Bureau of National Affairs: Citing Food Prices, Virginia Senators Call For `Temporary Relief' From Biofuels Mandate
Press Release
Bureau of National Affairs: Citing Food Prices, Virginia Senators Call For `Temporary Relief' From Biofuels Mandate
Virginia Sens. Jim Webb (D) and John Warner (R) wrote to Environmental Protection Agency Administrator Stephen Johnson Aug. 4 to support a temporary waiver of the renewable fuels standard under consideration by the agency.
"While the rising costs of food and commodity prices are the result of many factors, it is clear that the RFS has played a role in the dramatic increase in commodity prices," Warner and Webb wrote in the letter.
"We encourage the EPA to give all favorable consideration to proposals that would provide temporary relief to the RFS and allow time for commodity prices to stabilize," they said.
EPA is considering a waiver, requested April 25 by Texas Gov. Rick Perry (R), of the renewable fuels standard for 2008. Perry requested that EPA move the standard from 9 billion gallons required in 2008 back to the 4.5 billion gallons required in 2007. The content level was increased by Congress in the Energy Independence and Security Act (Pub. L. 110-140) in 2007.
The law requires the renewable fuel content in motor fuels to increase to 36 billion gallons in 2022. Johnson said July 22 that the agency needed additional time to evaluate the request (141 DER A-26, 7/23/08).
Perry cited rising food prices as the reason for requesting the waiver. A large increase in the production of corn-based ethanol has coincided with a steep rise in the price of corn.
Other Commodity Prices Also Affected.
Warner and Webb said the biofuels mandate also is affecting other food commodity prices. "As farmers shift into higher levels of corn production to meet the RFS mandate, additional pressures have been brought to bear on the prices of wheat, soybeans, rice, and other food commodities," they said in their letter to EPA.
"These market shifts coupled with rising energy prices and poor weather conditions have had a ripple effect on global food prices that is being felt by all," the added. "However, the rising costs of food have been felt especially by low-income individuals and persons living on fixed incomes."
However, Joseph Glauber, chief economist for the Department of Agriculture, told the Senate Energy and Natural Resources Committee in June that, while food prices have risen, the effect of biofuels production on food prices has been minimal (114 DER A-42, 6/13/08).
"At this time, the expansion in biofuel production in the United States would appear to be a relatively modest contributor to food price inflation globally and in the United States," Glauber said in his prepared remarks.
In addition, Energy Secretary Samuel Bodman and Agriculture Secretary Ed Schafer wrote June 11 in a letter to Senate Energy Committee Chairman Jeff Bingaman (D-N.M.) that without biofuels, the United States would have to use 7.2 billion gallons more gasoline in 2008 to meet current travel demand, which would drive up gasoline prices by about 20 cents to 35 cents per gallon.
The World Bank, on the other hand, released a report July 28 saying that biofuels are responsible for 70 percent to 75 percent of the worldwide increase in food prices since 2002 (145 DER A-27, 7/29/08).
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