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The Role of EPA within the centralization process of the Ethanol Sector
in the USA
What will the paper be about?
The paper will focus on the role of the Environmental Protection Agency (EPA) in
context with the developments on the Ethanol Sector after the Financial Crisis of 2008.
In the forefront of the analysis of the role of EPA, an explorative verification of this
process must be undertaken. It is another assumption that because of the crisis the
actors’ landscape of the ethanol sector has changed. With financial investor offside the
energy business a new sort of players have emerged in the ethanol sector. The paper
will take a look on that development to explore what those new investors contribute to
discourse concerning the “subjection of Nature under neoliberal logics”.
1
The centralization of the Ethanol Sector
This chapter provides the basic element of the paper. Due an quantitative analysis of
data concerning the number of actors and their production quantities it tries so identify
a trend that could indicate a centralization. Within the paper centralization implies a
reduction of farmers, refineries (producers) and other local investors. Smaller refineries
went bankrupt or were sold to bigger companies.1 Farmers that relied on contracts with
those refineries faced significant income losses as the remaining refineries refused full
payment.2
Another crucial point in that context will be the look if other big investment companies
like Investment Funds invested in the ethanol sector.
Financialization of Nature due the financial crisis of 2008
This term takes over the assumption that big investors from the financial markets
bought old refineries or invested somehow in the production of ethanol. This goes hand
in hand with the Financialization Theory”. This theory argues that investors use crisis
moments for new profitable investments. The financial crisis of 2008 is such a moment.
During the crisis investments within the ethanol sector became significantly cheap. With
the prospect of state subsidies due the Clean Energy Act of 2005 and the dependency on
foreign oil the ethanol sector seems to provide stable conditions and profits for future
investments. Additionally investments in “clean energy” provide a “green” label
Investors. This green label is concern of a discussion about the “subjection of Nature
under neoliberal logics”. Within this discourse the main argument goes is about the
exploitation of Nature under capitalistic conditions. This implies production methods
which are in most cases not in the consumers understanding of sustainable. The
assumption within this theory is that investors use those “green” or “bio” labeled
products to hide traditional non‐green production methods.
This chapter therefore tries to reveal if the financial crisis lead to further incorporations
of Nature in order to gain higher profits in financial markets.
1 Many refineries had to close down, as their futures market contracts with farmers led to massive
losses.
2 A good example is the fall‐down of VeraSun in 2009: (cp. Gillan 2010, 731.).
2
The Role of EPA
Based on my current knowledge of EPA this part will be the final analysis of the paper.
Based on the assumption that the centralization is occurring and that big investors are
investing in the ethanol sector the role of EPA becomes important.
First of all it is important to pinpoint relevant actors within EPA. The second step is to
determine if EPA is an active or passive participant within the Ethanol sector. An active
participant can independently influence developments within the ethanol sector. If EPA
applies to a passive participant that would mean that it only follows orders by the
Government and controls compliance of the other actors involved.
If EPA is not only a subordinate organization, another important question will focus on
relations between EPA and other actors of the ethanol sector. In this context it is
important to identify power balances between the actors. A question in that context
could be if EPA supported the centralization or not. This can be realized by looking if
regulations were set in favor of big investors or smaller farmers and refineries.3
As this part of the paper depends on various other factors that still need to be verified,
the contents of this chapter can and certainly will still develop.
3 The relation between farmers, refineries and investors additionally opens the question if within the
ethanol sector a new class conflict is emerging.
3