News / Economy

Burger Makers Fight to Repeal Biofuel Law

Burger Makers Fight to Repeal Biofuel Lawi
|| 0:00:00
X
Steve Baragona
December 04, 2012 3:40 PM
Big American fast-food chains have entered the fight against an alternative fuel policy that critics say is pushing up the price of food worldwide. In a new lobbying effort, they are calling on Congress to repeal a law that requires gasoline to contain ethanol, a fuel produced mainly from corn. VOA's Steve Baragona reports.

Burger Makers Fight to Repeal Biofuel Law

Big American fast-food chains have entered the fight against an alternative fuel policy that critics say is pushing up the price of food worldwide.

In a new lobbying effort, they are calling on Congress to repeal a law that requires gasoline to contain ethanol, a fuel produced mainly from corn.

Corn competition

When you drive up to Wendy's or other fast-food chains in the U.S., you are consuming corn in at least two ways.

The chicken or hamburger in your meal comes from an animal raised on corn.

Since the fuel in your car is 10 percent ethanol, which is made from corn, the animal and the automobile are competing for the same grain.

“Ethanol diverts a significant share of the US corn crop each year," says University of Missouri economist Pat Westhoff. "And, by doing so, it makes corn prices higher than they otherwise would be.”

Higher corn prices mean higher meat prices.

Ethanol has consumed a growing share of the corn market since a 2005 law required it be added to U.S. gasoline.

Now, the chain restaurant industry wants the law repealed.

At a recent news conference,  franchise owner Ed Anderson said that the mandate costs each of his four Wendy’s restaurants up to $30,000 per year.

“Congress passed the ethanol mandate, and now restaurants are being hit at a time our economy can’t afford it,” he said.

Questionable impact

But not everyone agrees the law is driving up food prices.

They note that even in this year’s record-breaking drought, when corn prices hit new highs, the federal government declined to waive the law. Studies by the U.S. Environmental Protection Agency (EPA) found doing so would only change the price of corn by a few cents.

“It moves three or four cents on a sneeze on the floor of the Chicago Board of Trade,"  says Renewable Fuels Association chief Bob Dinneen. "So waiving this program wasn’t going to provide any relief. Ethanol was not driving the price increase. There was no reason to waive the program.”

Dinneen says ethanol is reducing dependence on foreign oil and holding down the price of gasoline.  

Little difference?

Ethanol is typically cheaper than petroleum. Fuel makers now add it to gasoline regardless of the law. So waiving the mandate might not not matter much in the short term.

“We don’t think there would be a large impact on the prices of ethanol and the prices of corn and the amount of corn that’s being used for ethanol production in the very short term," says Pat Westhoff. "If those policies were to change forever and ever, then there might be larger changes in front of us.”

Current policy calls for increased use of ethanol. Westhoff says that will require even more corn and put more pressure on food prices.

That is, unless other biofuels take the place of corn ethanol. The Renewable Fuels Association’s Bob Dinneen says fuels not made from food crops are coming - thanks to corn ethanol.

“The grain ethanol industry has built the markets, it’s established the technology, it’s created the policies that are allowing those other industries to come into commercial scale," he says. "We are the foundation on which those new fuels will materialize.”

But until those fuels do materialize, the tension between burgers and biofuels will continue.

You May Like

Uganda Court Annuls Anti-Gay Law

Court says law was passed in parliament without enough members present for a full quorum More

Multimedia Thailand Makes Efforts to Improve Conditions for Migrant Laborers

In Thailand, its not uncommon for parents to bring their children to work; one company, in-collaboration with other organizations, address safety concerns More

In Indonesia, Jihad Video Raises Concern

Video calls on Indonesians to join Islamic State of Iraq and the Levant, ISIL More

This forum has been closed.
Comment Sorting
Comments
     
by: JC from: USA
December 06, 2012 12:59 PM
Ethanol consumes is over half of the US corn industry. Removing it will change the price by a few pennies? It's a flat out lie by the industry and industry funded bureaucrats with an agenda.


by: WILLIAM from: ARGENTINA
December 05, 2012 7:06 PM
Why not to utilize hybrid fuel trucks ofered to American fast foods chains, or the hybrid devices for their vehicles, to reduce costs of industrial fast foods productions, and the respective chains products to customers, just until the next age of fuels, as shale American gas can be saled and propeled to businesses cars and trucks, gas what is as much, cheaper than other bio fuels?

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
In Thailand, Some Efforts to Improve Conditions For Migrant Laborersi
X
Steve Herman
August 01, 2014 6:22 PM
Thailand has been facing increasing international scrutiny as a hub of human trafficking and slave labor. Some of the kingdom’s companies are striving to improve working conditions, especially for the millions of migrant laborers from surrounding countries. VOA Correspondent Steve Herman in Bangkok takes a look at one initiative for children at construction sites
Video

Video In Thailand, Some Efforts to Improve Conditions For Migrant Laborers

Thailand has been facing increasing international scrutiny as a hub of human trafficking and slave labor. Some of the kingdom’s companies are striving to improve working conditions, especially for the millions of migrant laborers from surrounding countries. VOA Correspondent Steve Herman in Bangkok takes a look at one initiative for children at construction sites
Video

Video Public Raises its Voice on Power Plant Pollution

In the United States, proposed rules to cut pollution from the nation’s 600 coal-fired power plants are generating a heated debate. The U.S. Environmental Protection Agency, charged with writing and implementing the plan, has already received 300,000 written comments. As VOA’s Rosanne Skirble reports, another 1,600 people are lining up this week at EPA headquarters and at satellite offices around the country to give their testimony in person.
Video

Video Information War Rages Alongside Real One in Ukraine

The downing of the Malaysian airliner two weeks ago, and allegations that Russians are shelling Ukrainian troops across the border, have moved the information war swirling around the Ukrainian conflict to a new level. VOA's Al Pessin reports from Kyiv.
Video

Video When Fighting Eases, Gazans Line Up at Bakeries

When there is a lull in the conflict in Gaza, residents who have been hunkered down in their apartments rush out to stock up on food and other necessities. Probably the most important destination is the local bakery. VOA’s Scott Bobb reports from Gaza City.
Video

Video China Investigates Powerful Former Security Chief

The public in China is welcoming the Communist Party's decision to investigate one of the country's once most powerful politicians, former domestic security chief Zhou Yongkang. Analysts say the move by President Xi Jinping is not only an effort to win more support for the party, but an essential step to furthering much needed economic reforms and removing those who would stand in the way of change. VOA's Bill Ide has more from Beijing.
Video

Video US-Funded Program Offers Honduran Children Alternative to Illegal Immigration

President Obama and Central American leaders recently agreed to come up with a plan to address poverty and crime in the region that is fueling the surge of young migrants trying to illegally enter the United States. VOA’s Brian Padden looks at one such program in Honduras - funded in part by the United States - which gives street kids not only food and safety but a chance for a better life without, crossing the border.
Video

Video 'Fab Lab' Igniting Revolution in Kenya

The University of Nairobi’s Science and Technology Park is banking on 3-D prototyping to spark a manufacturing revolution in the country. Lenny Ruvaga has more for from Nairobi's so-called “FabLab” for VOA.
Video

Video Immigrant Influx on Texas Border Heats Up Political Debate

Immigrants from Central America continue to cross the U.S.-Mexico border in south Texas, seeking asylum in the United States, as officials grapple with ways to deal with the problem and provide shelter for thousands of minors among the illegal border crossers. As VOA's Greg Flakus reports from Houston, the issue is complicated by internal U.S. politics and U.S. relations with the troubled nations that immigrants are fleeing.

AppleAndroid

World Currencies

EUR
USD
0.7305
JPY
USD
101.53
GBP
USD
0.5830
CAD
USD
1.0656
INR
USD
60.075

Rates may not be current.