The Issue

Government-Mandated Ethanol Production

Over the past few years, federal policymakers have pursued worthy goals of achieving greater energy independence while reducing greenhouse gas emissions.

Unfortunately, their well-intended policies have had dire consequences, including a 233% increase in the price of corn over the last 2 ½ years. The ethanol subsidies, production mandates, protective tariffs and fuel standards provided by the Energy Policy Act of 2005 and a subsequent energy act in 2007 have contributed to skyrocketing corn prices, higher U.S. food prices, a global food crisis, and unintended environmental problems -- all without significantly addressing U.S. energy needs.

The Consequences

Food Price Increases

Numerous converging factors -- such as droughts affecting harvests, improving economic conditions in developing countries and high energy prices -- contribute to the dramatic increase in the price of food for consumers, livestock, poultry, egg and dairy producers, grocery stores, restaurants and many other businesses. Only one factor, however, is within control of federal lawmakers -- the government's ethanol policies.

Environmental Impact

Though originally touted as an environmentally friendly alternative to gasoline, increased ethanol production actually has led to unexpected environmental problems. To meet the congressional mandates, the Environmental Protection Agency relaxed clean air regulations on ethanol production facilities, allowing 250 tons of emissions per year, instead of the 100 tons required for other types of facilities. These issues, among others, are leading scientific researchers to question and recalculate ethanol's benefits.

U.S. Energy Needs

Although energy independence is a worthwhile goal for the United States, ethanol alone cannot solve the energy crisis. Ethanol is not a viable liquid fuel replacement for gasoline, and it is not economically competitive. Further, ethanol demand exceeds the available corn supply.

Near-Term Relief

While federal policymakers continue to debate the effect of ethanol on grain and food prices, states can take action today by seeking a waiver of the grain-based ethanol mandates from the Environmental Protection Agency (EPA). The EPA has authority to waive all or portions of the Renewable Fuel Standard (RFS) mandates for ethanol if it determines that the mandates are severely harming the economy or environment of a state, region or the United States.

In April, Texas Governor Rick Perry became the first governor to seek relief from these mandates, subsidies and protective tariffs by sending a letter to the EPA formally requesting a 50% waiver of RFS mandates for ethanol produced from grain. Since he submitted his request, more than 23,000 people have sent letters to the EPA in support of Governor Perry’s actions through this Web site. These 23,000 letters from across the country demonstrate broad-based support from consumers, livestock and poultry industries, restaurants, supermarkets, and others concerned with food prices, the economy, world hunger, and the environment.