Domestic Fuel

The American Coalition for Ethanol (ACE) is calling claims made by an advertising campaign against ethanol by a coalition food and oil company groups “half-baked.”

“If the products sold to consumers by Big Food are as half-baked as their ethanol claims, we have a life-threatening food safety crisis in America,” stated Brian Jennings, Executive Vice President of ACE. “Never before has more corn been used to make more ethanol, and yet retail food prices have fallen sharply this year.”

Jennings issued the statement in response to an anti-ethanol ad last week in the Capitol Hill publication Roll Call, that was funded by the American Meat Institute, Grocery Manufacturers Association, National Petrochemical and Refiners Association, Environmental Working Group and others. The ad claimed that moving from 10 percent ethanol in gasoline up to E15 would be bad for consumers, the environment, and rural communities.

“This coalition of strange bedfellows is both desperate and naïve,” Jennings said. “Oil and food companies are desperate and will resort to anything to protect the status quo of cheap corn and expensive oil. Some environmental groups naively believe getting rid of corn ethanol today, in hopes that some other potentially promising but not yet commercialized technology will be available tomorrow, will somehow reduce air pollution.”

EPA is currently considering a petition that would increase the amount of ethanol allowed in regular gasoline to 15 percent from the current 10 percent.

A group of researchers, many from Princeton University, say that biofuels can solve many of the problems related to non-renewable fossil fuels… without creating more problems of their own.

This article from Princeton says the key is making the green fuels from sustainable sources:

“The world needs to replace fossil fuels with renewable energy, but recent research findings have thrown the emerging biofuels industry into a quandary,” said David Tilman of the University of Minnesota, a noted ecologist and lead author of the paper. “We met to seek solutions. We found that the next generation of biofuels can be highly beneficial if produced properly.”

“It is essential that legislation take the best science into account, even when that requires acknowledging and undoing earlier mistakes,” Socolow said. “Future carbon dioxide concentrations in the atmosphere will tell us when we’re kidding ourselves about what actually works. For carbon management, the atmosphere is the ultimate accountant.”

The article goes on to say that to balance biofuel production and food issues, biodiesel and ethanol makers need to focus on five major sources of renewable biomass, including perennial plants grown on degraded lands abandoned from agricultural use, crop residues, sustainably harvested wood and forest residues, double crops and mixed cropping systems, and municipal and industrial wastes. These sources could meet a significant amount of the U.S. demand for transportation fuels.

After becoming one of the top three wheat exporters in 2008, Russia is now determined to play a pivotal role in the flow of worldwide agriculture markets. Russian Federation’s President Dmitry Medvedev has proposed closer coordination between global grain exporters and said, “excessive protectionism had encouraged speculation in global grain markets,” during the World Grain Forum which took place over the weekend in Saint-Petersburg. This challenge was spurred in part by the number of people globally  who are stricken with extreme starvation: 1 billion.

Russia is also the second largest oil supplier and intends to get into the biofuels game. However, Medvedev said to the more than 1,000 forum attendees that the country would only support sustainable fuels developed from non-food sources.

“The technology now exists and we think the world community has to find a compromise between the issues of energy and food security,” Medvedev said in Rueters’ article Kremlin urges grain exporters to tackle world hunger. “The growth of biofuels should not become a reason for a growing deficit of food grain.” The country plans on more than doubling its agriculture land and production over the next few years.

Syngenta Chief Operating Office Crop Protection, John Atkin was also a speaker during the World Grain Forum and during his presentation emphasized the critical role of technology in meeting current and future global food needs.

“The world must work together, Atkin said, “to accelerate technology adoption. We could already realize significant yield
potential within the next three years by comprehensively deploying existing technologies.”

The American Farm Bureau Federation, Growth Energy, National Farmers Union, and National Corn Growers Association joined together today to host a media call to applaud the recently released report from the Congressional Budget Office, “The Impact of Ethanol Use on Food Prices and Greenhouse-Gas Emissions.” The report concluded that from April 2007-April 2008 ethanol did have a slight impact on rising food prices but that other culprits, such as high energy prices, had the most impact on rising food costs. Of the 5.1 percent increase in food prices, expanded ethanol production contributed between 0.5 and 0.8 percent of the increase in food prices measured by the consumer price index.

Bob Stallman, President of the American Farm Bureau Federation, began by saying, “The results come as no surprise to us. We have called for hearings to determine why food prices have increased. It’s disingenuous to only look at corn when determining why food prices are increasing. We think they owe us an apology.”

Tom Buis, CEO of Growth Energy expanded on the factors that did have the most impact on rising food prices including the weak dollar, increased exports, unregulated energy markets, and oil speculation.  Roger Johnson, President of the National Farmers Union noted that studies have shown that during the same time food prices and gas prices were on the rise, ethanol saved consumers an average of 34 cents per gallon. This equates to nearly $500 per year for the average family.

The ethanol industry has recently filed a “Green Jobs Waiver” or “E15 Waiver” with the EPA to increase the blend level from 10 percent to 15 percent. It has been argued by ethanol proponents that unless the blend wall is increased the industry won’t be able to achieve the goals set out in the Renewable Fuels Standard (RFS) calling for 36 billion gallons of biofuels blended per year by 2022. “We won’t get there unless we make the ethanol industry profitable again and get through the higher blend wall,” summed up Rick Tolman, CEO of the National Corn Growers Association. “We will provide what we need to get to the next generation of biofuels.”

The National Biodiesel Board is refusing to let food companies spread fear and misinformation in the continuing food-versus-fuel debate.

NBB CEO Joe Jobe, responding to Kraft Foods’ CEO Irene Rosenfeld’s blame of biofuels for the rise in food prices, has submitted his own opinion piece to USA Today asking how Kraft can continue to make soaring profits at the cost of its customers… while trying to wrongly blame biodiesel and ethanol:

[Rosenfeld] said, “Forty percent of the food supply is being diverted for use in fuel.” Almost half of all grains, meats, dairy, vegetables and fruit in the world are being converted to fuel? This is fear-mongering at its worst.

Food companies have blamed biofuels all year for higher prices. Rosenfeld’s statement shows how far companies will go to distract Americans as Kraft raked in $1.4 billion in earnings last quarter. Adjusted for inflation, corn and wheat have dropped by 50% since spring, and soybean prices are lower than at almost any other time since the Great Depression even as biofuels production expands. This year, oil companies made more than ever in profits. The difference is, when oil prices dropped, so did the price at the pump. Too bad Big Food isn’t living up to Big Oil’s standards.

So the next time you’re picking up a box of “the Cheesiest” maybe you should ask, why is it still the priciest? Rest assured it’s not biodiesel’s and ethanol’s faults.

The Ethanol Promotion and Information Council has been recognized by the Public Relations Society of America (PRSA) Nebraska chapter for its work in fighting the misperceptions that ethanol was the primary culprit to the rising cost of food.

EPIC’s media kit “Food AND Fuel” received the Award of Excellence from the organization. In addition, EPIC also received an Award of Excellence in the OP-ED/Bylined Article category.

EPIC recently announced that it is joining Growth Energy, a newly formed organization dedicated to the promise of agriculture and growing America’s economy through cleaner, greener energy.

It was a pretty amazing event today at the Farm Foundation’s Food and Agriculture Policy Summit in Washington, D.C. today.

Seven former Secretaries of Agriculture (six in-person and one by videotape) debated the future of agriculture in America, especially what the immediate future would hold for the next person to head the U.S. Department of Agriculture.

A big part of this historic, bipartisan conversation was the role of biodiesel and ethanol, as well as other sources of renewable fuels.

John Block, who served as Pres. Ronald Reagan’s Ag Chief, said there’s too much infighting within the agriculture community over renewable energy.

“We’re one family in agriculture. We shouldn’t be fighting each other. I think there’s been too much fighting in the family over this food and fuel issue.”

Block says we can’t take our eye off the ball of getting energy from all sources. He says the recent drop in oil prices won’t last.

Listen to Block’s comments here:

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The newly formed ethanol advocacy group, Growth Energy, has aggressive plans for attacking some of the major issues impacting the growth of biofuels.

During an interview at the National Association of Farm Broadcasting annual meeting, Growth Energy board member Greg Krissek of ICM said they want to “especially focus on the federal work being done on mid-level and higher level blends (of ethanol) but accelerate that.”

The new organization will be “working very closely together” with the Ethanol Promotion and Information Council (EPIC). “As the industry gets bigger, it’s an opportunity for coalitions to be built of groups of producers,” said Krissek.

Growth Energy will also be aggressively fighting back against food companies that have been blaming ethanol production for higher food prices. “The question is simple – are food prices going to fall? Or was it really a disingenuous statement that was made,” Krissek said. The organization is requesting that Congress to hold hearings with food companies to ask them the question.

Listen an interview with Greg Krissek here:

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Representatives from both sides of the food versus fuel debate discussed the issue on Friday in Kansas City during a forum held by the Agricultural Business Council of Kansas City.

Speakers included USDA Undersecretary Tom Dorr; editor Morton Sosland of Sosland Publishing Co.; and Randy Schnepf, agricultural economist with the Congressional Research Service.

The panel moderated by Mike Adams of Agri-Talk included two farmers – Blake Hurst, vice president of Missouri Farm Bureau and Ken McCauley, past chairman of the National Corn Growers Association – who represented the fuel perspective. On the food side were Robb MacKie, president of the American Bakers Association, and Dan Gustafson of the Food and Agriculture Organization.

Notably, all four panel members made the point that biofuels are not the main culprit for rising food prices and agreed that major factors behind rising food costs include tight global grain stocks, export bans, and record energy costs. “It appears the volatile corn and wheat markets have adjusted down, for now. The key constraints on global grain stocks remain to be land available for agricultural production and crop yields,” said Schnepf.

McCauley noted that crop yields may double by the year 2030. “We are currently using all available technology to significantly increase corn production, and there is more technology in the pipeline that will boost yields even more,” McCauley said. “Likewise, we can find new markets for corn while still meeting all traditional needs and being responsible stewards of the natural resources we’ve been given.”

Biofuels in general and ethanol in particular were part of the discussion at the World Food Prize symposium in Des Moines this year. Despite the food versus fuel controversy that permeated the headlines for 2008, there seemed to be more acceptance of biofuels as being able to co-exist with food production and being part of the overall global agriculture picture.

This Ethanol Report podcast features some of the comments made at the World Food Prize events last week by UK Scientific Advisor Sir Gordon Conway, International Biofuels Commission co-chair Roberto Rodrigues, World Bank president Robert Zoellick, former senators George McGovern and Bob Dole – this year’s World Food Prize recipients, and Secretary of Agriculture Ed Schafer.

You can listen to “The Ethanol Report” on-line here:

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