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Now, the chain restaurant industry wants the law repealed.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

China May Be Biggest Winner From Ukraine Crisis

Missile sales, oil and gas shipments are among many areas that may drive Beijing and Moscow closer together in coming years More

Obama Faces Chaotic World, Limits of Power

Current foreign policy issues bring into focus challenges for US policymakers who are mindful of Americans' waning appetite for overseas military engagements More

SADC Meeting Lesotho Officials to Resolve Stalemate

Official says regional bloc has been engaged with leaders in Lesotho to resolve political disagreement that led to coup attempt 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.
Ukraine Schools Resume Classes, Donate to Government Forcesi
X
September 02, 2014 12:58 PM
A new school year has started in Ukraine but thousands of children in the war-torn east are unable to attend because of ongoing clashes with pro-Russia rebels. In Ukraine's capital, patriotic education has become the norm along with donations to support injured security forces fighting to take back rebel-held areas. VOA's Daniel Schearf reports from Kyiv.
Video

Video Ukraine Schools Resume Classes, Donate to Government Forces

A new school year has started in Ukraine but thousands of children in the war-torn east are unable to attend because of ongoing clashes with pro-Russia rebels. In Ukraine's capital, patriotic education has become the norm along with donations to support injured security forces fighting to take back rebel-held areas. VOA's Daniel Schearf reports from Kyiv.
Video

Video US Detainees Want Negotiators for Freedom in North Korea

The three U.S. detainees held in North Korea were permitted to speak with foreign media Monday. The government of Kim Jong Un restricted the topics of the questions, and the interviews in Pyongyang were limited to five minutes. Each of the men asked Washington to send a representative to Pyongyang to secure his release. VOA’s Carolyn Presutti has our story.
Video

Video Internet, Technology Offer New Tools for Journalists

The Internet and rapidly evolving technology is quickly changing how people receive news and how journalists deliver it. There are now more ways to tell a story than ever before. One school in Los Angeles is teaching the next generation of journalists with the help of a state-of-the-art newsroom. Elizabeth Lee has this report.
Video

Video Turkmen From Amerli Describe Survival of IS Siege

Over the past few weeks, hundreds of Shi'ite Turkmen have fled the town of Amerli seeking refuge in the northern city of Kirkuk. Despite recent military gains after U.S. airstrikes that were coordinated with Iraqi and Kurdish forces, the situation remains dire for Amerli’s residents. Sebastian Meyer went to Kirkuk for VOA to speak to those who managed to escape.
Video

Video West Africa Ebola Vaccine Trials Possible by Early 2015

A U.S. health agency is speeding up clinical trials of a possible vaccine against the deadly Ebola virus that so far has killed more than 1,500 people in West Africa. If successful, the next step would be a larger trial in countries where the outbreak is occurring. VOA's Carol Pearson has more.
Video

Video Survivors Commemorate 70th Anniversary of Nazi Liquidation of Jewish Ghetto

When the German Nazi army occupied the Polish city of Lodz in 1939, it marked the beginning of a long nightmare for the Jewish community that once made up one third of the population. Roughly 200,000 people were forced into the Lodz Ghetto. Less than 7,000 survived. As VOA’s Kane Farabaugh reports, some survivors gathered at the Union League Club in Chicago on the 70th anniversary of the liquidation of the Lodz Ghetto to remember those who suffered at the hands of the Nazi regime.
Video

Video Cost to Raise Child in US Continues to Rise

The cost of raising a child in the United States continues to rise. In its latest annual report, the U.S. Department of Agriculture says middle income families with a child born in 2013 can expect to spend more than $240,000 before that child turns 18. And sending that child to college more than doubles that amount. VOA’s Deborah Block visited with a couple with one child in Alexandria, Virginia, to learn if the report reflects their lifestyle.
Video

Video Chaotic Afghan Vote Recount Threatens Nation’s Future

Afghanistan’s troubled presidential election continues to be rocked by turmoil as an audit of the ballots drags on. The U.N. says the recount will not be completed before September 10. Observers say repeated disputes and delays are threatening the orderly transfer of power and could have dangerous consequences. VOA correspondent Meredith Buel reports.

AppleAndroid

World Currencies

EUR
USD
0.7537
JPY
USD
103.79
GBP
USD
0.6032
CAD
USD
1.0957
INR
USD
60.522

Rates may not be current.