Ethanol: List of Mandate’s Victims Keeps Growing
Katie Tubb /
Bring a rancher, a motorcyclist, a governor, a poultry producer, a gas station manager, and a restaurant owner together around a table, and they probably wouldn’t have much in common regarding their day-to-day lives. But they have all joined the growing ranks of people dissatisfied with the renewable fuel standard.
The most recent outspoken discontent is the National Council of Chain Restaurants (NCCR). The federal ethanol mandate costs each restaurant $18,000 a year because of the higher food prices, according to a newly released study by PricewaterhouseCoopers prepared for the NCCR.
The Energy Policy Act of 2005 mandated that Americans use 15 billion gallons of ethanol in their gasoline by 2015. That’s 5.3 billion bushels worth of corn being diverted from food to fuel.
While the promises of lowered greenhouse gas emissions and lower gas prices have yet to materialize, Americans continue to face real consequences from the ethanol mandate. This summer’s drought has cast these consequences in sharp relief.
Higher corn prices directly affect the price of the food we buy in grocery stores and make up the lifeblood of restaurants—products from breads and margarine to less immediately obvious ones like ice cream and corn-fed beef, chicken, and pork.
But as NCCR executive director Rob Green aptly states, the problem is not ethanol itself:
The chain-restaurant industry isn’t anti-ethanol. We simply believe it is time for the ethanol industry to stand on its own, as restaurant owners and operators do every day. Congress and the president should repeal the misguided Renewable Fuel Standard and allow the free market to allocate corn to its most highly valued use—not one imposed by a government that forces food to be burned for inefficient fuel.
The problem is the 2005 mandate. Whether it intends to or not, the mandate has and continues to create winners and losers. The clear winners are bioengineering companies, corn farmers, and ethanol producers, all of whom have a guaranteed (mandated) market regardless of the market price or real demand for their product.
But the ranks of ethanol mandate losers are getting bigger. The EPA should not treat them as a dispensable rank and file. Temporarily waiving the mandate would only cause uncertainty. Instead, it should abandon the mandate entirely.