Grain Bins


SDCGA thanks Herseth Sandlin in questioning BIG OIL

Posted on April 03, 2008

U.S. Rep. Stephanie Herseth Sandlin put the five “big oil” companies in the hot seat this week, taking the backs of South Dakota corn producers and the biofuels industry. The South Dakota Corn Growers Association (SDCGA) applauds Herseth Sandlin for her perseverance in pushing for answers from the oil industry.

Herseth Sandlin personally questioned the heads of Exxon Mobil Corp, Shell Oil, BP America, Chevron and ConocoPhillips as part of a hearing for the Select Committee on Energy Independence and Global Warming.

In her opening statement and her time questioning the witnesses, Herseth Sandlin focused on the companies’ business practices and attitudes towards renewable biofuels like ethanol and biodiesel. In particular, she asked the company heads to justify their position that fuel blends with higher than 10% ethanol, like E20, would have adverse effects on the price of food. Additionally, she asked if the companies were undertaking initiatives to increase the availability of E85.

Herseth Sandlin revealed a glaring inconsistency in how oil companies are federally subsidized even in times when they are making record profits, while the agricultural industry’s assistance is inversely related to prices received for their commodity. Herseth Sandlin cited a story in the Wall Street Journal that said that gasoline costs would be about 15% higher without biofuels.

The oil company representatives were pressed to explain why they should continue to get billions of dollars in tax breaks when they made $123 billion last year and motorists are paying record gasoline prices at the pump.

“It’s about time that the oil industry is asked the tough questions about the prices we’re all paying at the pump for gasoline,” said Bill Chase, president of the SDCGA. “As corn producers and suppliers of feedstock for ethanol, we know our product is actually helping to hold fuel prices – and in return food prices – lower than they would be without blending ethanol into our nation’s fuel supply. Based on studies by independent economists, we know our portion of increased food costs is minimal and energy prices, fueled by gasoline, are responsible for two times the increases in our nation’s food costs compared to corn prices.”

To view the video of Herseth Sandlin’s comments and questions during the hearing, go to

For more information about corn’s role in food prices, visit the SDCGA website at and click on “Kernels of Truth.”

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