US: May 20, 2008


WASHINGTON - US Sen. Kay Bailey Hutchison on Monday proposed freezing the federal mandate for corn-based ethanol at this year's level, contending that using so much grain for fuel was pressuring the food supply.


Hutchison introduced legislation that would freeze the federal mandate for corn-based ethanol at 9 billion gallons. The Texas Republican said this would allow for transition to a sustainable renewable fuel source that does not use food.

"The ethanol mandate is clearly causing unintended consequences on food prices for American consumers," Hutchison said. "Freezing the mandate is in the best interests of consumers, who cannot afford the increasing prices at the grocery store due to the mandate diverting corn from food to fuel."

Republican presidential candidate John McCain is a co-sponsor of the bill.

Hutchison said World Bank numbers show global food prices have jumped 83 percent in the last three years. She cited a United Nations report that predicted food costs will increase another 10 to 15 percent due to biofuel production if the renewable fuel mandate is not changed.

Energy legislation signed into law last year requires an annual increase in the amount of ethanol produced domestically, from 4.7 billion gallons in 2007, to 9 billion this year, increasing to 15 billion in 2015 and then 36 billion gallons by 2022.

Congress provided the Environmental Protection Agency with the authority to waive the mandate, or adjust it as necessary to provide relief for consumers.

A Hutchison spokesman said the ethanol freeze legislation could be attached to the farm bill, which the president has threatened to veto because of expensive commodity programs.

The EPA already is considering a request from Texas Governor Rick Perry to cut the renewable fuel standard in half for this year, claiming the adverse economic impact of ethanol production is causing higher corn prices.

The agency said the governor's request will be open for public comment for 30 days. The EPA must decide on the waiver request within 90 days after receiving it, which means the agency has until late July to act on it.

(Reporting by Tom Doggett; Editing by David Gregorio)


Story by Tom Doggett


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