Congressman Barton Outlines Plan to Lower Food and Fuel Prices

Statement

Congressman Barton outlines plan to lower food and fuel prices

U.S. Representative Joe Barton (R-Arlington) outlined his plan to lower food and fuel prices during a subcommittee hearing today on Capitol Hill.

He urged fellow lawmakers to rollback federally imposed Renewable Fuel mandates while the impact on food, fuel and the economy is studied. A majority of the ethanol produced today comes from corn and a growing chorus of experts now blame rising costs from the gas pump to the grocery store on the fact that food is now being turned into fuel.

Congressman Barton issued the following statement today as part of an Energy and Air Quality Subcommittee hearing entitled, "The Renewable Fuels Standard: Issues, Implementation, and Opportunities":

"Mr. Chairman, I commend you for holding this hearing today to help us understand how our domestic and global food policies and energy policies impact each other.

"Let's start with the high cost of natural gas and its impact on farm production. Natural gas is the key feedstock in every nitrogen fertilizer, including anhydrous ammonia as well as all the dry and liquid fertilizers. Industrial natural gas prices have gone from $4.45 per thousand cubic feet in 2000 to $8.94 today. During the same period, nitrogen fertilizer has gone from $131 per ton to $277 per ton. Also, more than half of our U.S.-based fertilizer production plants have closed since 2000, as new ones pop up in places such as Russia, Egypt, and elsewhere in the Middle East. If a few more American plants close we will become as dependent on foreign fertilizer—and therefore our food supply—as we are on foreign energy.

"I know two reasons why natural gas is so expensive. First, we severely limit domestic production by keeping the huge gas fields in Alaska and the Outer Continental Shelf off limits. We are the only developed country in the world that does this, and it is costing us dearly. Second, we use too much gas to produce electricity because we have made it so difficult to build coal and nuclear plants.

"Gas is great for heating homes and drying clothes, and it's a necessary ingredient in many chemical processes, including fertilizer production. But when it's used for making electric power, the cost is high and it drives other natural gas users out of the market. They simply can't afford to compete against the electricity generators.

"There is another way that our energy policy makes food more expensive and will continue to drive food prices up higher if we don't take corrective action. The renewable fuel mandate enacted just last December diverts vast acreage from food production to fuel production. It also explains the spike in corn prices from $2 a bushel just a couple years ago to the record price of over $6 a bushel last month. Farmers who had grown wheat to feed a growing nation and a hungry world are switching to corn because we've legislated it into profitability.

"To accomplish a rational energy and food policy, I believe we need to focus incentives on cellulosic ethanol, coal-to-liquid, butanol, and compressed natural gas. All these fuels would alleviate our dependence on unreliable foreign energy without squeezing our food supply.

"The high cost of food is also a worry at millions of American dinner tables right now because it's one third of the gasoline and housing cost triple whammy. And it's worse around a hungry world where expensive food means no food at all. Neither our constituents nor our consciences can tolerate this much longer.

"Mr. Chairman, I realize that putting the brakes on a bad ethanol policy is a big lift politically and could cause some localized economic disruption and logistical problems. I'm going to be looking at legislation to simply restore the renewable fuel standard that we enacted in EPAct 2005 while we study its impact on food, fuel, and other economic factors. We need the Administration to use the results of that study to recommend to Congress appropriate adjustments, if any. Meanwhile, my governor, Rick Perry, has asked EPA Administrator Johnson to waive 50 percent of the RFS mandate because its net cost to Texas is now measured in billions of dollars. I'm hearing from cattlemen in my district and across Texas. While they share the concerns of others in agriculture over fuel and fertilizer prices my constituents in animal agriculture cite corn prices as their number one concern.

"Mr. Chairman, I was not a big fan of the RFS when we included it in EPAct 2005, but I must acknowledge that it was worked out in a conference committee involving members from both parties and both bodies. That was noticeably less true of the mandates in the 2007 law, as nearly everybody here will remember. Let's end the overreach and enact an interim policy that our constituents and hungry people around the world can live with as we determine the realistic contribution that we can gain from renewable fuels.

Source