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From The Detroit News: http://www.detroitnews.com/article/20120811/AUTO01/208110328#ixzz23GuP2j65
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Washington -The White House said Friday it has made no decision on whether to waive ethanol requirements for use by the nation’s 250 million vehicles in the wake of a severe drought that’s cutting corn yields.
On Friday, a United Nations official urged the Obama administration to suspend ethanol requirements under the 2007 Renewable Fuel Standard as fears of food shortages grow.
The law assures big demand for corn. It is popular in corn-growing states, making it politically difficult to waive the requirements.
The standard is opposed by many groups, including livestock producers who say the diversion of corn to ethanol raises feed prices — and food prices. More than 180 members of Congress have called on the administration to waive the requirements.
White House spokesman Jay Carney said, “The EPA has made clear that they’re working closely with the Department of Agriculture to keep an eye on yields, and they will evaluate all the relevant information when assessing that situation.”
EPA spokeswoman Alisha Johnson said the agency is watching the issue: “We are in close contact with USDA as they and we keep an eye on crop yield estimates, and we will review any data or information submitted by stakeholders, industry and states relating to the RFS program.”
Carney said the administration was taking the drought seriously.
“The president is committed to ensuring that his administration is taking every step possible to help farmers and ranchers who have been affected by this disaster,” Carney said. “The administration has already taken several steps from opening up lands for haying and grazing, to providing emergency loans, to helping get more truck drivers on the roads delivering much-needed supplies.”
José Graziano da Silva, the director-general of the U.N. Food and Agriculture Organization, said in a Financial Times op-ed that the mandates will hurt food production.
“Much of the reduced crop will be claimed by biofuel production in line with U.S. federal mandates, leaving even less for food and feed markets,” he wrote. “An immediate, temporary suspension of that mandate would give some respite to the market and allow more of the crop to be channeled towards food and feed uses.” About 40 percent of U.S. corn will be used for biofuels, he wrote.
On Friday, the USDA reduced its estimate of corn production to its lowest level in 17 years — 17 percent less than its last forecast, and 13 percent less than last year.
The United States grows about 40 percent of the world’s corn. Prices on Friday remained above $8 a bushel, but could top $10, some analysts forecast.
Corn prices have jumped by more than 400 percent over the last seven years as the U.S. has dramatically boosted the amount of corn-based ethanol.
Under a 2007 energy law, the U.S. is dramatically increasing the use of ethanol in vehicle fuel — to 15.2 billion gallons this year, up from 5 billion gallons in 2007. By 2022, the U.S. must use 36 billion gallons of biofuel, though 21 billion gallons are supposed to be from advanced cellulosic ethanol.
In order to use all of the ethanol required, the EPA has approved the use of a higher blend of ethanol fuel called E15 — which is 15 percent ethanol — up from E10, which is used at most pumps today.
The higher blend of fuel is only approved for vehicles from 2001 and newer, because automakers say engines can be corroded by the higher fuel. They have fought the fuel, arguing it could also hurt newer vehicles.
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From The Detroit News: http://www.detroitnews.com/article/20120811/AUTO01/208110328#ixzz23GuKkA2A
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