Originally posted by share.banoosh.com on August 19, 2012
The policy, ostensibly aimed at reducing the country’s dependence on foreign oil and at improving the environment, has been a bonanza for farmers.
Land planted with corn soared by a fourth after Congress passed the Energy Independence and Security Act of 2007, which required that gasoline producers blend 15 billion gallons of ethanol into the nation’s gasoline supply by 2015.
With this year’s crop expected to be the smallest in six years, corn prices have jumped 60 percent since June. The ethanol requirements are aggravating the rise in food costs and spreading it to the price of gasoline, which is up almost 40 cents a gallon since the start of July.
Researchers at Texas A&M University have estimated that diverting corn to make ethanol forces Americans to pay $40 billion a year in higher food prices. On top of that, it costs taxpayers $1.78 in subsidies for each gallon of gasoline that corn-based ethanol replaces, according to the Congressional Budget Office.
More than 150 House members and 25 U.S. senators, as well as the director general of the United Nations Food and Agricultural Organization, have asked Obama to temporarily suspend the ethanol mandate in order to check the rise in food prices. He should listen to them, and Congress should permanently roll back the ethanol requirements.
This isn’t to say ethanol doesn’t have a place in the U.S. energy mix. Gasoline needs to be combined with agents that carry oxygen to help cars and trucks run more efficiently. Ethanol fits the bill. But the government should let the demand for ethanol obey the laws of the market, rather than the desires of the agricultural lobby. Huffington Post
FACTS & FIGURES
Corn stalks are being disked under as the extensive drought in the corn belt causes concern over the United States government’s ethanol mandate. brainerddispatch.com
This year gasoline refiners will use some 13.2 billion gallons of ethanol, which will consume some 40 percent of the corn crop. CNBC
According to a Financial Times opinion piece published on August 10, U.N. Food and Agriculture Organization Director General had said Washington should shelve a mandate siphoning 40 percent of the U.S. corn crop for ethanol and use the corn for food and feed. UPI
The U.S. Environmental Protection Administration mandate, known as the Renewable Fuel Standard, requires 13.2 billion gallons of biofuel to be blended into gasoline by 2012 to cut greenhouse-gas emissions and U.S. foreign-oil dependence. UPI