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Now, the chain restaurant industry wants the law repealed.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

Multimedia Social Media Documenting, Not Driving, Hong Kong Protests

Unlike in Arab Spring uprisings, pro-democracy protesters in Hong Kong aren't relying on Twitter and Facebook to organize, but social media still plays a role More

Analysis: Occupy Central Not Exactly Hong Kong’s Tiananmen

VOA's former Hong Kong, Beijing correspondent compares and contrasts 1989 Tiananmen Square protest with what is now happening in Hong Kong More

Bambari Hospital a Lone Place of Help in Violence-Plagued CAR

Only establishment still functioning in CAR's second city is main hospital 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.
The Legacy of Jimmy Carter: The Preacher from Plainsi
X
October 01, 2014 10:45 AM
It is common in the United States to see tourists flock to sites associated with America's presidents. Some are privately owned and others are run by the National Park Service or the National Archives -- but most have helped draw business and people into the towns and cities where they are located. As VOA’s Kane Farabaugh reports, there is one particular presidential hometown that is unique in what it has to offer those who make the trip.
Video

Video The Legacy of Jimmy Carter: The Preacher from Plains

It is common in the United States to see tourists flock to sites associated with America's presidents. Some are privately owned and others are run by the National Park Service or the National Archives -- but most have helped draw business and people into the towns and cities where they are located. As VOA’s Kane Farabaugh reports, there is one particular presidential hometown that is unique in what it has to offer those who make the trip.
Video

Video Hong Kong Protests Draw New Supporters on National Holiday

On the 65th anniversary of the founding of Communist China, Hong Kong protesters are hoping to stage the largest pro-democracy demonstration since the 1989 Tiananmen protests. VOA's Brian Padden visited one of the protest sites mid-day, when the atmosphere was calm and where the supporters were enthusiastic about joining what they are calling the umbrella revolution.
Video

Video India's PM Continues First US Visit

India's prime minister is on his first visit to Washington, to strengthen political and economic ties between the world's oldest and the world biggest democracies. He came to the U.S. capital from New York, the first stop on his five-day visit to the country that denied him an entry visa in the past. From Washington, Zlatica Hoke reports Modi seemed most focused on attracting foreign investment and trade to increase job opportunities for his people.
Video

Video Malaysia Struggles to Stop People Joining Jihad

Malaysian authorities say militant groups like the so-called "Islamic State" have used social media to entice at least three dozen Malaysian Muslims to fight in what they call "jihad" in Syria and Iraq. As Mahi Ramkrishnan reports from Kuala Lumpur, counterterrorism police are deeply worried about what could happen when these militants return home.
Video

Video Could US Have Done More to Stop Rise of Islamic State?

President Obama says airstrikes against Islamic State militants in Syria will likely continue for some time because, in his words, "there is a cancer that has grown for too long." So what if President Obama had acted sooner in Syria to arm more-moderate opponents of both the Islamic State and the Syrian government? VOA State Department Correspondent Scott Stearns reports from the United Nations.
Video

Video Treasure Hunters Seek 'Hidden Treasure' in Central Kenya

Could a cave in a small village in central Kenya be the site of buried treasure? A rumor of riches, left behind by colonialists, has some residents dreaming of wealth, while others see it as a dangerous hoax. VOA's Gabe Joselow has the story.
Video

Video Ebola Patients Find No Treatment at Sierra Leone Holding Center

At a holding facility in Makeni, central Sierra Leone, dozens of sick people sit on the floor in an empty university building. They wait in filthy conditions. It's a 16-hour drive by ambulance to Kailahun Ebola treatment center. Adam Bailes was there and reports on what he says are some of the worst situations he has seen since the beginning of this Ebola outbreak. And he says it appears case numbers may already be far worse than authorities acknowledge.
Video

Video Identifying Bodies Found in Texas Border Region

Thousands of immigrants have died after crossing the border from Mexico into remote areas of the southwestern United States in recent years. Local officials in south Texas alone have found hundreds of unidentified bodies and buried them in mass graves in local cemeteries. Now an anthropologist and her students at Baylor University have been exhuming bodies and looking for clues to identify them. VOA’s Greg Flakus has more from Waco, Texas.
Colonel Steve ‘Spiros’ Pisanos left Greece and came to the U.S. to learn to fly. He flew fighters for the Allies in World War II, narrowly escaping death multiple times.Colonel Steve ‘Spiros’ Pisanos left Greece and came to the U.S. to learn to fly. He flew fighters for the Allies in World War II, narrowly escaping death multiple times.

AppleAndroid

World Currencies

EUR
USD
0.7866
JPY
USD
109.25
GBP
USD
0.6139
CAD
USD
1.1120
INR
USD
61.428

Rates may not be current.