Research is suggesting that the proposed reduction to the ethanol level in the Renewable Fuel Standard would be like nearly a million more cars on the road for a year.
With the 2016 US presidential election already getting rolling, the debate over the Renewable Fuel Standard could play role in farming-intense states. Iowa Governor Terry Branstad, a supporter of the mandate, thinks candidates who don't support the RFS could be at a disadvantage there for the very important caucuses.
The federal government mandates that a certain amount of ethanol be blended with gasoline. The price of corn-based ethanol hasn't been affected by the same anchor-drop in price as petroleum fuel, however, and along with that, the complicated mechanics of its pricing and trade are said to be what is keeping the price of gas from falling even further.
In 2007, then-president George Bush signed a law that required increased production of ethanol. Swelling ethanol demand for fuel combined with this past summer's drought has driven the price of corn (used to make ethanol) up. In fact, prices have swollen some 400 percent in the last seven years. That's comforting for corn growers, who are dealing with much smaller yields than normal. But it's not comforting for livestock producers, poultry farmers and grocery shoppers.
Corn-based ethanol is a controversial fuel in its own right, and a longstanding federal subsidy for blending the biofuel with gasoline has been an additional source of consternation over the last 30 years. According to The Detroit News, Congress has wrapped up its work for 2011 without extending the incentive, a move that's drawn praise from environmental groups and taxpayer advocates.
For good or ill, a lot of what Americans eat is made of corn. It's not just the obvious ears alongside your main course, it's the sweetener in your drinks and to a large extent the meat on your sandwich. Corn is a viable crop across a large swath of the United States, and thanks to both modern farming techniques and not insignificant government subsidies, it's an extremely cheap source of calories for both humans and animals. Twice as much U.S. corn goes to feeding animals as it does to directly
U.S. ethanol production fell 3.5 percent for the week ending July 8, down 32,000 barrels per day (bpd) from the prior week. Ethanol producers shouldn't worry much, since this is up six percent from the same time frame in 2010 and most biofuel refineries in the U.S. are reporting profitable margins.