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Monday, April 28, 2008
Undoing America's Ethanol Mistake
By Senator Kay Bailey Hutchison
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Will Hillary Clinton fight for the nomination past June 1st?


The Nobel Prize-winning economist Milton Friedman once said, "One of the great mistakes is to judge policies and programs by their intentions rather than their results."

When Congress passed legislation to greatly expand America's commitment to biofuels, it intended to create energy independence and protect the environment.

But the results have been quite different. America remains equally dependent on foreign sources of energy, and new evidence suggests that ethanol is causing great harm to the environment.

In recent weeks, the correlation between government biofuel mandates and rapidly rising food prices has become undeniable. At a time when the U.S. economy is facing recession, Congress needs to reform its "food-to-fuel" policies and look at alternatives to strengthen energy security.

On Dec. 19, 2007, President Bush signed into law the Energy Independence and Security Act. This legislation had several positive features, including higher fuel standards for cars and greater investment in renewable energies such as solar power.

However, the bill required a huge spike in the biofuel production requirement, from 7.5 billion gallons in 2012 to 36 billion in 2022.

This was a well-intentioned measure, but it was also impractical. Nearly all our domestic corn and grain supply is needed to meet this mandate, robbing the world of one of its most important sources of food.

We are already seeing the ill effects of this measure. Last year, 25% of America's corn crop was diverted to produce ethanol. In 2008, that number will grow to 30%-35%, and it will soar even higher in the years to come.

Furthermore, the trend of farmers supplanting other grains with corn is decreasing the supply of numerous agricultural products. When the supply of those products goes down, the price inevitably goes up.

Subsequently, the cost of feeding farm and ranch animals increases and the cost is passed to consumers of beef, poultry and pork products.

Since February 2006, the price of corn, wheat and soybeans has increased by more than 240%. Rising food prices are hitting the pockets of lower-income Americans and people who live on fixed incomes.

While the blame for higher costs shouldn't rest exclusively with biofuels — drought and rising oil costs are contributing factors — the expansion of biofuels has been a major source of the problem.

The International Food Policy Research Institute estimates that biofuel production accounts for between one-quarter and one-third of the recent spike in global commodity prices.

For the first time in 30 years, food riots are breaking out in many parts of the globe, including major countries such as Mexico, Pakistan and Indonesia.

The fact that America's energy policies are creating global instability should concern the leaders of both political parties.

Restraining the dangerous effects of artificially inflated demand for ethanol should be an issue that unites both conservatives and progressives.

As a recent Time cover story pointed out, biofuel mandates increase greenhouse gasses and create incentives for global deforestation. Continued...

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About The Author
Senator Hutchison chairs the Senate Republican Policy Committee and is representing Texas in her third full term in the Senate.

 
Popular Articles By Hutchison

Iowa Primary is over
Let's face it, the timing of that mandate for the ever-increasing biofuel requirements came in the leadup to the Iowa Caucuses. All these politicians had to kiss up to the farmers. Hey, the caucuses are over, let's dump the mandates, they were a mistake.

You guys are clueless
Is it any wonder that the average citizen thinks you folks in Washington are clueless? It didn't take a genius to see this coming. Didn't you guys consider for just one second getting the scientists and the economists in the same room? This should have been avoidable.

You talk about freezing the biofuel mandate where it's at. Will that still be corn-based? If so, then you're still not getting it. Get corn out of it. It's NOT the solution. Freezing it where it's at will leave us stuck with these ridiculous prices and those prices will only get worse with additional droughts and increased demand from China and India. Forget corn. Drop it. It's not the solution for our energy sources.

Solutions you should be looking at: cellulosic sources (like waste products from wood, etc.) and algae. An algae-based biofuel plant opened in your home state on April 1st. Have you even heard about it? Using otherwise useless cellulosic byproducts and algae won't impact other markets. You should be throwing BILLIONS of dollars into those industries. Instead, you do things that cripple our economy by jacking up food and oil prices (making Iran and Venezuela and Russia and Saudi Arabia filthy rich in the meantime).

We elect you people in hopes that you'll make out lives a little BETTER, not WORSE. Can you guys try to do something right for a change? If you can't, then quit and let someone take your place who understands the basics of economics.
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