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Corn+Soybean Digest

Leaving Ethanol Behind Would Not Bring Down Food Prices, Would Drive Up Gas Prices

The American Coalition for Ethanol (ACE) made the following statement in response to calls from some U.S. Senators that the EPA waive the Renewable Fuels Standard ethanol requirement.

Brian Jennings, Executive Vice President of ACE:

“The U.S. ethanol industry welcomes an examination of the facts regarding higher food prices, as opposed to the vast amounts of misinformation that have led these Senators to question their own carefully planned energy legislation. While we may not be able to top ethanol opponents’ well-funded public relations campaign, we are absolutely certain that an examination of the facts will confirm ethanol’s role in reducing gas prices and its minimal impact on food prices.

“It is a fact that ethanol has little or no impact on the price of food, and it is a fact that ethanol is bringing down the price of gasoline. Abandoning ethanol would not only provide zero relief in the grocery aisle, it would immediately drive up the price of gasoline for American motorists who are already suffering from oil at $120/barrel.”

According to Ed Lazear, Chairman of the Council of Economic Advisors, ethanol accounts for just 2-3% of the recent increase in global food prices, while demand from emerging markets makes up almost 20% of the increase. Texas A&M research agrees, stating that corn prices have little to do with food prices, and that relaxing the Renewable Fuels Standard would have little impact on corn prices.

According to a study by Iowa State University, the growth in ethanol production has caused retail gas prices to be 29-40¢/gal. lower than would otherwise have been the case. Also, Merrill Lynch analysts state that oil and gas prices would be 15 percent higher if not for the availability of ethanol. At today’s national average pump prices, this means ethanol is a value of approximately 50¢/gal. to American consumers.

Ethanol is the only alternative to gasoline available today, and its production is generating economic benefits for the nation while reducing the need for expensive imports of oil and gasoline, often from unstable or openly hostile sources.

“These facts have been largely unreported by the media, but will be examined carefully by EPA and regulators who will review whether the RFS should be waived,” Jennings said.

A backgrounder with additional information about ethanol, food, and fuel is available at this link on

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