Government forced mandates continue to cause problems
It is now beyond dispute that congressional mandates on ethanol use are having a number of deleterious effects, soaring food prices chief among them.
So given that, plus recent findings that greenhouse gas emissions from ethanol and biofuels may actually be greater than those created by conventional gasoline, a natural question arises: Which presidential candidate will first call for a change in U.S. ethanol policy?
Yet hard facts show that ethanol mandates will do little to stem our oil import needs. Even if U.S. corn farmers and producers of advanced biofuels manage to meet the target set by Congress in the Energy Independence and Security Act of 2007 (36 billion gallons of biofuels per year by 2022), that quantity would equal only about 18 percent (by volume) of America's oil imports.
Meanwhile, the mandates are helping push food prices higher. Several factors are at work here, including a growing global demand for grain, the falling value of the dollar, higher energy costs and poor harvests. But there's no question that the ethanol mandates are a key factor in the rising price of food. And the consequences are troubling: Food costs have led to riots in several countries in recent months.
This month, the Coalition for Balanced Food and Fuel Policy, a group funded by domestic beef, pork and chicken producers, released a report estimating that ethanol mandates now cost U.S. taxpayers $33 billion per year. That figure—which includes the costs of the ethanol subsidies and higher food prices—amounts to about $106 for each American.
A year ago, the Center for Agricultural and Rural Development at Iowa State University determined that higher food costs resulting from ethanol mandates were costing each citizen about $47 per year.
Anti-ethanol forces are growing. On Friday, Texas Gov. Rick Perry, a Republican, requested a waiver from the federal ethanol rules, saying that the "misguided mandate is significantly affecting Texans' family food bill." A press release issued by his office declared that the corn ethanol sector was creating "artificial demand" for grain that "is devastating the livestock industry in Texas."
A World Bank report this month pointed at biofuels as a cause of higher prices, saying "almost all of the increase in global maize (corn) production from 2004 to 2007 (the period when grain prices rose sharply) went for biofuels production in the U.S., while existing stocks were depleted by an increase in global consumption for other uses."
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