US Lawmakers Urge Scaling Back Biofuels Mandate

  • 07/05/2008

  • Planet Ark (Australia)

As food prices surge on grocery store shelves, Republican lawmakers on Tuesday said Congress should reverse course and slow a fivefold boost in biofuel use by 2022, or even drop entirely mandates to use ethanol blended from corn. Ethanol, once the darling of the United States' plan to wean itself from foreign energy, has come under attack in recent months as prices for commodities including corn and soybeans have risen to record highs, boosting retail prices for meats, vegetables and bread. In an effort to provide relief for consumers, lawmakers have proposed revisiting the so-called Renewable Fuels Standard (RFS) changed by Congress last December. "No one on either side of the aisle likes the unintended consequences of what the proponents passed last December with the best of intentions," said Rep. Joe Barton, the top Republican on the House Energy and Commerce Committee, at a hearing. "If we do nothing we're going to have the chaos we have now." This year alone 9 billion gallons of biofuels are required to be mixed into the nation's fuel supply, a sizable increase from the 5.4 billion gallons mandated under legislation passed in 2005. And by 2022, the new law requires the US gasoline supply to include 36 billion gallons of renewable fuels. A group of 22 Republican senators, including presidential candidate John McCain, last week told the Environmental Protection Agency it should consider exercising its authority to waive the mandate, given soaring food prices. Barton, who was sceptical the United States could even meet the 9 billion gallon mandate this year, said he would soon be introducing legislation to reinstate the biofuels requirements in the 2005 act. But lawmakers from big farm states urged caution. "It is simply foolish to only examine one of the factors or make drastic decisions to undo a carefully crafted policy we enacted just five months ago," said Rep. Tammy Baldwin, a Wisconsin Democrat. Citing rising food costs, Texas Gov. Rick Perry asked the EPA in April to waive half of its mandated ethanol requirement for 2008. Perry and others have said those rules should be relaxed in order to inject more corn into the food supply for livestock and to encourage farmers to plant other crops. Robert Meyers, an assistant administrator at the EPA, said at a House Energy and Commerce subcommittee hearing his agency has never before determined if the renewable fuel standards created severe economic or environmental harm. The EPA still must issue rules to set guidelines for considering waiver requests such as the one Texas submitted, Meyers said. "This would be a case of first impression for the agency," he added. Ethanol consumed about 25 percent of the US corn crop last year. But farm and biofuel groups and the US Agriculture Department have downplayed ethanol's impact on food prices, instead blaming oil above $120 a barrel, increased global food demand and a drop in crop production in parts of the world. The Renewable Fuels Association defended the growth of ethanol production as a major factor in keeping gasoline prices lower than they otherwise would be. Bob Dinneen, president of the group, said an ethanol waiver would increase gasoline prices from the current average retail price of $3.68 per gallon to $4.79 per gallon. "That is severe economic harm," said Dinneen. "Ethanol is not the only answer. It is not the silver bullet, but it is an extraordinary first step." (Reporting by Christopher Doering; editing by Jim Marshall) Story by Christopher Doering REUTERS NEWS SERVICE