The U.S. ethanol industry’s efforts to win public support for putting more corn-based fuel in gasoline has run into a fierce, unmovable enemy. Horrible weather. A withering Midwestern drought has reignited the debate over “food versus fuel” as soaring corn prices — which the Department of Agriculture says will cause as much as a 4 percent spike in retail food prices next year — become ammunition for livestock as proof that federal biofuels mandates have failed.
When you pay $1 for groceries at the supermarket—out of that $1 only about 12-14 cents goes to the farmers that produced the commodities that went into the foods that you buy. About 35 cents goes to pay for energy to make, transport, process, and preserve the products. If the price of oil goes up—so will the price of the food you buy—-and about 3X faster than it will if the price of the base commodities increases. ALL foods—not just some. We need to make more ethanol, not less ethanol. We wil have lower prices for food if we replace petroleum with ethanol. What should we make ethanol from? All of the above. And other things as well. The more and differing sources we have in producing ethanol, the greater our flexibility can be in the event of changing conditions, like droughts, floods or anything else that changes market dynamics.
At least one of four states hoping to ease requirements on adding grain-based ethanol to gasoline is expected to petition the federal government as soon as Monday as the worst drought in 50 years spikes corn prices and lowers profits for livestock producers. Governors from states that may petition the Environmental Protection Agency to waive the mandate known as the Renewable Fuel Standard, or RFS, include Republicans Nikki Haley of South Carolina, Dave Heineman of Nebraska, Rick Perry of Texas and Democrat Mike Beebe of Arkansas, an ethanol industry source said.
An analysis indicates that the fuel efficiency of vehicles purchased by consumers in the United States set a new record in the first half of this year. It attributed the shift to automakers’ offering a wider variety of models with good fuel performance, and to shoppers’ reacting to higher gasoline prices by choosing smaller models. The study was conducted for the Natural Resources Defense Council, an environmental group that favors stricter gas mileage standards.
Waiving the federal biofuels mandate won’t significantly ease skyrocketing corn prices, according to a study released today by an Iowa State University economist. Bruce Babcock, the director of Iowa State’s Center for Agricultural and Rural Development, said waiving the renewable fuel standard would reduce corn prices by less than 5 percent. With corn prices currently above $8 a bushel, he said, the reduction will fail to provide relief to livestock industries that have demanded the government reduce or repeal the mandate
An oil industry trade group has filed another lawsuit challenging U.S. EPA’s yearly requirements for cellulosic biofuel under the renewable fuel standard. In the suit filed yesterday in the U.S. Court of Appeals for the District of Columbia Circuit, the American Petroleum Institute alleges that EPA set requirements last year mandating that oil refiners blend nonexistent cellulosic biofuels into the nation’s fuel supply. It comes after EPA denied a petition to waive the requirements for last year.
Ethanol futures fell for a fifth day on speculation that weaker gasoline demand will slow consumption of the biofuel. Futures fell as gasoline demand over the four weeks ended July 20 was 3.1 percent below a year earlier, according to Energy Department data released today. Demand, which was 8.66 million barrels a day last week, has been below 9 million in 27 of 29 weeks this year.
Oil companies have never liked the federal Renewable Fuels Standard, but they have a special ire for the requirement for the use of non-corn, cellulosic ethanol that is virtually nonexistent. The American Petroleum Institute, which represents the largest oil companies, filed a lawsuit with the D.C. Circuit Court late Tuesday challenging the Environmental Protection Agency’s mandated use of cellulosic biofuels in the 2011 Renewable Fuel Standard (RFS).
The Senate’s top tax writer emerged from a closed-door session last night “very encouraged” that lawmakers would be able to agree on a package to extend a variety of temporary tax breaks that expired last year or are set to do so this year, although the contents of such a package and timing to get it to the floor remain in flux.
While many people consider mpg ratings when buying a car, about 15 percent of the cars on the market actually have their mileage verified by U.S. EPA regulators. The fuel economy tests are performed at one lock-and-key facility in Ann Arbor, Mich.