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Enviros Take on Ethanol

Correction Appended

Nobody said going green would be easy.

But for Democrats and Republicans looking for a win in last year’s energy bill, the renewable fuel standard seemed like a natural target. Mandating an increase in corn-based ethanol while encouraging research on greener fuels was seen as the future to reducing the country’s dependence on foreign oil.

Yet five months later, rising food and fuel prices have led an ever-growing number of industries to argue that the ethanol mandate must be revoked.

The environmental lobby is the latest to enter the fray, ramping up its efforts as part of a wide-ranging coalition of food producers, oil refiners, livestock producers and hunger advocates to put the kibosh on the mandate that requires 36 billion gallons of ethanol be produced yearly by 2022, up from about 7 billion gallons last year.

The Clean Air Task Force, Friends of the Earth, Environmental Working Group and Earth Policy Institute sent a letter to Rep. Rick Boucher (D-Va.) last week in advance of a hearing he chaired for the Energy and Commerce panel’s Subcommittee on Energy and Air Quality relating to food and fuel prices.

“The Renewable Fuels Standard was based on the sound premise that America needs a reliable, renewable and environmentally beneficial alternative to current carbon intensive fuels,” they wrote, asking for Congress to re-examine the biofuels issue. “But any solutions we embrace must be sustainable for the environment and for people.”

The move was the largest effort by the environmental lobby to remove the biofuels mandate.

As such, the groups joined a large coalition that the Grocery Manufacturers Association is helping organize. Although the industries aren’t lined up on everything relating to RFS and renewable energy, they are pushing for Congress to re-evaluate the mandates, subsidies and tariffs that divert more corn to the fuel supply, instead of food, Scott Faber of GMA said. Faber formerly worked at the Environmental Defense Fund.

The environmental groups aren’t strangers to the ethanol issue. Most opposed the RFS mandate in the energy bill, but stayed either neutral on the entire bill or were supportive because it included improved fuel economy for cars. In fact, the Clean Air Task Force says it has been working on the problem of corn-based ethanol since last fall. But the task force’s Jonathan Lewis said the current political situation created a perfect storm to make Congress aware of their concerns about the environmental impact of potential crop displacement and carbon emissions.

“Our bottom-line message is Congress is flying blind on this issue,” Lewis said. “You are influencing two huge commodity markets, and they have no idea how that process is going to play out.”

While most of the environmental community is aligned on the ethanol issue, one key environmental group —the Natural Resource Defense Council — is missing. The giant organization, which has more than 1.2 million members and online activists, has been supportive of biofuels and corn-based ethanol for the past several years, breaking with the larger environmental community.

Now the environmental group is working to make sure safeguards aren’t stripped from the RFS mandate, said Franz Matzner, the NRDC’s forest and public land advocate. NRDC is also working on implementation of the regulations surrounding the RFS mandate and would like to see more focus on cellulosic ethanol, Matzner said.

NRDC’s position puts it at odds with many in the environmental community.

“NRDC fell prey to the notion that you could grow corn from one end of the country to another, so long as the corn was being produced according to sustainable standards,” Faber said. “But obviously agriculture economics dictates that diverting more corn into our fuel supplies will drive up not only the price of corn, but the price of other commodities, especially soybeans.”

The NRDC isn’t alone. The Renewable Fuels Association and the National Corn Growers Association are among many agriculture industry groups that have vehemently argued that increased food prices are not because of the ethanol market. Instead, they point to rising fuel prices, hedge-fund speculators, growing demand for food, and droughts as key reasons for the increased cost of foodstuffs.

Despite the push for Congress to do something about ethanol, it’s very unlikely to happen before the next Congress. Still, the coalition is hoping to get more traction on the issue. Besides several hearings scheduled in the coming weeks, 24 lawmakers, including Sen. John McCain (R-Ariz.), signed a letter to the Environmental Protection Agency asking it to cut the 9 billion gallon ethanol requirement for next year in half. Sen. John Thune (R-S.D.) has pledged to send a similar letter opposing any cut in the mandate.

Lawmakers also trimmed the tax subsidy for corn ethanol in the farm bill from 51 cents to 45 cents a gallon, which was an encouraging sign. So far, the group hasn’t taken a position on what policy fix they would get behind.

“We haven’t identified a long-term remedy to the problem of food price inflation,” Faber said. “But we all agree that ultimately diverting up to 40 percent of the corn crop and 30 percent of vegetable oil into our fuel supplies is contributing to record food inflation.”

Correction: May 14, 2008

The article incorrectly identified Jonathan Lewis of the Clean Air Task Force.

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