News / USA

Congress Considers Cutting Gasoline Makers' Ethanol Subsidy

Tax credit under fire from hunger advocates, food manufacturers

About 40 percent of the US corn (maize) crop goes to the production of ethanol.
About 40 percent of the US corn (maize) crop goes to the production of ethanol.

Multimedia

Audio

Ninety organizations are calling for an end to the $6 billion-dollar-a-year subsidy that encourages the production of ethanol biofuel from maize in the United States.

Ethanol makes up about 10 percent of the gasoline fueling cars in the United States, and almost all of it is made from maize.

"It’s renewable and domestic, home-grown," says Bob Dinneen, president of the Renewable Fuels Association, who adds that this home-grown source of energy is reducing the nation's dependence on foreign oil.

A 2007 U.S. law requires motor fuel to include renewable fuels. And - for blending in ethanol - gasoline makers get a tax credit that adds up to about $6 billion this year.  

Skyrocketing production

Production of ethanol from maize, also called corn in the United States, has skyrocketed in just the last few years to meet the demand, says Purdue University economist Wally Tyner. "It’s gone from 5 percent of our corn crop to almost 40 percent of our corn crop today. So it’s a huge change."

Critics say that huge change is one of the reasons corn prices on global markets have risen 77 percent over a year ago.

Tyner agrees ethanol is a factor, but he also points to a number of other factors driving prices up. Bad weather last season cut supplies in major producing countries, while demand for food and animal feed is rising, especially in Asia.

Rising corn prices

The impacts of rising corn prices are greatest in the developing world, where many people spend most of their income on food.

"Even if they rise a little bit in a local market, poor and vulnerable people are feeling that the most strongly," says Marie Brill, with the advocacy group ActionAid.

ActionAid was one of the 90 organizations that wrote to U.S. congressional leaders urging an end to the ethanol tax credit. The list also included food manufacturers and meat and dairy groups hit by rising prices.

"We don’t need to put good taxpayer money after bad biofuels at a time when the industry can compete on its own," says Brill.

However, Bob Dinneen with the Renewable Fuels Association says the role of ethanol in rising food prices has been greatly overstated.

"I’m not going to say no role, but a very small role," he says. "The fact of the matter is, what is driving food price inflation today is skyrocketing energy costs. Period."

Corn prices on global markets have risen 77 percent over a year ago. Critics blame ethanol production.
Corn prices on global markets have risen 77 percent over a year ago. Critics blame ethanol production.

Food security vs. energy security

With crude oil trading at around $100 a barrel, Dinneen believes subsidies for the petroleum industry should be on the table, too. He says the ethanol industry is open to changes but adds that the industry’s potential to help meet the country’s future energy needs should not be sacrificed.

"Look, we produce from grain today. But there is not an ethanol producer in the country that isn’t looking for new feedstocks, new technologies to continue to grow the industry in a sustainable fashion," says Dinneen.

While the search for new technologies continues, food crops remain the primary source for biofuels - a questionable route to independence from foreign oil, according to ActionAid’s Marie Brill.

"If what we really want in our oil independence is national security," she says, "then we need to make sure we’re not putting at risk our food security."

You May Like

Karzai's Legacy: Missed Opportunities?

Afghanistan's president leaves behind a much different nation than the one he inherited, yet his legacy from 13 years in power is getting mixed reviews More

US Urges Restraint in Hong Kong Protests

Protesters angered by Beijing's decision to only approve candidates that it sanctions for Hong Kong's leadership elections in 2017 More

Archive of Forgotten UCLA Speeches Offers Snapshot of History

Recordings of prominent voices in social change, politics, science and literature from 1960s, early 1970s now available on YouTube More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Treasure Hunters Seek 'Hidden Treasure' in Central Kenyai
X
Gabe Joselow
September 29, 2014 6:20 PM
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 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 Iran's Rouhani Skeptical on Syria Strikes

Iranian President Hassan Rouhani expressed skepticism Friday that U.S.-led airstrikes in Iraq and Syria could crush Islamic State militants. From New York, VOA’s Margaret Besheer reports the president was also hopeful that questions about Iran’s nuclear program could be resolved soon.
Video

Video US House Speaker: Congress Should Debate Authorization Against IS

As wave after wave of U.S. airstrikes target Islamic State militants, the speaker of the Republican-controlled House of Representatives says he would be willing to call Congress back into session to debate a formal, broad authorization for the use of military force. VOA’s Michael Bowman reports from Washington, where legislators left town 10 days ago for a seven-week recess.
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.
Video

Video Ebola Robs Liberians of Chance to Say Good-Bye to Loved Ones

In Liberia, where Ebola has killed more than 1,500 people, authorities have worked hard to convince people to allow specialized burial teams to take away dead bodies. But these safety measures, while necessary, make it hard for people to say good bye to their loved ones. VOA's Anne Look reports on the tragedy from Liberia.
Video

Video Reconstruction? What Reconstruction? Life After War in Gaza

It’s been a month since Israel and the Palestinians agreed to a ceasefire to end 52 days of an air and tank war that left 60,000 homes in Gaza damaged or destroyed and 110,000 homeless. Sharon Behn reports that lack of reconstruction is leading to despair.
Video

Video US, Saudi Arabia and UAE Hit Islamic State's Oil Revenue

The United States, Saudi Arabia and the United Arab Emirates have bombed oil facilities operated by Islamic State militants in Syria. It was a truly collaborative effort, with the two Arab countries dropping the majority of the bombs. The 12 refineries targeted were estimated to generate as much as $2 million per day for the terrorist group. VOA Pentagon correspondent Carla Babb has the story.
Video

Video Russia's Food Sanctions Raise Price Worries, Hopes for Domestic Production

Russia retaliated against Western sanctions imposed for its actions in Ukraine by halting food imports from the West. The temporary import ban on food from Australia, the European Union, Norway and North America has Russian consumers concerned that they could face a sharp increase in food prices. But in an ironic twist, the restrictions aimed at the Kremlin have made Russia's domestic food producers hopeful this can boost their business. VOA's Daniel Schearf reports from Moscow.
Video

Video Washington to Pyongyang: 'Shut This Evil System Down'

U.S. Secretary of State John Kerry is calling on North Korea to shut down prison camps and other human rights abuses following a United Nations Commission of Inquiry into "widespread and systematic human rights violations." VOA State Department Correspondent Scott Stearns reports from the United Nations.
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