EDITORIAL: Biofuel Mandate Worsens Drought's Effect
July 24, 2012
Washington's ethanol mandate is hitting Americans in the breadbasket. The worst drought in a half-century is withering cornfields across the heartland while Uncle Sam stubbornly insists American corn be turned into billions of gallons of this unnecessary fuel additive. The result is higher food prices in an already struggling economy. Unless the government can make it rain, Congress should uproot the ethanol mandate.
Hot and dry conditions across the Midwest have placed 70 percent of the corn belt in extreme drought and 61 percent of the nation in at least moderate drought, according to the Drought Monitor, a report compiled by federal climatologists. Only about 31 percent of the nation's corn crop is in good or excellent condition, and 38 percent of it is in poor or very poor condition. As a result, the U.S. Department of Agriculture last week lowered its forecast of the nation's corn yield by 12 percent, pushing up the wholesale price of corn to a record $8.16 per bushel.
Fuel refiners are required to blend 13.2 billion gallons of corn alcohol into their petroleum-based fuels this year or face fines, thanks to the Energy Independence and Security Act of 2007, which included ethanol in its Renewable Fuel Standard. The rule, administered by the Environmental Protection Agency under the Clean Air Act, wins the wholehearted support of politicians with presidential ambition seeking Midwestern votes.
The ethanol requirement forces fuel refiners to buy nearly 40 percent of the corn harvest to meet their mandates, meaning fewer bushels are available for animal feed and human consumption. Surplus harvests have minimized the competition between fuel and food, but the current drought has revealed that trying to control agriculture with diktats from Washington has unintended consequences: Corn for cars can mean costly food for families.
Agriculture Secretary Thomas J. Vilsack warned Wednesday that more expensive animal feed would lead to higher meat prices for American shoppers, adding, "If I had a rain prayer or rain dance I could do, I would do it." With corn an ingredient in products throughout grocery stores, commodities experts are predicting food price increases of 4 percent to 5 percent next year.
Renewable-fuel mandates have produced other prize gaffes. Fuel refineries must adulterate their fuel with cellulosic ethanol, made from waste vegetation. It's impossible to produce meaningful quantities of the stuff, so companies are forced to pay millions in fines as a result.
Congressional Republicans want to do something about the unintended consequences of agricultural market manipulation. The Senate version of the farm bill contains $800 million for renewable energy over five years, while the House version eliminates most of the subsidies. Additionally, Rep. Jeff Duncan of South Carolina has introduced the Energy Exploration and Production to Achieve National Demand Act, which would expand domestic oil production and terminate the ethanol requirement.
Praying to the heavens for rain is fine, but lawmakers should cure Uncle Sam of playing god by ending his rule over King Corn and banishing the ethanol mandate.
Source: The WashingtonTimes
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