Ethanol-related House bills continue to stir debate
Two House bills that aim to alter the ethanol mandate have yet to go before the full chamber, but that's not stopping the debate over ethanol from continuing to churn.
by Chris Woodward
May 10, 2013
Source: One News Now
The bipartisan legislation to alter the ethanol mandate is sponsored by Congressman Bob Goodlatte (R-Virginia) and has the backing of livestock and industry groups. His legislation aims to do away with the Renewable Fuel Standard (RFS) and cap the amount of ethanol that can be blended into conventional gasoline at 10 percent.
"The federal government's creation of an artificial market for the ethanol industry has quite frankly triggered a domino effect that it hurting American consumers, energy producers, livestock producers, food manufacturers, and retailers," Goodlatte stated when he introduced the two bills in early April.
But Tom Buis, CEO of Growth Energy, believes ethanol has helped reduce imports of foreign oil. "We're ten percent of our nation's gasoline supply right now. So we've had significant reductions," he states. "If you look just a few years ago, our country was importing about 60 percent of our liquid petroleum needs; today that's down to around 40 percent."
Bob Dinneen, president and CEO of the Renewable Fuels Association, has made similar comments to American Family News.
However, Sterling Burnett, senior fellow for the nonprofit, nonpartisan National Center for Policy Analysis, does not see it that way.
"We have reduced our dependence on foreign oil considerably, but that has nothing whatsoever to do with the Renewable Fuel Standard," he argues. "It has everything to do with the new fracking technologies that have improved our oil production in the U.S. and a significant recession that we went through where our energy use declined. That's why we are no longer importing as much oil as we used to."
Burnett adds that a study by the National Center found that displacing only five percent of the U.S. demand for gasoline and diesel with ethanol would require more than 20 percent of U.S. cropland.
Are we putting food in our fuel tanks?
It's one of the ongoing arguments with ethanol - in particular, corn-ethanol - but is its usage tantamount to putting food in fuel tanks? And is that driving up food costs?
Greg Krissek, director of government affairs at ICM, Inc. and interim-executive director of the Urban Air Initiative, says ethanol does not mean putting food in fuel.
"Because of the presence of the ethanol industry, we are providing significant more amounts of food, primarily through animal feed, to the livestock producers," Krissek says. "About one-third of the bushel becomes the actual ethanol, and one third remains as a high-protein feed with less starch in it, which is actually better for the animals."
Even so, livestock producers and industry groups claim corn-ethanol is driving up food prices, something Pam Johnson on the National Corn Growers Association disputes, telling Agri-Pulse even though some sectors of the nation's food supply have seen increases, prices in many other sectors that rely on corn - including milk, turkey, and pork - have fallen.
But that isn't stopping livestock producers and industry groups from backing Representative Goodlatte's legislation.
So - which side is right? The National Center's Sterling Burnett suggests: "I say you trust the industries that are affected by it. I haven't followed turkey prices, but pork prices have gone down because we're getting more and more of our pork from China overseas."
Is the ethanol industry creating jobs?
Growth Energy's Tom Buis says the ethanol industry is creating more than 400,000 jobs at home that cannot be outsourced. "You have the direct jobs at the plants, but you also have a lot of indirect jobs in the transportation sector, in the farming industry, in the equipment manufacturing and the distribution, the retailing and all those sectors," he argues.
In March, the New York Times published an article titled "Days of Promise Fade for Ethanol." The writers pointed out that nearly ten percent of the nation's ethanol plants have stopped production over the past year, in part because the drought that has ravaged much of the nation's crops pushed commodity prices so high that ethanol has become too expensive to produce.
Bius disputes that article, adding that a bigger part of the idling is due to the industry having more capacity to produce than it is allowed to consume in the marketplace.
But NCPA's Sterling Burnett questions whether jobs in the ethanol industry would just as easily be jobs in another industry.
"Would they be in the oil and gas fields?" he wonders. "Would they be working in computer programming and engineering? Would they be farming other crops? - because a lot of these jobs are just moving from one crop to the other crop."
Both the RFS Flexibility Act (HR 3097) and the RFS Elimination Act (HR 3098) are currently in committee in the House.