More State Governors are demanding that the EPA stop the ethanol mandate, at least until corn crops recover.........probably not until next year. Even the United Nations is putting pressure on Obama to stop the ethanol. The US has in past years been a major corn exporter, which is essential to feed poor countries. With the large crop loss this year, unless the ethanol mandate is stopped, there is real concern there will again be food riots across the World, and even possibly in the U.S.
"Pete"
============================================================
EPA is pressured to drop ethanol mandate while drought drives corn prices up
By Doug McKelway
Published August 16, 2012
FoxNews.com
With record drought destroying crops across the country, corn prices are skyrocketing, and that is causing a world-wide ripple effect, including on the cost of the corn-derived gasoline additive ethanol.
Corn prices are up 60 percent this summer, Christopher Hurt, a Purdue University economic professor, estimates. And now Democratic governors from Maryland, Delaware, North Carolina and Arkansas have joined ranchers, poultry farmers and the United Nations director-general for food and agriculture in asking the Environmental Protection Agency to waive the federal requirement that gasoline contain 10 percent ethanol.
"It's universally acknowledged that ethanol is raising the price of food," Kenneth Green of the American Enterprise Institute said. "It's not lowering the price of gas. In fact, it may be raising the price of gas, and it's having a devastating environmental effect in terms of coastal pollution."
Green says coastal "dead zones" may be increasing because of the run-off from fertilizer-intensive corn crops. But the human economic costs are potentially more severe.
The Department of Agriculture estimates that food inflation will hit 3 percent to 3.5 percent this year, then 3 percent to 4 percent next year. The U.S. is the world's largest food exporter. For the poorest countries dependent on U.S. exports of corn, the impact may cost lives.
The Obama administration, however, hasn't acted to waive the ethanol mandate.
"What I can tell you is that the EPA has made it clear that they are working closely with the Department of Agriculture to keep an eye on yields," White House spokesman Jay Carney told reporters Friday. "They will evaluate all the relevant information when assessing that situation."
More recently, when asked about the president's commitment to ethanol, Deputy White House Communications Director Jen Psaki said, "He absolutely believes in it. He thinks it's a driver of the economy here and a key component of renewable energy."
Indeed, ethanol mandates have won favor in the corn belt -- where corn prices and profits have set records in recent years. As evidence of that, more corn now goes to the production of ethanol than to the production of food and cattle and poultry feed. Many of those same corn belt states, including Iowa, Ohio, and Michigan, happen to be key swing states in the upcoming presidential election.
Even if there were political will to challenge the mandates, the ethanol industry has now become an entrenched player in Washington.
"Once it's entrenched, you have a locked-in lobby that won't let you pry it out," Green said. "No matter that your environmental groups have walked away from it, international groups have walked away from it. Everybody has acknowledged it's bad public policy, but it's dug in like a tick."
