: low prices, reliability of supply, and stability of prices.

But recent actions by Senator Charles Grassley (R-IA) have impacted all three of these fronts, creating, in effect, a double-whammy.

First off is Sen. Grassley’s continued support of corn-based ethanol programs. Renewable, growable fuels might be the wave of the future, but in the here and now they are creating more problems than they are solving—especially when it comes to fuels derived from food sources. Corn-based ethanol is difficult and costly to manufacture, requiring vast amounts of crop-land to produce enough corn to meet artificially-inflated demand, while at the same time it is needlessly driving up food prices both in the United States and abroad.

While efficient algae-based biofuel programs might be cost-efficient, they are years away from the marketplace, and Sen. Grassley’s fetish for corn-fuels will delay that delivery even more.

At the same time, Sen. Grassley has voted to punish American oil companies for maximizing shareholder profits – as though it were the oil companies’ fault that Congress has punted its responsibility for crafting a sound energy policy. The oil companies aren’t driving up the speculative market for oil, the lack of drilling and refining in the Unites States is. And the continued push for renewable only exacerbates that speculation, as ever time someone mutters the possibility that the age of drilling is over, it sends the futures markets into a frenzy.

The nasty truth is, Iowa’s corn farmers aren’t being helped by this either. There’s only so much biodiesel out there to fuel their equipment, and they need real, from-the-ground-sourced diesel to make up that tremendous difference. They’re like all other small business owners, essentially held hostage by congressmen like Sen. Grassley, who talk about skyrocketing gas and diesel prices but seem unwilling to do anything meaningful about it.

People talk about fantastic solutions to the energy crisis, fanciful technologies that will allow us to take fuel directly out of the ground and put it into our vehicles to make them run.

But we already have that fantastic solution, that amazing substance which we can take out of the ground, simply refine it, and then put it in our cars to make them go. It’s called oil. There’s plenty of it, there’s plenty of it here, and we’ve got plenty of space to transform it into a usable fuel. We simply need to go and get it and then refine it right here.

It’s time for Sen. Grassley to stop squeezing American small business for the sake of Iowa’s corn growers. While Texas and Oklahoma and Alaska and Florida and The Dakotas will get great benefits from the increased jobs that will come from increased drilling and refining, Iowa’s corn growers will benefit too. They’ll get high-quality diesel fuel at an affordable price whose stability they can count on. And that reality is worth far more than any ethanol-fueled fantasy.


Andrew Langer

Andrew Langer is President of the Institute for Liberty, an organization that works to ensure that America stays both exceptional and strong.