Bad Weather for Biofuels
Flooding in Iowa is pushing grain prices to unprecedented heights. Meanwhile federal requirements that crops be turned into fuel continue despite rising food prices around the world. Ken Cook, founder of the NGO Environmental Working Group (EWG), stated that federal food policy amounted to "hope for good weather."
EWG’s view is that the "ethanol mandate plays a key role in...inflated U.S. and global food prices" and the NGO predicts "an even sharper food and fuel price spiral...." According to EWG, "Congress has only one recourse: re-open the debate on the ethanol mandate." Although ethanol production is far from the only factor contributing to higher food prices, it is playing an increasingly problematic role as federal mandates further increase consumption of biofuels.
While there is disagreement over the environmental benefits of biofuels, what is not in dispute is that there is still a "54-cents-a-gallon tariff on imports of biofuels, including sugar-based ethanol from Brazil." The continuing tariff demonstrates that environmental concerns, consumer welfare and energy security are not the primary determinant of US biofuel policies.
The US can’t grow its way to energy security. It’s time to end the tariff on imported ethanol and move to a market-based policy for biofuels.
See EWG article "America’s Food-to-Fuel Gamble"
See Arkansas Democrat Gazette story
See Bloomberg News story on Brazilian ethanol exports
