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A simple logical evaluation of the chain of events set in motion by the governmental mandate to stick ethanol in our gas tanks results in an inflation in a variety of consumer prices including the food we eat to fuel ourselves.
And yet the EPA is coming back with a fresh take on an old tapdance around the issue, saying that it isn't happening. From NPR:
Even though corn is in short supply, because of this summer's historic drought, the EPA just announced that it will keep in place a federal rule that requires more than a third of the nation's corn to be converted into ethanol and blended into gasoline.A sign on the pump advertises the ethanol content of the gasoline as a motorist reaches for the gas pump in his truck at a filling station in Bellmead, Texas.LM Otero/AP
Meat producers and anti-hunger advocates were outraged. Because the law protects the flow of corn into fuel, they say, it drives corn prices higher for everyone else. Kristin Sundell, from ActionAid USA, predicted that "people around the world will go hungry due to spiking food prices while the EPA stubbornly clings to its misplaced faith in biofuels as a sustainable energy solution." A coalition of dairy, poultry, and livestock producers asked "how many more jobs and family farms have to be lost before we change this misguided policy."
Critics and supporters of the "ethanol mandate" both believe that, for better or worse, the law matters. So the most surprising thing about the EPA's announcement today was that it flew in the face of that belief. The agency rolled out economic analyses showing, essentially, that the federal rules don't actually accomplish anything. According to the EPA, gasoline companies would use just as much ethanol even without a federal rule. They're doing it because a) ethanol still is an affordable additive to gasoline, and b) even if ethanol got more expensive, oil companies can't easily reconfigure their refineries to replace ethanol with something else.
Two leading economists who've studied this question — Bruce Babcock at Iowa State University and Wally Tyner at Purdue — agree with the EPA's analysis. "If you look at where gas prices are right now, it looks like it's in the interest of the gas companies to use ethanol," says Babcock.
NPR blames higher prices for food on your use of a car, of course, and the drought. While the later is most certainly true. But to claim that the ethanol mandate has nothing to do with the spike is naivete.