By Senator Chuck Grassley –
It’s a critically important time for the bioenergy industry, and particularly the advanced biofuels producers. I’m a long-time supporter of efforts to diversify our energy supply with clean-burning, homegrown renewable energy. Iowa has been blessed with rich, productive soil and abundant agricultural resources.
Iowa is a leader is feeding our nation and the world. We lead the nation in the production of corn, soybeans, hogs and eggs.
Iowa also leads the nation in renewable energy production. It’s the largest producer of alternative fuels. It has the capacity to produce more than four billion gallons of clean-burning ethanol and biodiesel.
And, Iowa is second in the nation in wind energy production.
The state of Iowa is proving that our farmers can simultaneously produce the food, feed, fuel and fiber that our country needs.
During the past 30 years, we’ve witnessed tremendous growth in the renewable biofuel industry. It has developed from almost non-existent in 1980 to a significant contributor to our transportation fuel today.
Because of the success of America’s biofuel producers, renewable fuels now account for ten percent of our nation’s transportation fuel supply.
Homegrown biofuels are extending our fuel supply and lowering prices at the pump for consumers.
Biofuels are reducing our dependence on finite fossil fuels. They keep more money at home rather than sending it to Persian Gulf countries that may wish to do us harm.
And, it’s primarily due to the success of the Renewable Fuel Standard.
There are important facts about this program that need to be mentioned at every opportunity.
First, biofuels and the RFS are not increasing prices at the pump for consumers. The opposite is true – they’re saving consumers’ money.
Numerous academic studies have concluded over the past few years that the increasing use of ethanol and biofuels reduces prices at the pump for consumers.
Second, the argument that we’re diverting food to fuel and subsequently driving up the cost for groceries has been proven to be what I’ve known all along — hogwash.
The farm value of corn in retail food prices is so insignificant that it’s hard to believe this argument was ever made with a straight face.
Third, biofuels are contributing to cleaner air and a cleaner environment. Today’s biofuels are reducing greenhouse gas emissions compared to petroleum.
Fourth, today’s biofuels are not “diverting” commodities from animal or livestock use. The fact is, grain production today is as efficient as it has ever been.
We now produce an average of 165 bushels of corn per acre. We produce a 13 billion bushel crop on about the same amount of land that produced fewer than six billion bushels in 1980.
Ethanol growth has led to significantly larger corn crops. That’s benefitted all users of corn.
The threat to the RFS has been consistent and well-funded by industries threatened by the success – primarily Big Oil.
Since the inception of the RFS, opponents of clean-burning homegrown fuels have been trying to undermine the RFS at every turn. And I’ve fought them at every turn.
The success of these efforts depends largely on the intensity of the misinformation campaign that is waged against the domestic producers of alternative fuels.
It’s imperative that the domestic biofuels producers unite in combating this misinformation and making clear to all Americans the benefit of the fuels from these producers.
In this regard, we must insist that any discussion of the RFS be based on facts.
Many of the discussions taking place begin with the biased starting point that the RFS is broken beyond repair. The argument is that the standard either needs to be substantially overhauled or repealed altogether.
I dismiss both of those notions.
Opponents argue that the RFS never envisioned biofuel blends above 10 percent. That premise is completely wrong.
Everyone who supported the creation of the RFS had to know, that at some point, blending of biofuels would necessarily be greater than 10 percent.
That’s why biofuel producers took the initiative to seek approval from EPA for E15. After many months of review and millions of test miles driven, the fuel was approved for use in most cars.
Big Oil and petroleum refiners have also known since 2007 that higher blends would be necessary to meet the mandate.
But instead of making the necessary investments in infrastructure, they’ve used every avenue to fight higher blends. While they’ve put up every roadblock possible to higher blends, they now blame the inability to handle higher blends as a reason to repeal the RFS.
The oil industry created this problem. Now they’re trying to use this problem to undermine the RFS. I won’t let them get away with it.
The success of the RFS is just beginning.
The promise of the next generation of advanced biofuels depends upon the defense of today’s biofuels and maintaining the integrity of the RFS.
When Congress expanded the RFS in 2007, it rightly put the focus on developing advanced and cellulosic biofuels.
Billions of dollars have been invested in new technologies to fulfill this policy goal. In Iowa, plants in Emmetsburg, Nevada, Shenandoah and across the state are being developed to move us closer to a new breed of biofuels.
Defending and maintaining the integrity of the RFS is critical, especially for advanced and cellulosic biofuels producers.
Most experts agree — without the RFS, there would be no cellulosic and advanced biofuels.
That’s why I’ve fought to maintain the RFS, whether the threat comes from Big Oil, Big Food, oil refiners and sometimes even the EPA.
This new generation of biofuels will be coming online soon. It will have even greater environmental benefit. It’ll come from sources like algae, wood wastes, crop residues and grasses. It’ll produce drop-in fuels, butanol, renewable diesel and jet fuel.
But it won’t materialize if we abandon the RFS. Even the discussions of modifying the RFS have had a chilling effect on those developing innovative new technologies.
The RFS has already led to significant environmental, economic and national security gains. The promise of the next generation of biofuels will add even more.
But that’s only if we protect the existing supportive policies and work to provide greater certainty for this burgeoning industry. I intend to do just that.
I know that repealing the RFS would harm the environment, our balance of trade, and rural economies.
It would surely cost jobs.
Once the facts are made abundantly clear, I hope that efforts to undermine the Renewable Fuel Standard will fail.
7 thoughts on “Grassley: “Hogwash” that ethanol production in Iowa driving up food costs”
This story and the comments attached identify many of the interests in play on this issue.
First, you have the ag industry which continually looks for new uses for its products and ways to maximize output & income.
Second, the input suppliers (seed, fertilizer, fuel, equipment) which continually looks for new products to sell into ag.
Third, the environmentalists which drove the emissions reduction agenda, the make-up of fuels and now ground water run-off concerns, etc.
Forth, politicians who continually keep trying to stay in front of any issues that might play into their success at the polls.
All that said ethanol came about initially, as an oxygenator of gasoline to reduce emissions. The oil companies had created MTBE’s to do that job but got sidetracked when it was determined MTBE’s were carcinogenic and had the nasty habit of ruining ground water if there was a leak. EPA switched to ethanol as it would do the job and not destroy the environment if leaked. The amount needed to do the job was in the 4% range.
Ag then jumped onto the band wagon and got the Renewable Fuels Standard which required a 10% minimum. This created the opportunity for the ethanol industry and DDG’s were produced as a result. Once underway, the ethanol industry is seeking to seize more opportunities in the fuel arena so Grassley and others want to keep RFS as a foundation to other bio fuels.
Yields are up markedly in part to better hybrids and the ability to more closely manage ag due to increasingly sophisticated equipment.
So back to the original question – is ethanol production driving up the costs of food?
Hard to determine clearly. On a gut level I think it may be pushing up the cost of inputs into the human food chain, but how much is a guess at this point.
DDGs is what is left after producing ethanol. It is fed to animals. It is higher in protein than whole grain corn. It costs less than milled corn as a feed to animals. It is better digested in some animals. Corn oil, which is extracted at a few local plants is being used to produce biodiesel.
So you are getting multiple products from that bushel of corn.
On the producer side, costs of inputs have gone up following the price of crude and refined products. Fertilizer, insecticide, seeds all cost a lot more than they used to.
If ethanol were not in the picture, large domestic buyers of corn would control the local market. Historically, at times they paid less than it cost farmers to grow it. Lots of people turned to the export market, in hopes of making enough to cover costs.
I agree that his statements are hog wash. What mental midget ever though it would be a good idea to BURN our food. The price of corn has gone from $2.00 a bushel to $4.00 and over in just a couple of years. One third of the people in this world are starving and we are burning their food. That doesn’t even begin to take into account the amount of good fresh water the are polluting. I think I heard somewhere that it takes 20 gallons of water to make one gallon of ethanol. Not a good idea to be poring all that good water down the drain.
HOGWASH chuck – how about the 100,s of millions dollar subsides these companies recieve from the hard working private citizens. Hogwash to krap fuel.
If you take 40percent of the corn crop for ethanol the cows have 40 percent less chance of eating cheaper so that hamburger or steak cost 40 percent less. Of course it does just ask good old chuck his math indicates he was educated in Iowa. Ooooooooooo yes I forgot he is a politician first!!! And how’s that gas mileage verses regular gas mileage working for you chuckle!!!
Do you know what DDG or Modified DDG is?
Do you know what dilligaf is?