US Proposes to Double Energy From Grain Ethanol

US - The US House of Representatives has passed its energy bill that, if enacted into law, will double the Renewable Fuel Standard (RFS) from the current 7.5 billion gallons per year to a 15 billion gallon grain ethanol mandate.
calendar icon 10 December 2007
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The American Meat Institute (AMI) called the passage of the bill counter-productive. It says it will drive up food prices further as more corn is diverted from animal feed to fuel generation

“We support efforts to increase US energy security, but this bill takes a myopic approach by mandating grain-based ethanol increasing demand for corn even further than the record levels we’ve seen in the last 12 months,” said AMI President Patrick Boyle. “The net effect of this bill will be to increase the cost of meat and poultry to consumers.”

According to United States Department of Agriculture (USDA), meat, poultry and egg spending comprise 60 percent of the average consumer’s food dollar.

Boyle said there are many other common sense approaches that could be taken to enhance energy security without using food for fuel. An option to limit consequences on food security and livestock producers is to develop a clear mechanism to reduce the mandate in the case of projected food price increases, adverse weather conditions, harm to livestock producers, infrastructure bottlenecks, or other adverse consequences.

Boyle also said that a 15 billion RFS for grain based fuels is far too high, adding that all interests impacted by the ethanol mandate should have the opportunity to request a waiver.

Opposing view

However, US National Farmers Union says the bill will create economic opportunities for rural America - allowing family farms to continue to play a significant role in our country’s energy future. The NFU says it supports several of its priorities, including an expanded Renewable Fuels Standard (RFS), a new Renewable Electricity Standard (RES) and extensions of renewable tax incentives such as the production tax credit (PTC) for wind.

“An expanded RFS will continue the success of the current standard by increasing ethanol production and providing more opportunities for farmers, ranchers and the communities in which they live,” said NFU President Tom Buis. “The new RES builds upon the success of the RFS and will generate record investments in new clean energy facilities in mostly rural areas.”

NFU has been a long-time advocate for creation and expansion of a national RFS. It says that the establishment of ethanol plants increases local economic activities, generates additional household income and creates as many as 650 new, permanent jobs per community. And, because of public policies that encourage local ownership, ethanol production is the only sector in agriculture that has seen a reduced level of concentration.

“America’s farmers and ranchers are ready, willing and able to be part of our nation’s energy solution and reduce our reliance on foreign oil.” Buis said. “I strongly urge the Senate to act quickly on the energy bill so that a final version can be sent to the President for his signature yet this year.”
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