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Texas Governor Calls Ethanol Mandate “Misguided”
by
findingDulcinea Staff
Rising food prices in Texas have led the state’s governor to seek a waiver on meeting federal standards for ethanol production.
30-Second Summary
Texas Governor Rick Perry (R) asked the Environmental Protection Agency (EPA) for a partial waiver on the Renewable Fuel Standard, which requires a blend of 7.8% ethanol in all gasoline. Perry believes the measure will cause food prices to drop.
The Renewable Fuel Standard of 2005 was conceived to combat rising fuel prices and reduce America’s dependence on foreign oil. In December of 2007, the Energy Independence and Security Act increased ethanol production goals to 7.5 billion gallons by 2012.
Governor Perry said, "We appreciate the good intentions behind the push for renewable fuels ... but this misguided mandate is significantly affecting Texans’ family food bill."
Evidence from a Texas A&M study published in April contradicts the governor’s claim saying, “Relaxing the RFS does not result in significantly lower corn prices.”
The Texas Farm Bureau agreed, pointing to oil prices at more than $115 a barrel as the source of the high food prices. It stated, “Distribution, manufacturing and packaging costs—escalated by the price of oil—play a much bigger role in rising food costs than the price of corn.”
World food prices have increased by 45 percent in the last nine months, leading to shortages and riots in Egypt, Haiti and elsewhere.
The Tanzanian president is one of many around the world who have claimed that biofuels production has caused of a food shortage and “a problem of high prices.” India and poor nations in Africa have called on the West to stop diverting so many crops to biofuels.
The Renewable Fuel Standard of 2005 was conceived to combat rising fuel prices and reduce America’s dependence on foreign oil. In December of 2007, the Energy Independence and Security Act increased ethanol production goals to 7.5 billion gallons by 2012.
Governor Perry said, "We appreciate the good intentions behind the push for renewable fuels ... but this misguided mandate is significantly affecting Texans’ family food bill."
Evidence from a Texas A&M study published in April contradicts the governor’s claim saying, “Relaxing the RFS does not result in significantly lower corn prices.”
The Texas Farm Bureau agreed, pointing to oil prices at more than $115 a barrel as the source of the high food prices. It stated, “Distribution, manufacturing and packaging costs—escalated by the price of oil—play a much bigger role in rising food costs than the price of corn.”
World food prices have increased by 45 percent in the last nine months, leading to shortages and riots in Egypt, Haiti and elsewhere.
The Tanzanian president is one of many around the world who have claimed that biofuels production has caused of a food shortage and “a problem of high prices.” India and poor nations in Africa have called on the West to stop diverting so many crops to biofuels.
Headline Links: Texas governor argues for waiver of ethanol mandate
Texas Governor Rick Perry (R) asked the Environmental Protection Agency (EPA) for a partial waiver of the Renewable Fuel Standard, which requires a blend of 7.8% ethanol in all gasoline. Perry believes the measure will cause food prices to drop. His proposal has its critics, however. The Renewable Fuels Association argues the waiver would increase gas prices by cutting 4.5 billion gallons of fuel.
Source: MarketWatch
The Independent Cattlemen's Association of Texas, the Texas Pork Producers Association and the Texas Poultry Federation back Governor Perry’s proposal to cut ethanol production in half. The Texas Farm Bureau does not.
Source: The Houston Chronicle
A report by Texas A&M, found here as a 40-page PDF document, cites higher energy costs as the underlying cause rising food prices.
Source: Agriculture and Food Policy Center, Texas A&M [PDF]
Historical Context: The renewable-fuel standards
In 2005 the Senate voted to double the production of ethanol in response to environmental concerns, the war in Iraq and America’s dependence on foreign oil. Even at this early stage, the oil industry protested that using ethanol for fuel would increase food prices.
Source: The Washington Post
Background: Responding to price increases
In 2007, the Food and Agriculture Organization of the United Nations noted that biofuel production could drive up world food prices as demands in agricultural markets changed.
Source: Food and Agriculture Organization of the United Nations
Since prices have spiked, officials are studying the potential connections between food and fuel prices more closely. In France, reports that higher food prices may be connected to biofuels have prompted the country to consider second-generation biofuels, which are made from plant waste rather than grain and vegetable oil.
Source: findingDulcinea
In response to the increasing expense of staple foodstuffs, some developing countries are resorting to price restrictions and import regulations.
Source: findingDulcinea
Opinions & Analysis: Food vs. fuel
‘You can’t eat ethanol’
An editorial in The Dallas Morning News laments the transition to renewable energies like corn-based ethanol: “The problem, for now, is that science and technology have yet to catch up, so commercially viable U.S. ethanol must come from corn. And that puts your gas tank in competition with your kids’ bellies for an increasingly valuable resource.”
Source: The Dallas Morning News
‘Corn Growers Oppose Texas Ethanol Request’
“If granted, the waiver request made by Gov. Perry today will hurt, not help, U.S. consumers by increasing fuel costs and sending a signal to farmers to plant less grain,” said National Corn Growers Association (NCGA) President Ron Litterer. The article cites an Iowa State University study that claims the surge in ethanol production has reduced gas prices by about $0.29 to $0.40 per gallon.
Source: DomesticFuel
Related: Rising food prices worldwide
India and nations in Africa have called on the West to stop diverting so many crops to biofuels. Tanzanian President Jakaya Mrisho Kikwete claims that biofuel production has caused of a food shortage and “a problem of high prices.” The issue has spurred riots in several countries, including Egypt, Burkina Faso and Cameroon.
Source: National Post
Price increases for food have been steep and swift, according to the Australian Broadcasting Corporation. The problems will only get worse if not adequately addressed, said John Holmes of the United Nations. “This is not just, I think, a sort of quick blip in prices which will return to normal shortly."
Source: ABC News (Australian Broadcasting Corporation)
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