Biofuels Under Attack : Same Old Story

June 1, 2015

By Sen. Chuck Grassley

It’s been a familiar few weeks for biofuels.  First, chain restaurants and chicken producers blamed ethanol for raising food prices. Then, the federal government’s Environmental Protection Agency (EPA) caved to the oil industry in proposing weak requirements for the amount of biofuels to be included in the fuel supply.  

Those of us from states that produce ethanol and biodiesel are used to the attacks.  We always fight back, and producers continue to do their best to develop the next generation of clean biofuels. Consumers like biofuels. The idea of a homegrown product that reduces emissions harmful to the environment and brings the United States freedom from volatile oil-producing countries is appealing.  

The EPA should know this. Instead, the agency continues to buy into Big Oil’s argument that the infrastructure isn’t in place to handle the fuel volumes required by law. Big Oil’s obstruction and the EPA’s delays and indecision have harmed biofuel producers and delayed infrastructure developments. While I support the Agriculture Department’s efforts to promote alternative fuel infrastructure, if the program were allowed to function as intended, private investments already would have been made. What happened to the President who claimed to support biofuels? He seems to have disappeared, to the detriment of consumers and our country’s fuel needs.

Meanwhile, an op-ed in The Wall Street Journal (“Paying for Ethanol at the Pump and on the Plate,” May 15), gave me an overwhelming sense of déjà vu. Once again, the food industry is teaming up with Big Oil to smear homegrown biofuels producers at the expense of energy independence and cleaner air. This time, it’s the chicken producers and chain restaurants making many of the same erroneous, intellectually dishonest claims we’ve heard before.

It’s pure myth that food commodity costs have spiked since the Renewable Fuel Standard (RFS) was adopted in 2005. In fact, consumer food prices have increased by an annual average of 2.68 percent since 2005, compared with an increase of an average of 3.47 percent in the 25 years leading up to passage of the RFS. Chicken breast prices have been nearly flat over the past seven years. Corn prices are expected to be the lowest in nearly 10 years.

The op-ed repeats the false claim that because of the RFS, corn is being “diverted” from livestock feed to ethanol. Corn used for ethanol has come from the significant increases in corn production since 2005. And, one-third of the corn used for ethanol production is returned to the market as animal feed. The amount of corn and corn co-products available for feed use is larger today than at any time in history.  It’s hardly being diverted.

Next is the misleading claim that ethanol production has contributed to global food scarcity. Corn exports are slightly higher than they were prior to the RFS. Food inflation is at the lowest rate of increase than at any time over the last 40 years.  At the same time, the United States is producing record amounts of corn ethanol.

As for the mistaken claim that the increases in feed costs have affected the American production of beef, pork and chicken, the U.S. Department of Agriculture is projecting record meat and poultry production.

A few years ago, when corn prices were at a peak, grocers, food producers and restaurants warned of being forced to pass those higher costs on to consumers immediately.  Now that corn prices have dropped by more than half, are consumers seeing the benefits?  If ethanol is a convenient scapegoat for what’s wrong, maybe it also should get credit for what’s right.