Sen. John Thune said an effort by some of his Republican colleagues to ask the Environmental Protection Agency to consider waiving the country's ethanol production mandate amid higher food prices is "misguided."
Thune said such a move would set back the nation in its efforts to become energy independent. The South Dakota Republican cited a Merrill Lynch analyst's recent estimate that oil and gasoline prices would be higher by about 15 percent - around 50 cents a gallon - without ethanol.
"We send half a trillion American dollars to countries around the world for oil every single year, and here we have an energy source that's home grown, that's renewable, that's environmentally friendly and we're trying to reverse course," Thune said. "I think that's just a huge mistake."
Presidential candidate Sen. John McCain of Arizona and 21 other Republican senators said in a letter to the EPA that the agency has the authority to waive or restructure a law requiring a fivefold increase in U.S. ethanol production by 2022.
Congress passed a law last year mandating a ramp-up to 15 billion gallon of corn ethanol by 2015 and 36 billion by 2022. But McCain and other Republicans said those rules should be waived to put more corn back into the food supply for livestock, and to encourage farmers to plant other crops.
"This subsidized (ethanol) program - paid for by taxpayer dollars - has contributed to pain at the cash register, at the dining room table, and a devastating food crisis throughout the world," McCain said in a statement.
Thune said high food prices have more to do with high oil prices than corn's use as an ethanol feedstock. He said all products are affected by increases in costs associated with transportation and other energy-intensive inputs such as processing and packaging.
"People have really been on the attack lately, and I think most of it's inspired by oil companies," Thune said. "We're kind of in the pile-on stage.
"All of the sudden ethanol has become the whipping boy for high food prices, not to mention the fact that $120 oil has a lot more to do with high food prices than anything else."
Jeff Broin, president and chief executive of Sioux Falls-based Poet, the nation's largest ethanol producer, said ethanol is "one of the only solutions for holding down the price of oil in the long-term."
That point also is made in an April study from the Agricultural and Food Policy Center at Texas A&M University, which says that relaxing the renewable fuel standard would not significantly lower corn prices.
"The ethanol industry has grown in excess of the RFS, indicating that relaxing the standard would not cause a contraction in the industry," the study said.
Thune, a McCain supporter, said he would have preferred that McCain had not signed on to the letter, but he wasn't surprised. He said McCain historically has not been a fan of a tax credit that gives refiners 51 cents per gallon to blend ethanol into their gasoline.
Thune said he and Iowa Sen. Charles Grassley are working on a response to the 22 senators' letter.
Posted in Top-stories on Sunday, May 4, 2008 11:00 pm
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