Re: Undoing America's Ethanol Mistake
- From: El Castor <No_One@xxxxxxxx>
- Date: Tue, 29 Apr 2008 10:35:33 -0700
On Tue, 29 Apr 2008 05:52:38 -0700, Sordo <sordo @ privacy.net> wrote:
Undoing America's Ethanol Mistake
By SEN. KAY BAILEY HUTCHISON
Posted Friday, April 25, 2008 4:20 PM PT
http://www.ibdeditorials.com
The Nobel Prize-winning economist Milton Friedman once said, "One of the
great mistakes is to judge policies and programs by their intentions
rather than their results."
When Congress passed legislation to greatly expand America's commitment
to biofuels, it intended to create energy independence and protect the
environment.
But the results have been quite different. America remains equally
dependent on foreign sources of energy, and new evidence suggests that
ethanol is causing great harm to the environment.
In recent weeks, the correlation between government biofuel mandates and
rapidly rising food prices has become undeniable. At a time when the
U.S. economy is facing recession, Congress needs to reform its
"food-to-fuel" policies and look at alternatives to strengthen energy
security.
On Dec. 19, 2007, President Bush signed into law the Energy Independence
and Security Act. This legislation had several positive features,
including higher fuel standards for cars and greater investment in
renewable energies such as solar power.
However, the bill required a huge spike in the biofuel production
requirement, from 7.5 billion gallons in 2012 to 36 billion in 2022.
This was a well-intentioned measure, but it was also impractical. Nearly
all our domestic corn and grain supply is needed to meet this mandate,
robbing the world of one of its most important sources of food.
We are already seeing the ill effects of this measure. Last year, 25% of
America's corn crop was diverted to produce ethanol. In 2008, that
number will grow to 30%-35%, and it will soar even higher in the years
to come.
Furthermore, the trend of farmers supplanting other grains with corn is
decreasing the supply of numerous agricultural products. When the supply
of those products goes down, the price inevitably goes up.
Subsequently, the cost of feeding farm and ranch animals increases and
the cost is passed to consumers of beef, poultry and pork products.
Since February 2006, the price of corn, wheat and soybeans has increased
by more than 240%. Rising food prices are hitting the pockets of
lower-income Americans and people who live on fixed incomes.
While the blame for higher costs shouldn't rest exclusively with
biofuels ? drought and rising oil costs are contributing factors ? the
expansion of biofuels has been a major source of the problem.
The International Food Policy Research Institute estimates that biofuel
production accounts for between one-quarter and one-third of the recent
spike in global commodity prices.
For the first time in 30 years, food riots are breaking out in many
parts of the globe, including major countries such as Mexico, Pakistan
and Indonesia.
The fact that America's energy policies are creating global instability
should concern the leaders of both political parties.
Restraining the dangerous effects of artificially inflated demand for
ethanol should be an issue that unites both conservatives and
progressives.
As a recent Time cover story pointed out, biofuel mandates increase
greenhouse gasses and create incentives for global deforestation.
In the Amazon basin, huge swaths of forest are being cleared to meet the
growing hunger for biofuels.
In addition, relief organizations are facing gaping shortfalls as the
cost of food outpaces their ability to provide aid for the 800 million
people who lack food security.
The recent food crisis does not mean we should entirely abandon
biofuels.
The best way to lower energy prices, and reduce our dependence on
foreign oil, is to accelerate production of all forms of domestic
energy.
Expanding biofuels while refusing to take other measures, such as
lifting the ban on oil and natural gas production in Alaska and the
Outer Continental Shelf, is counterproductive. We should be tapping into
a broad portfolio of energy options, including clean coal, nuclear power
and wave energy.
The key is increasing energy supply. By taking these measures, we can
enable biofuels to be part of the energy solution, instead of
contributing to the energy problem.
Congress must take action. I am introducing legislation that will freeze
the biofuel mandate at current levels, instead of steadily increasing it
through 2022.
This is a common-sense measure that will reduce pressure on global food
prices and restore balance to America's energy policy.
As the Senate debates this issue, we must remain focused on the facts.
At one point, expanding biofuels made sense for America's energy
security. But the recent surge in food prices has forced us to adapt.
The global demand for energy and food is expected to rise about 50% in
the next 20 years, and the U.S. is well-positioned to be a leader in
both areas.
That will require a careful, finely tuned approach to America's farm
products.
By freezing the biofuel mandate at current levels, we will go a long way
to achieving that goal.
Hutchison is a member of the Senate Republican leadership and the senior
senator from Texas.
Not enough. In addition to eliminating mandates, we need to eliminate
subsidies. This is another example of why socialism doesn't work. When
government picks economic winners and losers, it almost always picks
wrong. Fund research, if necessary (although that can also turn out
poorly), but let the market choose the winners.
.
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