Battle over Biofuels
May 15, 2008
10:13 AM
The volume on the food-vs-fuel debate is getting louder by the day. The issue is complicated, and Chairman Bingaman thinks that it’s wise for folks to catch their breath and get better educated on the complexities before charging ahead with changes. That’s exactly what he and his staff are doing -- talking to experts and trying to better understand this growing concern.
Bingaman agrees that there’s an important and thoughtful discussion to be had about the nexus between energy policy and food policy. But before we can have that conversation, more schooling on the subject is needed. So, Bingaman asked the Secretary of Energy and the Secretary of Agriculture to help answer some key questions:
May 12, 2008
The Honorable Samuel Bodman
Secretary of Energy
The Honorable Ed Schafer
Secretary of Agriculture
Dear Secretary Bodman and Secretary Schafer,
I am concerned about recent suggestions that developed countries’ biofuels policies might be responsible for the global increase in food prices. In the United States, the Renewable Fuel Standard (RFS) was first enacted in the Energy Policy Act of 2005. The RFS, combined with the phase out of MTBE as a blending component for gasoline, led to a rapid increase in production of ethanol and, to a lesser extent, biodiesel. In December 2007, Congress and the President enacted a new and higher RFS that will require 9 billion gallons of renewable fuels to be blended into our fuel supply in 2008.
It is imperative that Congress gain a more full understanding of any link between domestic and international food prices, and the Renewable Fuel Standard. I would like your departments to work together to answer the following questions:
- How has increased U.S. ethanol and biodiesel consumption affected domestic agriculture, and domestic food prices?
- Has increased ethanol and biodiesel consumption in the United States contributed to increased global prices for agricultural goods? And, if so, to what extent?
- How might increased biodiesel consumption, as required by EISA beginning in 2009, affect domestic and international food prices?
- How has increased ethanol and biodiesel consumption affected gasoline and diesel prices?
- What price levels for gasoline and diesel would be expected if biofuels were removed from the market, both in the short- and long-term?
- What affect are biofuels expected to have on gasoline and diesel markets as consumption increases to meet the targets laid out in EISA?
While I recognize that these are complex questions, Congress may be called upon to address related legislative proposals in the near future. I would appreciate receiving your analysis by May 30, 2008.
Thank you for your attention to this important matter.
Sincerely,
[signed Jeff Bingaman]
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