Biofuels Fight Back in Blame Game

Biofuels Fight Back in Blame Game

Unrest in Egypt paired with higher corn prices has again fueled the flames in the food vs. fuel fight

Gasoline prices at the pump are averaging over $3.50 a gallon with continued concerns over Middle East oil supplies. Protesters cry of higher food prices. Here at home, ethanol groups are attempting to set the record straight on the role ethanol has on food prices while informing the public of the advantages of decreased dependence on foreign oil supplies.

According to Growth Energy, many are trying to attempt to link wheat prices in the Middle East with demand for corn starch for ethanol in U.S. ethanol production - ignoring the following facts:

A highly-desired livestock feed, "dried distillers grains," or DDGs, are a co-product of the production of ethanol, which only removes the starch but leaves the protein, oil and fibers of the corn kernel to go into the food chain as DDGs.

Each pound of DDGs can replace 1.25 pounds of field corn as livestock feed.

The European Union commission a report last month that found that wild swings in the cost of major commodities - such as wheat - are caused by speculators and the derivatives market. No mention of biofuels or ethanol was made in the EU's findings.

A peer-reviewed paper published by the journal Energy concluded there is no sustainable link between food prices and biofuels production.

The U.S. consumes 25% of global oil production but ethanol demands only 3% of global grain supply, according to some studies.

The United States is on track to continue meeting all export demand for livestock feed - as well as meet all domestic demand for feed, food and fuel - and still have surplus corn in storage this year.

On March 7 and 8, a handful of ethanol representatives met in New York with the Wall Street Journal and Fox News in an effort to educate the two news outlets on the benefits of biofuels. The meetings were intended to both defend ethanol against misconceptions including the food vs. fuel issue, and promote ethanol in light of current high oil prices.

Tough fight

Political support may be waning for ethanol on Capitol Hill. In February the House overwhelmingly supported amendments to strip funding for E15 implementation and for blender pumps. The Senate has yet to take up the budget cuts, which came under the continuing resolution which funds the government until the next fiscal year.

A coalition of 90 business associations, taxpayer advocates, hunger and development organizations, ag groups, free-market groups, religious organizations, environmental groups, budget hawks, and public interest organizations sent a letter to Congressional leadership urging Congress to let the Volumetric Ethanol Excise Tax Credit (VEETC) expire and to resist calls for spending on infrastructure for conventional biofuels. Last year Growth Energy proposed to transition funds away from the ethanol tax credit and into infrastructure.

Growth Energy CEO Tom Buis said in a speech March 3 at Growth Energy's Executive Leadership Conference that as oil prices rise to 29-month highs and gas prices jumped double-digit gains overnight, it is time to wake up.

"We are witnessing an economic stampede that is hurting every American family. Think about this - every 1 cent hike in the price of gasoline costs the American consumers an additional $4 million a day. In the past month, gas prices have increased 25 cents costing Americans $100 million a day.

"How many times must we hit the snooze button before our nation begins to seriously reduce our addiction to foreign oil," he asked.

As President Obama and other federal leaders consider whether to sell off a portion of the U.S. strategic oil reserves, Buis suggested lifting the barriers that prevent more homegrown ethanol from entering the U.S. fuels market.

"Simply allowing the U.S. Environmental Protection Agency to implement its approval of our Green Jobs Waiver for E15 would do for the long-term what a one-time sell off of oil reserves would do in the short-term: ease gasoline prices for everyday Americans, not just for today, but for tomorrow and later as well. Every day, the foreign oil we import is getting costlier, riskier and dirtier to extract," Buis said in a March 8 statement.

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