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Washington, DC 20510
Ph: 202.224.6342
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Raleigh Office:
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Press Releases
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DOLE: EPA GETS IT WRONG, DECISION NOT TO WAIVE FOOD-TO-FUEL MANDATES HURTS FAMILIES, BUSINESSES, ENVIRONMENT
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August 8th, 2008 - Washington, D.C. - U.S. Sen. Elizabeth Dole expressed her disappointment in the Environmental Protection Agency’s (EPA) decision to deny a reduction in the nationwide Renewable Fuel Standard (RFS). As a result, the amount of renewable fuel, which relies heavily on corn-based ethanol, will continue to be mandated at 9 billion gallons in 2008 and will increase to 11.1 billion gallons in 2009.
“I am disappointed that the EPA is failing to take action to help families who are being hit hard with escalating food prices, especially when skyrocketing energy costs are already straining family budgets,” said Dole. “Food-to-fuel mandates have resulted in a substantial volume of our food supply being diverted into ethanol – severely impacting the cost of basic items like milk, eggs and meat.”
“High food costs are hurting families, food banks and our anti-hunger efforts, as well as North Carolina businesses. Not to mention, numerous scientific studies demonstrate that the mandate is harming the environment through land-use changes, increasing dangerous greenhouse gas emissions.”
The RFS is not solely to blame for elevated commodity prices, but demand pressure from the RFS is a significant contributor, and one that the EPA and Congress can control. Current law authorizes the EPA to waive the national RFS if the agency determines that the mandated biofuel volumes would cause “severe harm” to the economy or the environment.
Background on rising food prices
U.S. wheat stocks are at 60 year lows and soybean stocks are at their lowest levels since 2003-2004. Corn ending stocks relative to expected use, even with last year’s record crop, are well below the established 25 year average, and the world corn stocks-to-use ratio now stands at a whopping 32 year low. Given these tense supply and demand conditions, wheat, corn and soybean prices have climbed steadily higher by more than 240 percent since February 2006.
Unfortunately, the outlook is not improving. USDA's recent Prospective Plantings report indicated that U.S. corn acreage is expected to decline 8 percent from last year. This decline in corn production will coincide with a dramatic escalation in the diversion of corn from food and feed to fuel, going from 6.5 billion gallons in 2007 to 9 billion by the end of this year. This will require burning up to 33 percent of the U.S. corn crop to comply with this year’s mandate.
According to the USDA, food inflation numbers are now approaching levels not seen in the U.S. since 1990, when food prices climbed 5.8 percent. This forecast signals that a typical household will probably pay about $350 more per year for groceries.
Background on Dole’s action
During debate of the 2007 Energy Independence and Security Act (EISA), Dole helped sponsor an amendment to provide relief from the renewable fuel standard mandate in the event of feedstock shortages. The amendment would have protected consumers and producers from price surges. Despite broad support, the amendment was not approved.
On May 2, 2008, Dole and 23 of her colleagues wrote to EPA Administrator Stephen Johnson to request that the Agency waive or examine alternatives to food-to-fuel mandates because of concern the mandates contribute to higher food prices.
On May 19, 2008, Dole and 11 of her colleagues introduced S. 3031, a bill to limit the use of ethanol to meet the renewable fuel standard. S. 3031 caps corn-based ethanol at EISA 2008 levels of 9 billion gallons, thus preventing the EPA Administrator from increasing the corn-based volume requirement to 15 billion gallons by 2015. S. 3031 transitions the U.S. away from corn-based ethanol to a more sustainable and practical fuel source, cellulosic biofuel, which does not adversely affect the economy, food supplies and prices, and the environment, all of which are harmed with corn-based ethanol.
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