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Old 05-08-2008, 07:47 AM
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Ethanol Strategy Losing Support

Ethanol Strategy Losing Support

Policy Snagged In Clamor Over Price Of Food


By H. JOSEF HEBERT | Associated PressWASHINGTON — - Just months ago, ethanol was the Holy Grail to energy independence and a "green fuel" that would help nudge the country away from climate-changing fossil energy.

Democrats and Republicans cheered its benefits as Congress directed a fivefold increase in ethanol use as a motor fuel. President Bush called it key to his strategy to cut gasoline use by 20 percent by 2010.

But now with skyrocketing food costs — even U.S. senators are complaining about seeing shocking prices at the supermarket — and hunger spreading across the globe, some lawmakers are wondering whether they made a mistake.

"Our enthusiasm for corn ethanol deserves a second look. That's all I'm saying, a second look," Rep. Jane Harman, D-Calif., said at a House hearing Tuesday where the impact of ethanol on soaring food costs was given a wide airing.

The dramatic reversal has stunned ethanol producers and its supporters in Washington as they have seen their product shift from being an object of praise to one of derision.

Sen. Charles Grassley, R-Iowa, one of the Senate's two working farmers and a longtime ethanol booster, finds it hard to believe that ethanol could be "clobbered the way it's being clobbered right now" over the issue of food costs. What does the cost of corn have to do with the price of wheat or rice, he is telling people.

The uproar over ethanol is clearly gaining momentum. The governor of Texas and 26 senators, including the GOP's presumptive presidential nominee, John McCain, are asking the Environmental Protection Agency to cut this year's requirement for 9 billion gallons of corn ethanol in half to ease, they say, food costs. Connecticut Gov. M. Jodi Rell recently asked Congress to temporarily waive the requirement.

Meanwhile, Sen. John Thune, R-S.D., is gathering senators' signatures on a letter opposing any EPA action so that "this attack on ethanol will be blocked," said a statement from Thune's office. "It will be a fight."

Robert Meyers, an EPA deputy assistant administrator, told a House hearing Tuesday that the agency will respond to the request as quickly as possible, but he doubts that anything will be forthcoming for about three months. There's a regulatory process to follow, he said.

But lawmakers, even those who enthusiastically supported the requirement for refiners to ramp up ethanol use to 36 billion gallons a year by 2022 from about 7 billion gallons last year, have begun to have qualms.

"Corn ethanol was presented as an almost Holy Grail solution," said Rep. Mike Doyle, D-Pa. "But I believe its negatives today far outweigh its benefits. ... We need to revisit this ... and back away from the food-to-fuel policy."

Rep. Joe Barton of Texas, the ranking Republican on the House Energy and Commerce Committee, said he will introduce a bill to abandon the ethanol requirement passed just before last Christmas and go back to the one Congress enacted in 2005 that would call for a more modest ethanol increase.

But Barton is not so naive as to think his bill has a chance. House Democratic leaders have given no indication of retreating from the ethanol requirement. Still, Barton said, "it's worth putting in."

In fact, most of the squirming over ethanol and food prices appears to many as little more than political posturing with little chance of actual legislation emerging in this crowded election year, when much of Congress often seems to be in a stalemate.

Like soaring gasoline prices, skyrocketing food costs are largely beyond Washington's influence. And ethanol's powerful farm lobby still has considerable clout.

"The ink has hardly dried on this new law when the clamoring began ... for congressional intervention," Rep. John Dingell, D-Mich., chairman of the Energy and Commerce Committee, said Tuesday of the ethanol uproar.

But Dingell made it clear that he has no intention of making any significant changes in the production requirements passed in December as part of a broader energy bill, saying such a move "would be unwise and could lead to unintended consequences."

Still, congressional unease about the food-for-fuel debate is showing itself in a number of places.

In a massive farm bill, for the first time in memory lawmakers recently trimmed the federal tax subsidy for corn ethanol, reducing the tax break from 51 cents to 45 cents a gallon. But at the same time, lawmakers reiterated their support for making ethanol production from cellulosic feedstocks — wood chips, switchgrass, and even garbage — commercially viable. The same farm bill provides $400 million for cellulosic ethanol research and development.

And the rush of hearings into the food-to-fuel issue shows no sign of subsiding. The hearing on Tuesday by an Energy and Commerce subcommittee vied for attention with another hearing into the soaring cost of diesel fuel. The Senate's Homeland Security and Government Affairs Committee has scheduled another hearing on food and fuel today.

Will anything come of it?

"Nothing," said Rep. John Shimkus, R-Ill., during a break in Tuesday's session.

Shimkus, whose state has one of the biggest ethanol producers in Archer Daniels Midland Co., supports the mandate and sees heavy reliance on corn as a feedstock only temporary. "It's a bridge [to] cellulosic ethanol, and we can't jettison the present and not get to the future," he said.
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