Turning food into fuel makes little sense

Drought reduced the corn crop to the point where 42 percent of the harvest will be turned into ethanol instead of used to feed poultry and livestock.


The renewable fuels law, passed in 2005 and greatly expanded in 2007, was a mistake at the time and has now created such a bloated industry that it may be "too big to fail."

The idea of finding ways to create renewable fuel sources has some merit. But instead of letting market forces dictate what that would be and when, a requirement that 13.2 billion gallons of ethanol be produced this year, 15 billion gallons by 2015 and 36 billion gallons by 2022 was jammed down the public's throats.

To reach these mandates, the biotechnology industry collected billions from private investors and hired at least 400,000 workers, according to a press release from the Biotechnology Industry Organization, which represents more than 1,100 biotechnology companies and other related groups.

It was certainly a windfall to these companies and to corn farmers.

What Congress and the bureaucrats at the Environmental Protection Agency didn't take into account is that Mother Nature can put a kink in the best laid plans. This year's drought cut corn production to an estimated 10.7 billion bushels, the smallest in six years, according Bloomberg News. To hit the targets, 42 percent of the entire harvest will be turned into ethanol.

Eight governors -- four Democrats and four Republicans -- petitioned EPA to waive the requirements so more of the crop could be used to feed livestock to help prevent driving food prices higher. The EPA in its wisdom -- now that's an oxymoron -- said that while it was given the power to suspend the mandate if it would severely harm the economy of a state, region or the United States, it didn't see any problem. In EPA's view, there has to be "severe harm" and it isn't enough that the standard just contributes to the harm.

"We are extremely frustrated and discouraged that EPA chose to ignore the clear economic argument from tens of thousands of family farmers and livestock and poultry producers that the food-to-fuel policy is causing and will cause severe harm to regions in which those farmers and producers operate," the coalition of eight governors wrote.

While Texas and Arizona were not included in this coalition, Arizona Sen. John McCain and Texas Gov. Rich Perry in 2008 asked the Bush administration to waive the mandate because of drought. They were turned down. A spokesman for Perry said last week's decision is "another punch in the gut" for states' agricultural economies.

So consumers can do little as they watch food prices rise while ranchers and farmers cope with less feed for their animals. And because of the expense to produce and add ethanol to gasoline, prices at the pump certain won't be going down. So consumers lose twice.

The real rub is that with the rising popularity of hybrid and electric cars, the need for ethanol to stretch gasoline supplies -- which was dubious at best even in 2005 -- has been rendered moot.


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