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Home arrow Business/Farm arrow This is no time for U.S. lawmakers to backtrack on ethanol incentives

This is no time for U.S. lawmakers to backtrack on ethanol incentives PDF Print E-mail
Written by John Schlageck/Kansas Farm Bureau   
Tuesday, 15 July 2008
 

Now is not the time to backtrack on one of the few positives of this nation’s horribly inadequate energy policy. In case you haven’t heard, some lawmakers have set their sites on this nation’s plans to use more renewable fuels.

Here’s what I’m talking about. More than 50 House Republicans joined forces to ask the Environmental Protection Agency to reduce the renewable fuels standard, which requires the nation to use a specific amount of ethanol.

If this country of ours is ever going to curb its appetite for foreign oil or to move toward the next generation of ethanol and move beyond corn, it must continue moving ahead and not move back.

These lawmakers are blaming ethanol for higher food prices. That’s another mistake.

Those rushing to criticize biofuels as the main culprit for the food crisis gripping the world today always seem to overlook the benefits. Excessive rhetoric has gone so far as to blame biofuels as a “crime against humanity.”

It’s no secret such highly emotional claims make great headlines and sound bites, but they fail to communicate the complex set of factors driving world food prices.

Record prices for oil, natural gas and other energy sources are making it impossible for farmers in Kansas, the United States and around the world to produce food at the same low prices with which we as consumers have for so long taken for granted.

In Europe, diesel fuel used to run the machinery needed to raise crops has doubled in price during the last year. In this country, not only has diesel doubled, but so too have all the other inputs like fertilizer (based on fossil fuel) which has risen nearly 400 percent since 1999.

Today, the United States imports 65 percent of its petroleum needs. By 2030, the Energy Information Administration projects the United States will import 70 percent of its petroleum.

Two-thirds of the world’s known oil reserves are located in the volatile Middle East. The United States spends more than $137 billion a year on military operations securing the safe delivery of oil from the Persian Gulf, according to the president of the National Defense Council Foundation.

It’s also estimated the United States has spent more than $130 billion during a 32-year period in government subsidies to the oil industry. The Government Accounting Office says this does not take into account the billions spent since the turn of the century or the money spent to protect our military troops in the Middle East.

Record fuel prices have also made it much more difficult for food aid organizations to deliver much needed assistance. The largest U.S. food aid organization spent 65 percent of its annual budget on transportation costs alone, according to a U.S. GAO analysis. The fact that much of this humanitarian food aid is shipped around the world requires an enormous amount of fuel.

Biofuel production uses only 3 percent of the world’s coarse grain supply. On average, the world consumes about 86 million barrels of oil per day. That figure is predicted to rise to 116 million barrels by 2030, according to the International Energy Associa­tion.

World oil supplies are expected to stay well above $100 a barrel in the future with some predicting $200 per barrel.

After more than three decades of cheap oil, this country and others around the globe have finally come to the conclusion they must curb their thirst for oil and develop other sources of fuel. Biofuel production is the only non-fossil fuel that is helping reduce oil demand today.

If it weren’t for the increasing production of world biofuel producers, oil consumption would expand by 1 million barrels per day, according to a recent IEA report.

Without a doubt, biofuel production is not only lowering oil demand, but is also helping mitigate the devastating impacts of volatile oil and gasoline markets.

On a global scale, biofuels are today the single largest contributor to world oil supply growth, according to a senior commodity analyst at Merrill Lynch.

Through the existing ability of agriculture and developing technologies that will improve efficiencies and productivity of farmers and biofuel producers, the food needs of the world can be met and the long journey toward energy security can begin.

John Schlageck is a leading commentator on agriculture and rural Kansas. Born and raised on a diversified farm in northwestern Kansas, his writing reflects a lifetime of experience, knowledge and passion.


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