Amber waves and an ethanol waiver

The National Corn Growers Association conceded last week that the federal government might — might — be justified in waiving its requirement to turn nearly 5 billion bushels of scarce corn into ethanol for the gas tank. That startling concession from boosters of the government-backed ethanol industry is brought to you by the drought of 2012.

Hot, dry weather continues to ravage America's agricultural heartland. Recent showers in the Chicago area come nowhere close to making up the rainfall deficit. The severe conditions in farm country have produced new resolve in policy and political camps who see this government program for the disaster it is. With any luck, ethanol's grip on official Washington finally will be broken.

The drought gives every American a direct stake in the ethanol debate. The cost of corn and other grain has soared along with the summer temperatures. That in turn raises the cost of livestock feed. In developed countries, prices for beef, pork, chicken, milk and eggs will be on the rise at the grocery store. In the poorest parts of the developing world, soaring grain prices lead to political unrest, hunger and, in the most extreme cases, starvation.

No way should the U.S. government continue to require the production of fuel from a staple crop needed to satisfy a hungry world. No way should the government continue to use protectionist tariffs to restrict imports of competing biofuels, or force gasoline blenders to buy a product that in a free market would attract little or no demand.

The drought, we hope, provides the catalyst needed to dismantle this economically damaging program.

Step One should occur immediately. Under the law, the U.S. Environmental Protection Agency can waive the requirement for using ethanol in U.S. motor fuels. As is, under the "renewable fuel standard," petroleum blenders cut their gasoline with ever-increasing amounts of biofuel each year. This year, the mandate calls for the use of 13.2 billion gallons, nearly all from corn ethanol. Producing that vast amount would consume about 40 percent of the U.S. corn crop — in a good yield year. Next year's mandate: closer to 14 billion gallons.

When the RFS, as it's known, came into being, Congress had been led to believe that much of the ethanol produced in the U.S. by now would come from inedible substances: New technology would let switchgrass, corn stover, wood pulp and other sources of cellulose replace corn as the main ingredient in ethanol production. To bring about the transition to so-called cellulosic ethanol, the federal government invested billions of dollars in research.

The result? A bust. No cellulosic ethanol is being made on a commercial scale in the U.S.

Although the EPA's first step is likely to be a temporary, partial waiver of the RFS, a permanent, full waiver needs to follow.

The ethanol lobby recognizes that risk, and its howls of protest have become increasingly out of touch with the reality in grocery stores and farmers' fields: The Renewable Fuels Association recently noted that the livestock industry would be in trouble if ethanol doesn't consume mountains of feed that otherwise could go to livestock. Why? Because then the byproducts of ethanol production, which also can be fed to livestock, no longer would be available.

For the record, livestock producers want affordable corn for their animals, not just the skimpy leftovers from ethanol distilleries. They want the government biofuel requirements lifted, in the interest of providing some modest relief from high feed prices brought on by the drought. The National Cattlemen's Beef Association has urged the Obama administration to waive the ethanol mandate "and embrace free-market principles."

Pressure for a waiver is growing on Capitol Hill. At least 25 senators, 156 House members and several state governors have petitioned the EPA to reduce or eliminate the mandate. Jose Graziano da Silva, director-general of the United Nations' Food and Agriculture Organization, also has asked the U.S. to suspend its ethanol-use requirement to make more corn available for food and feed.

With the Corn Growers Association's admission that a partial, temporary reduction in the so-called biofuel mandate might be OK after all, one of the key players in Big Agriculture's lobbying machine has strayed from the absolutist party line.

Consumers sensitive to food prices have a stake in this, too. Anyone who likes a hamburger with a glass of milk to wash it down should welcome relief from the ethanol mandate.

source: Chicago Tribune