Ethanol blamed for soaring food costs
Ethanol blamed for soaring food costs Save Email Print
Posted: 11:53 PM May 6, 2008
Last Updated: 11:53 PM May 6, 2008
Reporter: Associated Press

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Just months ago, ethanol was the Holy Grail to energy independence and a "green fuel" that would help nudge the country away from climate-changing fossil energy.
Democrats and Republicans cheered its benefits as Congress directed a fivefold increase in ethanol use as a motor fuel. President Bush called it key to his strategy to cut gasoline use by 20 percent by 2010.
But now with skyrocketing food costs -- even U.S. senators are complaining about seeing shocking prices at the supermarket -- and hunger spreading across the globe, some lawmakers are wondering if they made a mistake.
"Our enthusiasm for corn ethanol deserves a second look. That's all I'm saying, a second look," said Rep. Jane Harman, D-Calif., at a House hearing Tuesday where the impact of ethanol on soaring food costs was given a wide airing.
In a dramatic reversal, ethanol has shifted from being an object of widespread, bipartisan praise to one of derision, even among some of its past supporters.
Despite the change in attitude, a change of course is unlikely. Democratic leaders in Congress appear to have little interest in reversing a pro-ethanol policy they mapped out only last December. And the powerful farm lobby is on the attack.
"The ink has hardly dried on this new law when the clamoring began ... for congressional intervention" on food prices, Rep. John Dingell, D-Mich., chairman of the Energy and Commerce Committee, said Tuesday. But tampering with the mandate "would be unwise and could lead to unintended consequences," he concluded.
Sen. Charles Grassley, R-Iowa, one of the Senate's two working farmers and a longtime ethanol booster, said he finds it hard to believe that ethanol could be "clobbered the way it's being clobbered right now" over the issue of food costs. What does the cost of corn have to do with the price of wheat or rice, he is telling people.
The uproar over ethanol is clearly gaining momentum.
The governor of Texas and 26 senators, including the GOP's presumptive presidential nominee John McCain, are asking the Environmental Protection Agency to cut this year's requirement for 9 billion gallons of corn ethanol in half to ease, they say, food costs. Connecticut's governor recently asked Congress to temporarily waive the requirement.
Meanwhile, Sen. John Thune, R-S.D., is gathering senators' signatures on a letter opposing any EPA action so "this attack on ethanol will be blocked," said a statement from Thune's office. "It will be a fight."
Robert Meyers, an EPA deputy assistant administrator, told a House hearing Tuesday the agency will respond to the request as quickly as possible, but doubts anything will be forthcoming for about three months. There's a regulatory process to follow, he said.
But lawmakers, even those who enthusiastically supported the requirement for refiners to ramp up ethanol use to 36 billion gallons a year by 2022 from about 7 billion gallons last year, have begun to have qualms.
"Corn ethanol was presented as an almost Holy Grail solution," said Rep. Mike Doyle, D-Pa. "But I believe its negatives today far outweigh its benefits. ... We need to revisit this ... and back away from the food to fuel policy."
Rep. Joe Barton of Texas, the ranking Republican on the House Energy and Commerce Committee, said he will introduce a bill to abandon the ethanol requirement passed just before last Christmas and go back to the one Congress enacted in 2005 that would call for a more modest ethanol increase.
But Barton is not so naive to think his bill has a chance. House Democratic leaders have given no indication of retreating from the ethanol requirement. Still, said Barton, "it's worth putting in."
And congressional unease about the food-for-fuel debate is showing itself in a number of places.
In a massive farm bill -- for the first time in memory -- lawmakers recently trimmed back the federal tax subsidy for corn ethanol, reducing the tax break from 51 cents to 45 cents a gallon.
At the same time, however, lawmakers reiterated their support for making ethanol production from cellulosic feedstocks -- wood chips, switchgrass and even garbage -- commercially viable. The same farm bill provides $400 million for cellulosic ethanol research and development.
And the rush of hearings into the food-to-fuel issue show no sign of subsiding. The hearing on Tuesday by an Energy and Commerce subcommittee vied for attention with another hearing into the soaring cost of diesel fuel. The Senate's Homeland Security and Government Affairs Committee has scheduled another hearing on food and fuel on Wednesday.
Will anything come of it?
"Nothing," says Rep. John Shimkus, R-Ill., during a break in Tuesday's session.
Shimkus, whose state has one of the biggest ethanol producers in Archer Daniels Midland Co., supports the mandate and sees heavy reliance on corn as a feedstock only temporary. "It's a bridge (to) cellulosic ethanol and we can't jettison the present and not get to the future," he says.
Bob Dineen, president of the Renewable Fuel Association, which represents the ethanol industry, says the issue is about getting away from using oil, an argument that resonated with lawmakers and convinced them to mandate the increased ethanol production.
His argument is twofold: It's a myth that corn-based ethanol is causing today's high food prices and that because ethanol is cheaper than gasoline, it's cutting the costs for consumers at the pump.
If ethanol production were cut in half this year, as EPA is being asked to do, insists Dineen, gasoline prices could increase by nearly a third because of supply disruptions and the higher cost of replacement gasoline.
"It's difficult for me to conceive that they will back away from something they passed just five months ago," says Dineen.
(Copyright 2008 by The Associated Press. All Rights Reserved.)

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Posted by: frank on May 8, 2008 at 06:55 AM
by 2022.does that mean we will suffer high gas prices,ungodly food prices and the economy will get worse.look what gas prices are doing to people.how high will fuel prices to heat with be in the comming winters.people in northern states should get discounts in high amounts,we pay both gases.many should just move to warmer states to avoid heating prices??the gov is aware of the problems oil prices and gas prices are causing many.it is like as long as the rich make it,others can just suffer.they throw a few checks at us and say spend the money.the gov at the white house that owns oil drilling land,gov land,get more from that oil than all the stimulas checks they are sending out,in just one yr.plus all the interest they get off our trillions of dollars in taxes they collect each yr.so the gov isn't straining there pocket books one bit.how many will buy gas?food?and only nessary things?and taxes on money spent goes right back to the gov?it will not save the economy.nor help in many ways.

Posted by: connie Location: jackson on May 8, 2008 at 06:21 AM
will simi drivers continue to use the fuel they do now or will they hhvae to buy new trucks that use new fuel?would not that cost them alot of extra money.then we hear about new cars that will use the new fuel.will we be forced to buy them?the way things are going how can alot of people buy cars?we are forced to pay high prices for food as it is now.so many things are going up.the people have no say about any prices.same way how we must buy from made in china,we don't make alot of things in america any more.the fuel prices are hurting the economy so bad.I don't think the new fuel thing is going to be so great in the long term thing.but then again the way the oil thing is going in other countries they'd prefere to put us in a deal where we can't get it without paying ungodly prices.that has alot to do with why we are in wars with the ones we are.if certain ones could stop flow through the purssian gulf many would be hurting.if exxon can make billions in profits there's greed not lack of.

Posted by: Anonymous on May 7, 2008 at 05:33 PM
gas prices have hurt people to the point houses arebn't selling,companies can No longer give raises in wages.cars are not being bought.many are not spending in many areas,so stores are hurting.food prices are as bad as gas prices.farmers well they just can't affors,but yet for years the american gov paid them NOT to plant crops.ethnol.look at the later on effects this will have on the land,food prices,and maybe the rich ones making all these choices,have no clue about alot of things because they don't know what poor is.think they never will be either.are they low waged paid ones,or farmers,or anyone who is experianced in what really matters.NO.saying they might of jumped the gun or made a mistake.pride before the fall.they can't admit that,to many already got invested.they don't want friends to know it was a unthought idea.when the land can't grow anything then what?we won't have oil if other countries stop shipment.we are in a mess.do what we ask?progress or stupidity?or greed.

Posted by: tim Location: holt on May 7, 2008 at 06:54 AM
take a relook to see if they are pushing things to much?to produce the ethnol in amounts they want they will be growing only corn.what about other foods american farmers grow?the foods we do need.what about all the corn we send to other countries.should not we say no more?how many truckers run ethnol products in trucks to transport?they don't.have not the prices they pay to drive products all over also raised food prices?yes.other wise there'd be no reason for food prices going up so high.how long before they just stop transporting?food prices are causing many problems for the averaged waged people in america.so many people have already stoped buying many things.hurting the economy more.we are seeing a no win deal.2 major problems bring up food prices.how long can we grow corn on the land,yr after yr before the land is so striped it won't grow anything?then ethnol will become so high in price.it will never be so cheap it don't hurt our paychecks just like gas is now.we best wake up.

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