UPDATE GMA, Meat Groups Oppose Boost in Ethanol Blend Percentage

February 2, 2009 06:00 PM
 

via a special arrangement with Informa Economics, Inc.

Food, restaurant and meat groups write EPA administrator to oppose effort to boost ethanol blend percentage

NOTE: This column is copyrighted material, therefore reproduction or retransmission is prohibited under U.S. copyright laws.


The Grocery Manufacturers Association (GMA), the National Restaurant Association and several meat industry groups wrote Environmental Protection Agency (EPA) Administrator Lisa Jackson to oppose increasing the level at which ethanol can be blended into gasoline. Aides to Sens. Chuck Grassley (R-Iowa) and John Thune (R-S.D.) tell me the senators will NOT push an amendment in the Senate's economic stimulus package that some other sources said would boost the blender percentage maximum to 12 percent, from the current 10 percent maximum for non-flex fuel vehicles.

The following is a copy of the letter:


February 2, 2009

Dear Administrator Jackson:

Our organizations strongly oppose proposals to increase the level at which ethanol can be blended into motor gasoline and we urge you to subject these proposals to the most careful analysis.

We strongly support the development of cellulosic ethanol and other advanced biofuels, as well as policies that will help commercialize biofuels that will reduce our reliance on food and feed to produce fuel. However, we are opposed to efforts to increase the amount of biofuel blended into our fuel supplies until sustainable biofuel alternatives are commercially available.

In particular, we believe EPA should not permit gasoline blends that contain more than 10 percent ethanol until:

-- EPA completes a lifecycle assessment of the impacts of biofuels on climate change, as required by the Energy Independence and Security Act of 2007
-- DOE and EPA complete an assessment of the impacts of intermediate blends on engines and certify that there are no performance, safety, or environmental concerns with raising the ten percent blend level
-- Cellulosic and advanced biofuels are commercially available throughout the nation.
-- Congress phases out the ethanol import tariff
-- The completion of the National Academy of Sciences study required under section 203 of the Energy Independence and Security Act of 2007
-- The completion of a robust rulemaking process, including a 180 day public comment period that allows the wide variety of stakeholders impacted by this decision to educate the agency on the impact of the intentional and unintended consequences of the proposed change

As you know, a five-fold increase in the production of conventional biofuels since 2000 - in combination with other factors, such as rising energy prices, poor weather, and global demand - has contributed to volatile commodity prices and a sustained period of commodity and food inflation. Nearly one-third of the 2008 corn crop is being diverted from food and feed to fuel.

Investing in cellulosic and advanced biofuels is one way the Administration can help ensure that we are not pitting our energy security policies against our food and climate security policies. We urge you to oppose proposals to increase the amount of biofuel into our fuel supplies until critical studies are completed and sustainable alternatives are commercially available.

Sincerely,

American Bakers Association
American Beverage Association
American Frozen Food Institute
American Meat Institute
Grocery Manufacturers Association
National Chicken Council
National Turkey Federation
National Pork Producers Council
National Restaurant Association
Snack Food Association


Comments: The groups have picked up with the Obama administration where they left off with the Bush administration relative to their continued opposition to the level of ethanol production. They have also now focused on a provision that the Bush administration was preparing to include in its regulation to implement provisions of the 2007 energy law -- increasing the blend percentage of ethanol. Their continued blame of ethanol production as the culprit for for food price inflation is a consistent theme they used as corn prices rocketed higher in mid-2008. However, observers note that the decline in corn prices since their July peak has not been met with a decline in many food prices. They do cite "other" factors as contributing to the increase in food prices. But at least one of those -- rising energy prices -- has also been largely removed as a factor with oil prices down 68 percent from their high of over $140 per barrel in summer 2008.


NOTE: This column is copyrighted material, therefore reproduction or retransmission is prohibited under U.S. copyright laws.


 

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