Thursday, February 24, 2011

Grassley Rightly Say Cut Budget and Ethanol Subsidies

Cutting the deficit is more important than protecting the ethanol industry if it comes to that, says Sen. Chuck Grassley, long the biofuel industry's most powerful ally in Congress.

Grassley said Tuesday that he would vote for a deficit-cutting bill even it includes two House-passed provisions that are intended to slow the ethanol industry's growth.

"As significant as it is to me because I'm a great ethanol fan, if in fact those things were in the bill to cut the deficit ... I'd have to bite the bullet," Grassley said.

A House-passed bill would cut federal spending by $60 billion this year. It includes a measure that would block the U.S. Environmental Protection Agency from increasing the amount of ethanol that can be added to gasoline from 10 percent to 15 percent. A second measure would bar subsidies for retrofitting service stations to sell higher amounts of ethanol.

Full Story

Bill Clinton Says Ethanol Could Spark Riots

Former President Clinton added his voice to those with concerns about U.S. corn usage for ethanol production. In a major speech this morning to USDA’s Outlook Forum, Clinton warned that competition for food stock could impact food prices and spark food riots in developing countries.

Clinton, who now works on international development issues through his New York-based foundation, said that U.S. farmers need to be aware of the developing countries food needs as well as the domestic ethanol market. He acknowledged, however, the role of ethanol in reducing the U.S. dependence on imported fuels.

Clinton’s remarks drew immediate reaction from U.S. ethanol and corn production organizations. A statement from Growth Energy, a trade organization representing biofuel companies, noted, “We appreciate that President Clinton understands the important role American ethanol plays in reducing our dependence on foreign oil and strengthening our national security.

Full Story

Get Rid of Ethanol, To Consume 36 Percent of US Crop in 2011

Ethanol production is outstripping levels mandated by the government, increasing pressure on corn supplies, according to the Agriculture Department.

USDA’s chief economist, Joseph Glauber, said that that ethanol production is currently running at at more than 13.5 billion gallons on an annualized basis, well over the 12.6 billion gallons required this year by the federal renewable fuel standard. “Production margins for ethanol producers remain positive as many plants appear to have forward-priced their corn requirements below the recent market highs,” Glauber said at the USDA’s annual agricultural outlook conference.

Ethanol is likely to consume 5 billion bushels, or 36 percent, of this year’s crop.

Despite soaring corn prices and thin reserves, Agriculture Secretary Tom Vilsack told the conference there was “no reason for us to take the foot off the gas” when it comes to biofuels. “This is a great opportunity, because we can do it all. Those who suggest we cannot just simply are not betting on the American farmer and rancher.” He also pledged to aggressively push to increase U.S. ag exports.

Full Story