U.N. Official: Shelve EPA Ethanol Mandate
UPI Top Stories -- August 10, 2012 -- Washington should shelve a mandate siphoning 40 percent of the U.S. corn crop for ethanol and use the corn for food and feed, a top U.N. hunger official said.Suspending the mandate could help fend off a world food crisis, U.N. Food and Agriculture Organization Director General Jose Graziano da Silva said in a Financial Times opinion piece published Friday.
The U.S. Environmental Protection Administration mandate, known as the Renewable Fuel Standard, requires 13.2 billion gallons of biofuel to be blended into gasoline by 2012 to cut greenhouse-gas emissions and U.S. foreign-oil dependence.
But to meet this requirement -- part of the Energy Policy Act of 2005, signed into law by President George W. Bush seven years ago this week -- 40 percent of the nation's corn crop winds up as ethanol, while 36 percent is used for livestock feed.
Giving such a high portion to ethanol is irresponsible, given weather conditions have produced the worst drought in more than 50 years, Graziano da Silva said, adding the drought and heat wave are evidence "that even the most advanced agricultural systems are subject to the vagaries of the weather."
The continental United States endured the hottest July since temperature records started being kept 117 years ago. The drought-ravaged Midwest farm belt has recently had rain and moderate temperatures, but that's widely expected to do little to help the shriveled corn crop.
With the United States exporting nearly half the world's corn, a food shortage looms but is not yet a crisis, Graziano da Silva said in his op-ed piece.
"However, risks are high and the wrong responses to the current situation could create [a crisis]," the U.S.-born Brazilian agronomist wrote.
"An immediate, temporary suspension of that mandate would give some respite to the market and allow more of the crop to be channeled toward food and feed uses."
His call followed a similar appeal this week by 156 House lawmakers and 25 senators urging EPA Administrator Lisa Jackson to loosen ethanol targets and adjust the mandate.
Governors of livestock-raising states such as Texas that are helped by lower corn prices, along with the meat and livestock industry, have also expressed alarm at corn prices, which have surged more than 60 percent since mid-June.
Corn futures closed at a record of nearly $8.30 a bushel Thursday. Corn averaged slightly above $2 a bushel for most of the last decade.
A U.S. Agriculture Department report, to be released at 8:30 a.m. EDT Friday, is widely expected to slash U.S. corn-production estimates due to drought damage.
U.S. Agriculture Secretary Tom Vilsack told the Financial Times he doubted waiving the ethanol mandate would lower corn prices.
He said biofuels had lowered gasoline prices and created jobs. He added that high corn prices were already curbing ethanol production.
The Renewable Fuels Association ethanol trade group said Thursday ethanol production had fallen 15 percent since the beginning of the year.
Some analysts argue that because ethanol is now a huge component of global energy supplies, the suspension of the mandate could push up oil and gas prices.
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