06 May 2008 21:02 [Source: ICIS news]
Representative Rick Boucher (Democrat-Virginia), chairman of the House subcommittee on energy and air quality, told a hearing on the four-month-old biofuels mandate that “there are increasing concerns over the food versus fuel question, and we saw 24% of the 2007
Boucher said that rising oil prices, droughts in the
In December last year Congress passed and President George Bush signed into law the Energy Independence and Security Act (EISA), which among other things required a massive increase in
Boucher said the congressionally mandated demand for corn ethanol is not only raising corn prices but also prices for wheat and soybeans as more farmers divert cropland from those grains to corn.
“All of these factors call for a re-examination of our biofuels mandate,” Boucher said.
Representative Fred Upton of
“Certainly there are some legitimate concerns with using food for fuel that we need to examine,”
“Oil is over $120/bbl and gasoline prices are on a path toward $4/gal, yet
“If we were permitted to utilize our vast domestic energy reserves, prices would fall and the
Various Democrat and Republican members of the subcommittee also urged reconsideration of the new ethanol mandate.
Representative Mike Doyle (Democrat-Pennsylvania) said the impact of the ethanol mandate on corn and other food costs is an example of “the law of unintended consequences raising its ugly head”.
“We need to rollback the support structure for corn-based ethanol,” he said. In addition to the 53 cents/gal tariff on ethanol imports, domestically produced corn ethanol enjoys a 51 cents/gal federal subsidy.
Representative Jane Harman (Democrat-California) said the ethanol mandate’s impact on food prices amounted to “robbing Peter to pay Paul” for US consumers and taxpayers. “It is the right thing to take another look at the ethanol mandate,” she said.
Representative Joe Barton (Republican-Texas), a member of the full House Energy & Commerce Committee, said he soon will introduce legislation to repeal the new 36bn gal/year biofuels mandate.
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