Tuesday, June 14, 2011

Challenging Conventional Wisdom On Ethanol

Is it suddenly fashionable to be against ethanol?

First, Minnesota Republican Tim Pawlenty defied conventional wisdom by proclaiming his opposition to ethanol subsidies while announcing his candidacy for president—in Iowa.

And now, a trio of prominent Republican senators—Tom Coburn, Okla., John McCain, Ariz., and Jim DeMint, S.C.—is targeting ethanol as well.

Coburn is forcing a Senate vote—perhaps as early as today—on eliminating the 45-cent-per-gallon ethanol tax credit, and DeMint says he will offer a separate amendment to repeal the renewable fuel standard (RFS), which mandates ethanol’s production. Not to be outdone, McCain says he wants to bar the Agriculture Department from making grants to install ethanol pumps at filling stations.

If that sounds like a political sea-change, it is. Until recently, the livestock industry was largely alone in questioning federal subsidies for ethanol production. The subsidies drive up corn prices, and the RFS affects corn supplies, threatening livestock feed shortages, which would be disastrous for pork and cattle producers alike. NPPC repeatedly has said that support for renewable fuels should not come at the expense of the livestock industry.

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