NPR : News

Filed Under:

EPA Says Its Ethanol Rules Aren't Driving Up Food Prices

The ethanol industry is happy with the Environmental Protection Agency today. If you're worried about the price of meat, though, you may not be so pleased.

Even though corn is in short supply, because of this summer's historic drought, the EPA just announced that it will keep in place a federal rule that requires more than a third of the nation's corn to be converted into ethanol and blended into gasoline.

Meat producers and anti-hunger advocates were outraged. Because the law protects the flow of corn into fuel, they say, it drives corn prices higher for everyone else. Kriston Sundell, from ActionAid USA, predicted that "people around the world will go hungry due to spiking food prices while the EPA stubbornly clings to its misplaced faith in biofuels as a sustainable energy solution." A coalition of dairy, poultry, and livestock producers asked "how many more jobs and family farms have to be lost before we change this misguided policy."

Critics and supporters of the "ethanol mandate" both believe that, for better or worse, the law matters. So the most surprising thing about the EPA's announcement today was that it flew in the face of that belief. The agency rolled out economic analyses showing, essentially, that the federal rules don't actually accomplish anything. According to the EPA, gasoline companies would use just as much ethanol even without a federal rule. They're doing it because a) ethanol still is an affordable additive to gasoline, and b) even if ethanol got more expensive, oil companies can't easily reconfigure their refineries to replace ethanol with something else.

Two leading economists who've studied this question — Bruce Babcock at Iowa State University and Wally Tyner at Purdue — agree with the EPA's analysis. "If you look at where gas prices are right now, it looks like it's in the interest of the gas companies to use ethanol," says Babcock.

Babcock says the agency made one additional assumption: That ethanol would have to get a lot more expensive before gasoline company decided to use less of it. The companies are locked in, at least for the short term, by their technical infrastructure: "The oil companies were told that they faced this mandate. They've done the best job possible to comply. They've configured their refineries to use that amount of ethanol, and it's costly for them to switch out of it."

So if this is all true, maybe you can't blame ethanol for that expensive pork or milk at your supermarket. Blame the drought. Oh, and your car, for its contribution to high oil prices.

Copyright 2012 National Public Radio. To see more, visit http://www.npr.org/.

NPR

'Rolling The R's' Is A Story About Coming Of Age And Coming Out

Rolling the R's tells the stories of restless teenagers in the disco era in a gritty neighborhood in Hawaii. Author R. Zamora Linmark discusses the book's impact, 20 years after it first came out.
NPR

'Sweetbitter' Is A Savory Saga Of Restaurant Life And Love

Oysters, cocaine, fine wine, love triangles: Stephanie Danler's debut novel Sweetbitter follows a year in the life of a young woman working at a top-tier Manhattan restaurant.
NPR

Trump Rolls Into Washington For Biker Rally

The presumptive Republican nominee for president addressed Rolling Thunder, the annual gathering of motorcyclists, on Sunday. The group seeks to raise awareness of veterans' issues.
NPR

After Breast Cancer Diagnosis, She Channeled Her Ups And Downs Into Texts

NPR's Scott Simon talks with Natalie Sun about her project, textingwithcancer.com. The website won a Webby award, and documents her pessimism and optimism while undergoing chemotherapy.

Leave a Comment

Help keep the conversation civil. Please refer to our Terms of Use and Code of Conduct before posting your comments.