Sun-Sentinel.com

With food costs rising, ethanol benefits now questioned

By H. JOSEF HEBERT

May 7, 2008

WASHINGTON

http://www.sun-sentinel.com/business/sfl-flzethanol0507sbmay07,0,1342007.story

Just months ago, ethanol was the Holy Grail to energy independence and a "green fuel" that would help nudge the country away from climate changing fossil energy.

Democrats and Republicans cheered its benefits as Congress directed a fivefold increase in ethanol use as a motor fuel. President Bush called it key to his strategy to cut gasoline use by 20 percent by 2010.

But now with skyrocketing food costs even U.S. senators are complaining about seeing shocking prices at the supermarket and hunger spreading across the globe, some lawmakers are wondering if they made a mistake.

"Our enthusiasm for corn ethanol deserves a second look. That's all I'm saying, a second look," said Rep. Jane Harman, D-Calif., at a House hearing Tuesday where the impact of ethanol on soaring food costs was given a wide airing.

The dramatic reversal has stunned ethanol producers and its supporters in
Washington as they have seen their product shift from being an object of praise to one of derision.

Sen. Charles Grassley, R-Iowa, one of the Senate's two working farmers and a longtime ethanol booster, said he finds it hard to believe that ethanol could be "clobbered the way it's being clobbered right now" over the issue of food costs. What does the cost of corn have to do with the price of wheat or rice, he is telling people.

The uproar over ethanol is clearly gaining momentum.

Two governors Texas and Connecticut and 26 senators, including the GOP's presumptive presidential nominee John McCain, are asking the Environmental Protection Agency to cut this year's mandate for 9 billion gallons of corn ethanol in half to ease, they say, food costs.

Robert Meyers, an EPA deputy assistant administrator, told a House hearing Tuesday the agency will respond to the request as quickly as possible, but doubts anything will be forthcoming for about three months. There's a regulatory process to follow, he said.

But lawmakers, even those who enthusiastically supported the requirement for refiners to ramp up ethanol use to 36 billion gallons a year by 2022 from about 7 billion gallons last year, have begun to have qualms.

"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 mandate passed just before last Christmas and go back to the one Congress enacted in 2005 calling for a more modest ethanol increase.