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Now, the chain restaurant industry wants the law repealed.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

Photogallery Pistorius Sentenced, Taken to Prison

Pistorius, convicted of culpable homicide in shooting death of girlfriend Reeva Steenkamp, will likely serve about 10 months of five-year sentence, before completing it under house arrest More

UN to Aid Central Africa in Polio Vaccinations

Synchronized vaccinations will be conducted after Cameroon reports a fifth case of the wild polio virus in its territory More

WHO: Ebola Vaccine May Be in Use by Jan.

WHO assistant director Dr. Marie Paule Kieny says clinical trials of Ebola vaccines are underway or planned in Europe, US and Africa 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.
After Decades of Pressure, Luxembourg Drops Bank Secrecy Rulesi
X
October 21, 2014 12:20 AM
European Union finance ministers have reached a breakthrough agreement that will make it more difficult for tax cheats to hide their money. The new legislation, which had been blocked for years by countries with a reputation as tax havens, was approved last week after Luxembourg and Austria agreed to lift their vetoes. But as Mil Arcega reports, it doesn’t mean tax cheats have run out of places to keep their money hidden.
Video

Video After Decades of Pressure, Luxembourg Drops Bank Secrecy Rules

European Union finance ministers have reached a breakthrough agreement that will make it more difficult for tax cheats to hide their money. The new legislation, which had been blocked for years by countries with a reputation as tax havens, was approved last week after Luxembourg and Austria agreed to lift their vetoes. But as Mil Arcega reports, it doesn’t mean tax cheats have run out of places to keep their money hidden.
Video

Video Kobani Refugees Welcome, Turkey Criticizes, US Airdrop

Residents of Kobani in northern Syria have welcomed the airdrop of weapons, ammunition and medicine to Kurdish militia who are resisting the seizure of their city by Islamic State militants. The Turkish government, however, has criticized the operation. VOA’s Scott Bobb reports from southeastern Turkey, across the border from Kobani.
Video

Video China Political Meeting Seeks to Improve Rule of Law

China’s communist leaders will host a top level political meeting this week, called the Fourth Plenum, and for the first time in the party’s history, rule of law will be a key item on the agenda. Analysts and Chinese media reports say the meetings could see the approval of long-awaited measures aimed at giving courts more independence and include steps to enhance an already aggressive and high-reaching anti-corruption drive. VOA’s Bill Ide has more from Beijing.
Video

Video US ‘Death Cafes’ Put Focus on the Finale

In contemporary America, death usually is a topic to be avoided. But the growing “death café” movement encourages people to discuss their fears and desires about their final moments. VOA’s Jerome Socolovsky reports.
Video

Video Ebola Orphanage Opens in Sierra Leone

Sierra Leone's first Ebola orphanage has opened in the Kailahun district. Hundreds of children orphaned since the beginning of the Ebola outbreak face stigma and rejection with nobody to care for them. Adam Bailes reports for VOA about a new interim care center that's aimed at helping the growing number of children affected by Ebola.
Video

Video Young Nairobi Tech Innovator on 'Track' in Security Business

A 24-year-old technology innovator in Nairobi has invented a tracking device that monitors and secures cars. He has also come up with what he claims is the most robust audio-visual surveillance system yet. As Lenny Ruvaga reports from the Kenyan capital, his innovations are offering alternative security solutions.
Video

Video Latinas Converting to Islam for Identity, Structure

Latinos are one of the fastest growing groups in the Muslim religion. According to the Pew Research Center, about 6 percent of American Muslims are Latino. And a little more than half of new converts are female. VOA’s Carolyn Presutti travelled to Miami, Florida -- where two out of every three residents is Hispanic -- to learn more.
Video

Video Exclusive: American Joins Kurds' Anti-IS Fight

The United States and other Western nations have expressed alarm about their citizens joining Islamic State forces in Syria and Iraq. In a rare counterpoint to the phenomenon, an American has taken up arms with the militants' Syrian Kurdish opponents. Elizabeth Arrott has more in this exclusive profile by VOA Kurdish reporter Zana Omer in Ras al Ayn, Syria.
Video

Video South Korea Confronts Violence Within Military Ranks

Every able-bodied South Korean male between 18 and 35 must serve for 21 to 36 months in the country’s armed forces, depending upon the specific branch. For many, service is a rite of passage to manhood. But there are growing concerns that bullying and violence come along with the tradition. Reporter Jason Strother has more from Seoul.
Video

Video North Carolina Emerges as Key Election Battleground

U.S. congressional midterm elections will be held on November 4th and most political analysts give Republicans an excellent chance to win a majority in the U.S. Senate, which Democrats now control. So what are the issues driving voters in this congressional election year? VOA National Correspondent Jim Malone traveled to North Carolina, one of the most politically competitive states in the country, to find out.
Video

Video Comanche People Maintain Pride in Their Heritage

The Comanche (Indian nation) once were called the “Lords of the Plains,” with an empire that included half the land area of current day Texas, large parts of Oklahoma, New Mexico, Kansas and Colorado.The fierceness and battle prowess of these warriors on horseback delayed the settlement of most of West Texas for four decades. VOA’s Greg Flakus reports from Lawton, Oklahoma, that while their warrior days are over, the 15,000 members of the Comanche Nation remain a proud people.
Video

Video Turkey Campus Attacks Raise Islamic Radicalization Fears

Concerns are growing in Turkey of Islamic radicalization at some universities, after clashes between supporters of the jihadist group Islamic State (IS) or ISIS, and those opposed to the extremists. Pro-jihadist literature is on sale openly on the streets of Istanbul. Critics accuse the government of turning a blind eye to radicalism at home, while Kurds accuse the president of supporting IS - a charge strongly denied. Henry Ridgwell reports from London.

All About America

AppleAndroid

World Currencies

EUR
USD
0.7878
JPY
USD
106.98
GBP
USD
0.6230
CAD
USD
1.1220
INR
USD
61.226

Rates may not be current.