Obama Should Waive the Ethanol Mandate

September 13, 2012 RSS Feed Print

Thomas Pyle is the president of the Institute for Energy Research.

When President Barack Obama was elected, we knew that—based on his previous public statements—we probably wouldn't agree with him on many energy issues. For example, President Obama was on record stating that electricity prices would "necessarily skyrocket" as a result of his plan to reduce carbon dioxide emissions. But if there was one issue where there was the potential for agreement with then-Senator Obama, it was that the renewable fuels standard was bad policy.

We hoped that President Obama would side with his allies in the environmental community and reject the ethanol mandate. Unfortunately he has chosen to side with special interests to support continuing the mandate despite the fact that it increases food and fuel prices.

[See a collection of political cartoons on energy policy.]

The renewable fuels mandate requires refiners to blend billions of gallons of ethanol into gasoline every year. This year, 40 percent of the U.S. corn crop will be turned into ethanol instead of being used as food. This is a real problem, because the drought that has struck much of the national has destroyed one sixth of the U.S. corn crop. This crop destruction has pushed corn prices to record highs. High corn prices raise feed prices for chickens, turkeys, cattle, and hogs. This means that the renewable fuel standard not merely increases corn prices, but the price of other food as well.

We hoped it would be possible for President Obama to reject this harmful policy. After all, the renewable fuels standard was passed by the Bush administration, and it is opposed by environmental and antipoverty groups—groups that are usually his allies. As the international antipoverty group ActionAid USA said, "It is time to rethink ethanol mandates that ensure that cars eat before people."

But so far, the Obama administration has continued to support the renewable fuel mandate. Secretary of Agriculture Tom Vilsack pledged his support for the corn-growers and the ethanol manufactures—the people who benefit from the mandate.

[See a collection of political cartoons on gas prices.]

The Obama administration has an easy way to reduce the pain caused by this mandate in the United States and abroad by waiving the mandate. So far, governors of seven states have asked the Obama administration to waive the mandate as is permitted by Section 211(o)(7) of the Clean Air Act. But instead of acting expeditiously to waive the mandate, the Obama administration has only stalled. First, they established a 30-day comment period to evaluate whether a waiver should be considered, and then they increased the comment period by an additional two weeks. It is important to gather comments, but time is of the essence with high corn prices and continuing drought. Worse, as Marlo Lewis explains here, the deck is stacked against the Obama administration agreeing to the waiver.

It is time for the Obama administration to get on the right side of the ethanol mandate. The mandate helps corn growers and ethanol producers at the expense of the rest of America and the world's poor. To reiterate what ActionAid USA said, "It is time to rethink ethanol mandates that ensure that cars eat before people."