Thursday, August 9, 2012

US Senators Begging EPA to Cut Ethanol Mandates. What's Wrong With This Picture?

Churning the food supply into fuel has always been an insane idea but this is truly mindboggling. Senators are begging to EPA to cut ethanol mandates! Earth to senators - just cut the damn EPA!  Federal Agencies Gone Wild is not an unusual situation.  Federal agencies are above the law and beyond congressional oversight, reach and control. If anybody wants to know how powerful federal agencies are, look no further than this: 

Senators press EPA to cut ethanol mandate
As the worst drought in more than 50 years withers the Midwest corn crop, 25 senators urged the Environmental Protection Agency to cut the mandate that requires fuel blenders to add grain-based ethanol to gasoline.

The senators representing 25 percent of the chamber urged EPA chief Lisa Jackson to adjust the Renewable Fuels Standard, or RFS, that requires fuel blenders to mix 13.2 billion gallons of ethanol into gasoline this year.

The mandate rises steadily until peaking at 15 billion gallons per year in 2015 and holding that level through 2022.

The lawmakers blame the mandate for raising the price of corn -- the main feedstock for U.S. ethanol refining -- which threatens to increase feed costs for livestock producers and eventually saddle consumers with higher food costs.

Some 40 percent of the U.S. corn crop is now used to make ethanol, though some byproducts of the process are fed to livestock.
We have a situation where the drought has resulted in crops withering on their vines.  Food prices are expected to soar.  Corn is a staple crop that is used in livestock feed and many other consumer foods; accordingly, the drought will cause corn shortages and result in soaring corn and food prices.   However, in America 40% of the corn we produce is poured into ethanol production.  Why?  Because the EPA continues to mandate more and more ethanol fuel.

In 2011, Congress did refuse to renew ethanol subsidies but it didn't matter because the EPA has the raw and absolute power to mandate ethanol so consumers are paying the price anyway with higher food and fuel prices.

Congress Ends Ethanol Subsidies, Mandates Remain
Congress has declined to extend a federal tax credit for ethanol production, putting an end to a special interest subsidy once viewed as politically untouchable. Nevertheless, federal mandates continue to require U.S. consumers to purchase large quantities of ethanol, which is more expensive than gasoline and delivers fewer miles per gallon.

Three Decades of Subsidies

The federal tax credit existed for more than 30 years, costing U.S. taxpayers nearly $6 billion in 2011 alone. The credit expired at the end of 2011 after Congress resisted political pressure to extend the subsidy. Congress also declined to extend a 54-cent-per-gallon protectionist tariff on imported ethanol.

Mandates Remain

U.S. consumers will still be required to subsidize ethanol indirectly through purchasing mandates imposed by the Energy Policy Act of 2005. The mandates were increased two years later with the enactment of the Energy Independence and Security Act of 2007. The 2007 Act requires consumers to purchase 36 billion gallons of ethanol annually by 2022.

The 2007 Act further mandates that 16 billion gallons come from cellulosic ethanol (made from wood chips, switchgrass, or corn stover) by 2022, even though no company has yet figured out how to produce it in a commercially viable way. As a result, none was produced in 2011, and none is expected to be manufactured this year.
Congress is powerless to do a damn thing.  Meanwhile, Americans need to understand that the cost of just about every food item from corn to chicken to beef will rise dramatically.  It already being reported that livestock farmers lack animal feed and are forced to slaughter their animals which will temporarily flood the market with cheap meat but create massive shortages and high prices in the future.

But their is also an environmental and health aspect to this nightmare.

Corn crop could contain toxic nitrate
With crops drying up and leaving farmers without food for livestock, many farmers around the Heartland are trying to salvage corn stalks destroyed by the drought to use as feed. There is a big problem right now. Damaged corn could contain deadly levels of nitrate. “We have had a really hot dry summer in our area and there is lots of concern in the agriculture and livestock sector about drought stressed corn. We are certainly recommending because of the drought situation that producers think really hard about what they are going to do when it comes to utilizing their corn crop this year if they are going to use it for livestock feed. Basically this corn that we have been testing has been higher in nitrates this year then in years past because of the heat and drought,” said Livestock Specialist Bruce Lane.

Although the majority of the crops are a total loss, options for farmers haven’t dried out completely. Corn is now being salvaged and turned into livestock feed but damaged corn could contain high levels of toxic nitrates that farmers need to be aware of.

Basically this corn that we have been testing has been higher in nitrates this year than in years past because of the heat and drought,” Lane said.

Across Missouri, there has already been reports of livestock being killed by feed high in nitrate. Corn high in nitrate may look identical to corn lower in nitrate. That is why it is important to have the corn tested.
This is obviously a very bad situation.  While drought may be an act of God, churning food into ethanol is a government mandate that is making the situation a whole lot worse.

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