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With food costs rising, ethanol benefits now questioned
By H. JOSEF HEBERT
Associated Press
May 7, 2008

Page 2 of 2

''Corn ethanol was presented as an almost Holy Grail solution,'' said Rep. Mike Doyle, D-Pa. ''But I believe its negatives today far outweigh its benefits. ... We need to revisit this ... and back away from the food to fuel policy.''

Rep. Joe Barton of Texas, the ranking Republican on the House Energy and Commerce Committee, said he will introduce a bill to abandon the ethanol requirement passed just before last Christmas and go back to the one Congress enacted in 2005 that would call for a more modest ethanol increase.

But Barton is not so naive to think his bill has a chance. House Democratic leaders have given no indication of retreating from the ethanol requirement. Still, said Barton, ''it's worth putting in.''

And congressional unease about the food-for-fuel debate is showing itself in a number of places.

In a massive farm bill -- for the first time in memory -- lawmakers recently trimmed back the federal tax subsidy for corn ethanol, reducing the tax break from 51 cents to 45 cents a gallon.

At the same time, however, lawmakers reiterated their support for making ethanol production from cellulosic feedstocks -- wood chips, switchgrass and even garbage -- commercially viable. The same farm bill provides $400 million for cellulosic ethanol research and development.

And the rush of hearings into the food-to-fuel issue show no sign of subsiding. The hearing on Tuesday by an Energy and Commerce subcommittee vied for attention with another hearing into the soaring cost of diesel fuel. The Senate's Homeland Security and Government Affairs Committee has scheduled another hearing on food and fuel on Wednesday.

Will anything come of it?

''Nothing,'' says Rep. John Shimkus, R-Ill., during a break in Tuesday's session.

Shimkus, whose state has one of the biggest ethanol producers in Archer Daniels Midland Co., supports the mandate and sees heavy reliance on corn as a feedstock only temporary. ''It's a bridge (to) cellulosic ethanol and we can't jettison the present and not get to the future,'' he says.

Bob Dineen, president of the Renewable Fuel Association, which represents the ethanol industry, says the issue is about getting away from using oil, an argument that resonated with lawmakers and convinced them to mandate the increased ethanol production.

His argument is twofold: It's a myth that corn-based ethanol is causing today's high food prices and that because ethanol is cheaper than gasoline, it's cutting the costs for consumers at the pump.

If ethanol production were cut in half this year, as EPA is being asked to do, insists Dineen, gasoline prices could increase by nearly a third because of supply disruptions and the higher cost of replacement gasoline.

''It's difficult for me to conceive that they will back away from something they passed just five months ago,'' says Dineen.

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Copyright 2008 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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