(Source: Sen. Kay Bailey Hutchison)
WASHINGTON – U.S. Senator Kay Bailey Hutchison (R-TX), Chairman of the Republican Policy Committee, today filed legislation to freeze the corn-based ethanol mandate at this year’s level. Legislation passed last year requires an annual increase in the amount of ethanol produced domestically, from 4.7 billion gallons in 2007, to nine billion this year and increasing to 15 billion in 2015. According to commodity price reports, since February 2006 the combined increase in the price of corn, wheat, and soybeans is over 416%.
Sen. Hutchison’s legislation allows for necessary adjustments in the Renewable Fuel Standard to transition to a more realistic and sustainable source which does not use food for fuel.
“The ethanol mandate is clearly causing unintended consequences on food prices for American consumers,” said Sen. Hutchison. “Freezing the mandate is in the best interests of consumers, who cannot afford the increasing prices at the grocery store due to the mandate diverting corn from food to fuel.”
Sen. Hutchison’s legislation is cosponsored by Sens. John McCain (R-AZ), John Cornyn (R-TX), Wayne Allard (R-CO), John Barrasso (R-WY), Susan Collins (R-ME), Jim DeMint (R-SC), Elizabeth Dole (R-NC), Mike Enzi (R-WY), Ted Stevens (R-AK), and John Sununu (R-NH).
The Energy Independence and Security Act (EISA) of 2007 increased the ethanol mandate to 15 billion gallons of corn and 1 billion gallons of bio-diesel by 2015. In that legislation, Congress provided the EPA with the authority to waive the mandates, or adjust them as necessary to provide relief for consumers.
On April 22, Sen. Hutchison sent a letter (signed by 23 other Senators) to Environmental Protection Agency (EPA) Administrator Stephen Johnson asking for a status report on the pending rule-making process for the waiver of all or portions of the ethanol mandate passed by Congress in 2007. The letter also urged the EPA to consider the sharp rise in food prices as they review the mandate.
According to the World Bank, global food prices have increased by 83 percent in the last three years. According to the Food and Agriculture Organization of the United Nations, food costs will increase another 10 to 15 percent due to biofuel production, assuming the scheduled mandates remain in effect.