Congressman Bob Goodlatte, May 7- Who’s paying the costs of the federal ethanol mandate? Every family who shops in a grocery store or dines at a restaurant, every livestock producer who faces higher feed costs, and every motorist who fills up their tank at the gas station pays the price of this unworkable policy.
The ethanol debate is no longer just a debate about fuel or food. It is also a debate about jobs, small business, and economic growth. The federal government’s creation of an artificial market for the ethanol industry has triggered a domino effect that is hurting American consumers, livestock producers, food manufacturers, and retailers. A policy that started with good intentions has resulted in a slew of unintended consequences.
The Renewable Fuel Standard (RFS) mandates that 36 billion gallons of renewable fuels be part of our nation’s fuel supply by 2022. However, almost the entire mandate is currently being fulfilled by corn ethanol. One of the greatest unintended consequences of the RFS is the steep increase in the price of corn. As the amount of corn being used for fuel goes up each year, the problem grows worse. While more corn supplies are being diverted to ethanol production, corn prices have climbed significantly. Between 2005 and 2011, corn prices rose by $5 per bushel. Then last summer, severe drought coupled with demands from the RFS sent corn prices to record highs. Simply put, the ethanol mandate has driven up costs at the expense of food and feed uses.
A few weeks ago, I introduced the RFS Elimination Act, which would completely get rid of the RFS. I also introduced the RFS Reform Act, which would eliminate corn-based ethanol requirements, cap the amount of ethanol that can be blended into conventional gasoline at 10 percent, and set the level of advanced biofuels production at more achievable levels.