Thursday, May 8, 2008

Obama and Ethanol

I liked very much Obama's response when asked about food prices and ethanol last Sunday on Meet the Press:

MR. RUSSERT: Ethanol, very important to your state, very important to, to Iowa. Here's the reports on that. 'Across the country, ethanol plants are swallowing more and more of the nation's corn crop. This year, about a quarter of U.S. corn will go to feeding ethanol plants instead of poultry or livestock. That has helped farmers ... but it's boosted demand--and prices--for corn at the same time global grain demand is growing. ...

'Legislation providing for ethanol subsidies is being criticized for making food more expensive while gasoline prices continue to climb. Rick Perry,' the governor of Texas, 'has asked the EPA to waive half of the `misguided' ethanol requirements because of rising food costs.'

Would you be willing to change ethanol subsidies or suspend some of these requirements so that people are not using corn for ethanol, but using corn for food and lowering food prices.

SEN. OBAMA: Well, look, we, we've got a serious food problem around the world. We, we've got rising food prices here in the United States. In other countries we're seeing riots because of, because of the lack of food supplies. So this is something that we're going to have to deal with. There are a number of factors that go into this. Changes in climate are contributing. The, the fact that in a lot of countries, you know, we've had problems getting food supplies to poor countries because the wealthier countries have reduced their stockpiles in, in serious ways. And so there're a whole host of reasons why we're seeing problems with food supply. There's no doubt that biofuels may be contributing to it. And what I've said is, my top priority is making sure that people are able to get enough to eat. And if it turns out that we've got to make changes in our ethanol policy to help people get something to eat, then that's got to be the step we take.

Rising food prices in the U.S. and around the world are driven by a number of factors--increased demand in India and China, a worldwide bad harvest, the surge in the cost of fertilizer and transport due to the jump in oil prices, and the demand for biofuels. While ethanol is not the sole culprit, it's the one factor we can control with policy, by reducing the massive U.S. subsidies to ethanol. It's nice to see Obama recognizing this, particularly because he's implicitly acknowledging that he made a mistake in voting for the 2005 energy bill which put much of the subsidies in place.

The big question now: will Obama vote for this year's farm bill, which has more of the same?

1 comment:

Keith Pings said...

He did not explicitly disclaim his 2005 vote. His answer was implications and double speak, but no direct disclaiming of ethanol. His Illinois supporters are deep in Ag.
Ethanol can not make a dent in the US gasoline needs. 20% of our corn provided a couple percent of fuel. Imagine if we convert 100% of all our foods, we could maybe get 10% of our fuel.
Government coercion is again making a mess of the food supply and fuels.