By LAUREN ETTER
October 11, 2007; Page A8
The stalling ethanol industry wants Congress to mandate greater use of the biofuel. But many of the industry's former friends have turned against it amid soaring prices for corn and other grains.
Congress gave a big boost to ethanol in 2005, when it mandated that oil refiners blend 7.5 billion gallons of renewable fuels such as ethanol into the nation's gasoline supply by 2012. The farm lobby was united behind ethanol as a way to strengthen rural economies. Environmental groups backed it as a way to fight global warming and lessen the nation's dependence on foreign oil. Even the petroleum industry was supportive.
Since then, dozens of ethanol plants have sprouted around the country, turning corn into fuel. The rise of the industry has helped to boost grain prices and create jobs in farm states.
But ethanol production today is close to reaching the 7.5-billion-gallon level in the 2005 law. Oversupply has forced down prices and driven some ethanol producers into trouble. Producers and corn farmers are lobbying hard for Congress to boost the requirement anew to ensure that demand can soak up the rising production.
Opposition to the ethanol industry's goals has grown significantly stiffer. The so-called barnyard lobby -- representing the meat, livestock and poultry industries -- says high corn prices are hurting its profits. The price of corn-based animal feed has increased about 60% since 2005, according to the U.S. Department of Agriculture.
"Our single biggest priority is for Congress to reject a new renewable-fuels mandate," says Jesse Sevcik, vice president of legislative affairs at the American Meat Institute, a meat and poultry trade association.
Other groups that were originally sympathetic to ethanol are drifting away. They fear that the fuel's advantages are outweighed by the rise in corn prices, which they say increases the cost of foods ranging from steak to cereal. "Many policy makers were seduced by ethanol," says Cal Dooley, president of the Grocery Manufacturers Association. He opposes increasing federal support for ethanol.
The Renewable Fuels Association, the Washington-based ethanol trade group, disputes that ethanol is the chief culprit for rising food prices. It says higher energy costs are more to blame.
There's more about how various interest groups are lining up on various sides of the issue. I question how much the price of corn is affecting food prices. I've read how much of the cost of a unit of grain-based food (box of corn flakes, loaf of bread) is the grain, and it's not much. So a doubling of corn/bushel wouldn't be felt much in a box of corn flakes, syrup, etc.. It might be more significant in the price of dead cows, aka beef. In any case, it's time to spread the loot around to the various lobbyists in DC instead of the ethanol weasels getting it all. Fast forward 4 years to the next presidential campaign; will all the politicians be so very very in favor of ethanol when the Iowa primary rolls around.