Texan
Well-known member
I'm starting to wonder if this worldwide food 'crisis' might cause Congress to make some changes in their ethanol mandates. It won't take much pressure from the press and an angry electorate to get Congress to throw the corn farmer overboard - seed, fertilizer and all. Is it already starting?
=====================================
Undoing America's Ethanol Mistake
By SEN. KAY BAILEY HUTCHISON | Posted Friday, April 25, 2008 4:20 PM PT
The Nobel Prize-winning economist Milton Friedman once said, "One of the great mistakes is to judge policies and programs by their intentions rather than their results."
When Congress passed legislation to greatly expand America's commitment to biofuels, it intended to create energy independence and protect the environment.
But the results have been quite different. America remains equally dependent on foreign sources of energy, and new evidence suggests that ethanol is causing great harm to the environment.
In recent weeks, the correlation between government biofuel mandates and rapidly rising food prices has become undeniable. At a time when the U.S. economy is facing recession, Congress needs to reform its "food-to-fuel" policies and look at alternatives to strengthen energy security.
On Dec. 19, 2007, President Bush signed into law the Energy Independence and Security Act. This legislation had several positive features, including higher fuel standards for cars and greater investment in renewable energies such as solar power.
However, the bill required a huge spike in the biofuel production requirement, from 7.5 billion gallons in 2012 to 36 billion in 2022.
This was a well-intentioned measure, but it was also impractical. Nearly all our domestic corn and grain supply is needed to meet this mandate, robbing the world of one of its most important sources of food.
We are already seeing the ill effects of this measure. Last year, 25% of America's corn crop was diverted to produce ethanol. In 2008, that number will grow to 30%-35%, and it will soar even higher in the years to come.
Furthermore, the trend of farmers supplanting other grains with corn is decreasing the supply of numerous agricultural products. When the supply of those products goes down, the price inevitably goes up.
Subsequently, the cost of feeding farm and ranch animals increases and the cost is passed to consumers of beef, poultry and pork products.
Since February 2006, the price of corn, wheat and soybeans has increased by more than 240%. Rising food prices are hitting the pockets of lower-income Americans and people who live on fixed incomes.
While the blame for higher costs shouldn't rest exclusively with biofuels — drought and rising oil costs are contributing factors — the expansion of biofuels has been a major source of the problem.
The International Food Policy Research Institute estimates that biofuel production accounts for between one-quarter and one-third of the recent spike in global commodity prices.
For the first time in 30 years, food riots are breaking out in many parts of the globe, including major countries such as Mexico, Pakistan and Indonesia.
The fact that America's energy policies are creating global instability should concern the leaders of both political parties.
Restraining the dangerous effects of artificially inflated demand for ethanol should be an issue that unites both conservatives and progressives.
As a recent Time cover story pointed out, biofuel mandates increase greenhouse gasses and create incentives for global deforestation.
In the Amazon basin, huge swaths of forest are being cleared to meet the growing hunger for biofuels.
In addition, relief organizations are facing gaping shortfalls as the cost of food outpaces their ability to provide aid for the 800 million people who lack food security.
The recent food crisis does not mean we should entirely abandon biofuels.
The best way to lower energy prices, and reduce our dependence on foreign oil, is to accelerate production of all forms of domestic energy.
Expanding biofuels while refusing to take other measures, such as lifting the ban on oil and natural gas production in Alaska and the Outer Continental Shelf, is counterproductive. We should be tapping into a broad portfolio of energy options, including clean coal, nuclear power and wave energy.
The key is increasing energy supply. By taking these measures, we can enable biofuels to be part of the energy solution, instead of contributing to the energy problem.
Congress must take action. I am introducing legislation that will freeze the biofuel mandate at current levels, instead of steadily increasing it through 2022.
This is a common-sense measure that will reduce pressure on global food prices and restore balance to America's energy policy.
As the Senate debates this issue, we must remain focused on the facts.
At one point, expanding biofuels made sense for America's energy security. But the recent surge in food prices has forced us to adapt. The global demand for energy and food is expected to rise about 50% in the next 20 years, and the U.S. is well-positioned to be a leader in both areas.
That will require a careful, finely tuned approach to America's farm products.
By freezing the biofuel mandate at current levels, we will go a long way to achieving that goal.
Hutchison is a member of the Senate Republican leadership and the senior senator from Texas.
http://www.ibdeditorials.com/IBDArticles.aspx?id=294015465776712
==========================================
The Case for Ending Ethanol Subsidies
By Diana Furchtgott-Roth Tuesday, April 22, 2008
At a time of soaring food prices and concern over carbon emissions, George Bush needs to rethink his biofuel policy.
Just in time for today’s Earth Day festivities, President Bush has announced a new initiative to combat global warming. He set a goal of stopping the growth in greenhouse gas (GHG) emissions by 2025 and reducing emissions thereafter. But rather than plan for 2025—which is another two or three presidencies away—Bush should immediately fix his ethanol policy, which is increasing GHG emissions and raising food prices not only in the United States but all over the world.
American companies are still trying to digest the ethanol mandates passed by Congress last December. Congress mandated the production of 9 billion gallons of ethanol or other renewable fuels this year; that number will gradually increase until it reaches 36 billion gallons in 2022. In addition, ethanol producers receive a tax break of 51 cents a gallon, and corn growers receive huge subsidies that may increase in the next farm bill.
Using ethanol for energy was supposed to be a win-win situation: the United States has so much corn, we were told, that it could use some to make gasoline, thereby reducing its GHG emissions and also reducing its dependence on foreign oil. But in the real world, unintended consequences are all too frequent.
Take the linkage between ethanol and GHG emissions. Scientists now believe that the production of ethanol actually creates more harmful emissions than it prevents. Indeed, Princeton University professor Timothy Searchinger and other researchers have concluded that “corn-based ethanol, instead of producing a 20 percent savings, nearly doubles greenhouse emissions over 30 years and increases greenhouse gases for 167 years.” (Their findings were published earlier this year in Science magazine.) The reason is that converting undeveloped land to cropland—in order to grow more corn and facilitate biofuel production—releases a massive amount of carbon dioxide. Only if biofuels are made from waste products or grown on abandoned agricultural lands does the production process actually reduce GHG emissions.
This might suggest that there are ways of producing biofuels that do not lead to increases in greenhouses gases: just produce them out of waste material, without cutting down forests or plowing over fields. Yet Larry Kumins, vice president of the Energy Policy Research Foundation, has shown that the level of U.S. ethanol production in 2007—about 8 billion gallons, or 5 percent of the gasoline pool—is optimal. Producing 9 billion gallons this year will be difficult, and producing 36 billion gallons in 2022 will be impossible with today’s technology.
Here’s why: since ethanol separates from gasoline in the presence of water, the blends of ethanol and gasoline that many of us put in our cars can’t be transported through pipelines. Instead, ethanol is shipped by rail, at greater cost than gasoline, and mixed with gasoline near the point of distribution. That’s why the 10 percent ethanol-gasoline blends are not available all over the country, only in major metropolitan areas.
In addition, ethanol production is contributing to increases in the price of food, both in the United States and abroad. Not only is corn being made into ethanol, but other crops are being abandoned in favor of corn.
Last Wednesday, the Labor Department reported that in the first quarter of 2008 food prices rose at a seasonally adjusted annual rate of 5.1 percent, up from 4.8 percent in 2007 and 2.2 percent in 2006. Department of Agriculture data show that eggs increased by 29.2 percent last year, compared to 4.9 percent in 2006. Oil products are forecast to rise by 7 percent to 8 percent this year.
Rising food prices have been especially hard on developing countries. Haitian Prime Minister Jacques Edouard Alexis recently lost his job over food riots, and the government of the Philippines is releasing supplies of food in hopes of preventing similar disturbances. Indonesia has just banned exports of wheat, and global rice prices are hitting new records.
Yet President Bush still believes in ethanol. “We worked with Congress to pass energy legislation that specifies a new fuel economy standard of 35 miles per gallon by 2020, and requires fuel producers to supply at least 36 billion gallons of renewable fuel by 2022,” he said in his speech last week. “This should provide an incentive for shifting to a new generation of fuels like cellulosic ethanol that will reduce concerns about food prices and the environment.”
The problem is that the new generation of biofuels is not yet commercially viable. When it becomes viable, perhaps with the help of government-funded research, it will undoubtedly succeed without government mandates.
Rather than set a new goal for stabilizing GHG emissions, Congress and President Bush could do one simple thing that would truly honor of Earth Day: eliminate ethanol subsidies and get rid of the mandates.
Diana Furchtgott-Roth, former chief economist at the U.S. Department of Labor, is a senior fellow at the Hudson Institute and a weekly columnist for The New York Sun.
http://american.com/archive/2008/april-04-08/the-case-for-ending-ethanol-subsidies
=====================================
Undoing America's Ethanol Mistake
By SEN. KAY BAILEY HUTCHISON | Posted Friday, April 25, 2008 4:20 PM PT
The Nobel Prize-winning economist Milton Friedman once said, "One of the great mistakes is to judge policies and programs by their intentions rather than their results."
When Congress passed legislation to greatly expand America's commitment to biofuels, it intended to create energy independence and protect the environment.
But the results have been quite different. America remains equally dependent on foreign sources of energy, and new evidence suggests that ethanol is causing great harm to the environment.
In recent weeks, the correlation between government biofuel mandates and rapidly rising food prices has become undeniable. At a time when the U.S. economy is facing recession, Congress needs to reform its "food-to-fuel" policies and look at alternatives to strengthen energy security.
On Dec. 19, 2007, President Bush signed into law the Energy Independence and Security Act. This legislation had several positive features, including higher fuel standards for cars and greater investment in renewable energies such as solar power.
However, the bill required a huge spike in the biofuel production requirement, from 7.5 billion gallons in 2012 to 36 billion in 2022.
This was a well-intentioned measure, but it was also impractical. Nearly all our domestic corn and grain supply is needed to meet this mandate, robbing the world of one of its most important sources of food.
We are already seeing the ill effects of this measure. Last year, 25% of America's corn crop was diverted to produce ethanol. In 2008, that number will grow to 30%-35%, and it will soar even higher in the years to come.
Furthermore, the trend of farmers supplanting other grains with corn is decreasing the supply of numerous agricultural products. When the supply of those products goes down, the price inevitably goes up.
Subsequently, the cost of feeding farm and ranch animals increases and the cost is passed to consumers of beef, poultry and pork products.
Since February 2006, the price of corn, wheat and soybeans has increased by more than 240%. Rising food prices are hitting the pockets of lower-income Americans and people who live on fixed incomes.
While the blame for higher costs shouldn't rest exclusively with biofuels — drought and rising oil costs are contributing factors — the expansion of biofuels has been a major source of the problem.
The International Food Policy Research Institute estimates that biofuel production accounts for between one-quarter and one-third of the recent spike in global commodity prices.
For the first time in 30 years, food riots are breaking out in many parts of the globe, including major countries such as Mexico, Pakistan and Indonesia.
The fact that America's energy policies are creating global instability should concern the leaders of both political parties.
Restraining the dangerous effects of artificially inflated demand for ethanol should be an issue that unites both conservatives and progressives.
As a recent Time cover story pointed out, biofuel mandates increase greenhouse gasses and create incentives for global deforestation.
In the Amazon basin, huge swaths of forest are being cleared to meet the growing hunger for biofuels.
In addition, relief organizations are facing gaping shortfalls as the cost of food outpaces their ability to provide aid for the 800 million people who lack food security.
The recent food crisis does not mean we should entirely abandon biofuels.
The best way to lower energy prices, and reduce our dependence on foreign oil, is to accelerate production of all forms of domestic energy.
Expanding biofuels while refusing to take other measures, such as lifting the ban on oil and natural gas production in Alaska and the Outer Continental Shelf, is counterproductive. We should be tapping into a broad portfolio of energy options, including clean coal, nuclear power and wave energy.
The key is increasing energy supply. By taking these measures, we can enable biofuels to be part of the energy solution, instead of contributing to the energy problem.
Congress must take action. I am introducing legislation that will freeze the biofuel mandate at current levels, instead of steadily increasing it through 2022.
This is a common-sense measure that will reduce pressure on global food prices and restore balance to America's energy policy.
As the Senate debates this issue, we must remain focused on the facts.
At one point, expanding biofuels made sense for America's energy security. But the recent surge in food prices has forced us to adapt. The global demand for energy and food is expected to rise about 50% in the next 20 years, and the U.S. is well-positioned to be a leader in both areas.
That will require a careful, finely tuned approach to America's farm products.
By freezing the biofuel mandate at current levels, we will go a long way to achieving that goal.
Hutchison is a member of the Senate Republican leadership and the senior senator from Texas.
http://www.ibdeditorials.com/IBDArticles.aspx?id=294015465776712
==========================================
The Case for Ending Ethanol Subsidies
By Diana Furchtgott-Roth Tuesday, April 22, 2008
At a time of soaring food prices and concern over carbon emissions, George Bush needs to rethink his biofuel policy.
Just in time for today’s Earth Day festivities, President Bush has announced a new initiative to combat global warming. He set a goal of stopping the growth in greenhouse gas (GHG) emissions by 2025 and reducing emissions thereafter. But rather than plan for 2025—which is another two or three presidencies away—Bush should immediately fix his ethanol policy, which is increasing GHG emissions and raising food prices not only in the United States but all over the world.
American companies are still trying to digest the ethanol mandates passed by Congress last December. Congress mandated the production of 9 billion gallons of ethanol or other renewable fuels this year; that number will gradually increase until it reaches 36 billion gallons in 2022. In addition, ethanol producers receive a tax break of 51 cents a gallon, and corn growers receive huge subsidies that may increase in the next farm bill.
Using ethanol for energy was supposed to be a win-win situation: the United States has so much corn, we were told, that it could use some to make gasoline, thereby reducing its GHG emissions and also reducing its dependence on foreign oil. But in the real world, unintended consequences are all too frequent.
Take the linkage between ethanol and GHG emissions. Scientists now believe that the production of ethanol actually creates more harmful emissions than it prevents. Indeed, Princeton University professor Timothy Searchinger and other researchers have concluded that “corn-based ethanol, instead of producing a 20 percent savings, nearly doubles greenhouse emissions over 30 years and increases greenhouse gases for 167 years.” (Their findings were published earlier this year in Science magazine.) The reason is that converting undeveloped land to cropland—in order to grow more corn and facilitate biofuel production—releases a massive amount of carbon dioxide. Only if biofuels are made from waste products or grown on abandoned agricultural lands does the production process actually reduce GHG emissions.
This might suggest that there are ways of producing biofuels that do not lead to increases in greenhouses gases: just produce them out of waste material, without cutting down forests or plowing over fields. Yet Larry Kumins, vice president of the Energy Policy Research Foundation, has shown that the level of U.S. ethanol production in 2007—about 8 billion gallons, or 5 percent of the gasoline pool—is optimal. Producing 9 billion gallons this year will be difficult, and producing 36 billion gallons in 2022 will be impossible with today’s technology.
Here’s why: since ethanol separates from gasoline in the presence of water, the blends of ethanol and gasoline that many of us put in our cars can’t be transported through pipelines. Instead, ethanol is shipped by rail, at greater cost than gasoline, and mixed with gasoline near the point of distribution. That’s why the 10 percent ethanol-gasoline blends are not available all over the country, only in major metropolitan areas.
In addition, ethanol production is contributing to increases in the price of food, both in the United States and abroad. Not only is corn being made into ethanol, but other crops are being abandoned in favor of corn.
Last Wednesday, the Labor Department reported that in the first quarter of 2008 food prices rose at a seasonally adjusted annual rate of 5.1 percent, up from 4.8 percent in 2007 and 2.2 percent in 2006. Department of Agriculture data show that eggs increased by 29.2 percent last year, compared to 4.9 percent in 2006. Oil products are forecast to rise by 7 percent to 8 percent this year.
Rising food prices have been especially hard on developing countries. Haitian Prime Minister Jacques Edouard Alexis recently lost his job over food riots, and the government of the Philippines is releasing supplies of food in hopes of preventing similar disturbances. Indonesia has just banned exports of wheat, and global rice prices are hitting new records.
Yet President Bush still believes in ethanol. “We worked with Congress to pass energy legislation that specifies a new fuel economy standard of 35 miles per gallon by 2020, and requires fuel producers to supply at least 36 billion gallons of renewable fuel by 2022,” he said in his speech last week. “This should provide an incentive for shifting to a new generation of fuels like cellulosic ethanol that will reduce concerns about food prices and the environment.”
The problem is that the new generation of biofuels is not yet commercially viable. When it becomes viable, perhaps with the help of government-funded research, it will undoubtedly succeed without government mandates.
Rather than set a new goal for stabilizing GHG emissions, Congress and President Bush could do one simple thing that would truly honor of Earth Day: eliminate ethanol subsidies and get rid of the mandates.
Diana Furchtgott-Roth, former chief economist at the U.S. Department of Labor, is a senior fellow at the Hudson Institute and a weekly columnist for The New York Sun.
http://american.com/archive/2008/april-04-08/the-case-for-ending-ethanol-subsidies