Les Jones

Environment > "Undoing America's Ethanol Mistake"

A U.S. Senator is calling for a freeze in ethanol subsidies rather than continuing on the present course of expanding them through 2022.

On December 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 in 2012 to 36 billion gallons 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 percent of America’s corn crop was diverted to produce ethanol. In 2008, that number will grow to 30-35 percent, 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 soybean 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.

Hat tip to DRK at Patterico.com.