Letter to Stephen Johnson, Administrator of the Environmental Protection Agency, Re: Flexibility in Ethanol Mandates to Lower Food Prices

Enzi, Barrasso urge flexibility in ethanol mandates to lower food prices

As Americans contend with government mandates to blend ethanol into the nation's fuel supplies, prices are simultaneously increasing at the grocery store at an alarming rate. U.S. Senators Mike Enzi and John Barrasso, both R-Wyo., are working to decrease the impacts of increased ethanol usage and Americans' increasing grocery bills and are urging the Environmental Protection Agency (EPA) to take steps to ease the food inflation.

In a letter to the Administrator of the EPA, Enzi, Barrasso and 22 other senators laid out the severe situation of high food prices and the link to these high prices with the mandated increase in ethanol use. Enzi and Barrasso also think the impact of corn prices is especially difficult for Wyoming's ranching families and their pocket books are hit at the grocery store and the feed bin.

"American families are feeling the financial strain of these food-to-fuel mandates in the grocery aisle and are growing concerned about the emerging environmental concerns of growing corn-based ethanol," the senators wrote to the EPA in an April 24 letter. "It is essential for the EPA to respond quickly to the consequences of these mandates."

By 2015 fuel marketers are required to blend15 billion gallons of corn ethanol into the nation's fuel supplies. The senators asked the EPA to take advantage of sections of the law written purposely to provide authority to the EPA to waive ethanol mandates outlined in the Energy Independence and Security Act of 2007 (EISA) for the benefit of all Americans.

"Congress made the mandates in the EISA different from existing mandates to provide flexibility and to encourage innovation in advanced and cellulosic fuels. We believe today's circumstances merit the use of this flexibility," the senators wrote.

The Bureau of Labor Statistics reports that food inflation is rising by 4.9 percent and other studies predict that food inflation could increase by 7 to 8 percent in the next few years.

A copy of the letter is below.

May 2, 2008

The Honorable Stephen Johnson
Environmental Protection Agency
Ariel Rios Building
1200 Pennsylvania Avenue, N.W.
Washington, DC 20460

Dear Administrator Johnson:

We are writing to convey the frustrations of consumers and animal agriculture producers about the consequences of food-to-fuel mandates that the U.S. Environmental Protection Agency (EPA) is currently implementing and to inquire about the pending rule-making process for the Energy Independence and Security Act of 2007 (EISA).

EISA essentially requires fuel marketers to blend 15 billion gallons of corn ethanol and directs 1 billion gallons of bio-diesel into the nation's fuel supplies by 2015. To meet this requirement, 30 percent of our corn crop and our vegetable oils will have to be diverted into our fuel supplies, severely impacting food and feed prices. Congress gave the EPA authority to waive all or portions of these mandates, as well as authority to structure the mandates for the benefit of all Americans. We believe the EPA should begin the process of examining alternatives that ease the severe economic and emerging environmental consequences that are developing in America as a result of the mandate.

We are very concerned that food-to-fuel mandates and subsidies have contributed to higher domestic and global food prices. According to USDA, 25 percent of America's corn crop was diverted to produce ethanol in 2007, and 30 to 35 percent of our corn will be diverted in 2008. This problem will only be compounded as we move towards 2015 with ever increasing mandates. Further, farmers are supplanting other grains with corn, thereby, decreasing supply and increasing prices of numerous agriculture products. Although many factors may contribute to high food costs, food-to-fuel mandates are the only factors that can be reconsidered in light of changing circumstances.

American families are feeling the financial strain of these food-to-fuel mandates in the grocery aisle and are growing concerned about the emerging environmental concerns of growing corn-based ethanol. It is essential for the EPA to respond quickly to the consequences of these mandates. Congress made the mandates in the EISA different from existing mandates to provide flexibility and to encourage innovation in advanced and cellulosic fuels. We believe today's circumstances merit the use of this flexibility.

The Bureau of Labor Statistics reports that food inflation is rising by 4.9 percent and other studies predict that food inflation could increase by 7 to 8 percent in the next few years. We are concerned that inflationary pressure on food will only escalate in the coming months and could be further complicated by severe weather. We urge you to take the forgoing into consideration as part of your current rule making process and ask that you provide us with a status report at your earliest convenience.

Sincerely,

Kay Bailey Hutchison, R-Texas
John McCain, R-Ariz.
Mike Enzi, R-Wyo.
John Barrasso, R-Wyo.
Wayne Allard, R-Colo.
Robert Bennett, R-Utah
Richard Burr, R-N.C.
Susan Collins, R-Maine
Bob Corker, R-Tenn.
John Cornyn, R-Texas
Mike Crapo, R-Idaho
Jim DeMint, R-S.C.
Elizabeth Dole, R-N.C.
John Ensign, R-Nev.
Lindsey Graham, R-S.C.
Orrin Hatch, R-Utah
James Inhofe, R-Okla.
Johnny Isakson, R-Ga.
Lisa Murkowski, R-Alaska
Richard Shelby, R-Ala.
Ted Stevens, R-Alaska
John Sununu, R-N.H.
David Vitter, R-La.
Roger Wicker, R-Miss.