Share


U.S. Sen. Grassley: Senators spell out facts in food vs. fuel debate and debunk claims against ethanol
5/22/2008

WASHINGTON --- Six senators held a news conference today to dispel myths in the case being made against ethanol and to blame biofuels for rising food costs.

Senator Chuck Grassley of Iowa was joined by Senators Kit Bond of Missouri, Byron Dorgan of North Dakota, John Thune of South Dakota, Ben Nelson of Nebraska, and Ken Salazar of Colorado.  The bipartisan group presented facts that undermine various criticisms being leveled against alternative energy and demonstrated that the arguments are not based on sound science, sound economics or common sense.

            The written remarks of Grassley, Bond, and Nelson follow here.  Audio of the full news conference can be found on Grassley’s website, http://grassley.senate.gov.

Prepared Remarks of U.S. Senator Chuck Grassley of Iowa

News conference to counter ethanol smear campaign

Thursday, May 22, 2008

            I'm back at this podium today to dispel myths being perpetuated by a newly emerged version of the anti-ethanol campaign.

            The Grocery Manufacturers Association has spent an initial $300,000 on high-priced Washington spin doctors.  The association will spend a whole lot more on a misleading and disingenuous assault on ethanol.  Members of Congress are starting to be swayed.  They're introducing legislation.  We're here to inject the facts back into this debate.

            The Grocery Manufacturers Association has an obvious self-interest in launching this campaign.  They need to blame someone for high grocery bills, but they've aimed their fire at a false target.  Buying into their line won't do anything to help families trying to make ends meet.  It will do serious and lasting damage to America's interests for energy independence, national security and a cleaner environment.

            Thirty years ago, Congress started enacting policies to help develop and encourage the use of renewable energy.  Today, the need for new sources of energy and renewable sources of energy is a no-brainer.  We know that American drivers and U.S. policy makers will remain at the mercy of petro-dictators around the world if we don't continue to beef-up efforts for more and better renewable energy.  Renewable energy is part of the three-legged energy stool that includes conservation, production and alternative sources.  With gas nearing $4 a gallon, it's not the time to reverse course or undermine efforts to create energy for the future.

            Front-page headlines in today's papers underscore the point.  "Energy Watchdog Warns of Oil-Production Crunch."  (Wall Street Journal, May 22, 2008)  The International Energy Agency is warning of a severe oil-production crunch.  We obviously need more conservation and efficiency AND alternative fuel development.  We also need to demand that Big Oil and oil-producing nations make major investments in drilling and distribution systems to meet global demand.  But even that leaves us in a hat-in-hand position, begging the likes of Venezuela, Nigeria, and countries in the Middle East to boost oil production.

            So my question to the Grocery Manufacturers Association is, do you want America to place its trust in OPEC or in U.S. farmers?  The short-sighted, self-serving campaign of this trade association and its allies is at America's expense.

            Beyond energy, it creates turmoil in the food chain and food supply system that has provided the highest quality, least expensive food in the world for American consumers.  It pits traditional allies in agriculture and the food system against each other.  Tell me how that's good for grocery shoppers and family budgets.  The facts are that biofuels are a very small factor in rising grocery costs and even the pressure on independent livestock producers.  Several estimates show that ethanol has actually lowered the cost of retail gasoline by 30 to 40 cents.  Oil and gas prices might be 15 percent higher if biofuels weren't on the market.  Those are the facts, and they need to be heard loud and clear.

            I appreciate my colleagues joining me here today.

Prepared remarks of Senator Kit Bond

Thursday, May 22, 2008

As of late, some in the big media have feasted on skapegoating ethanol for high food prices.  Before we get carried away, let’s consider all of the factors.

According to USDA, a box of corn flakes consists of less than a dime’s worth of corn and is accountable for less than 5% of the resale price. A pound of ground beef contains about a quarter’s worth of corn.

Today at Gerbes Grocery in Columbia, Missouri, a 24 ounce box of corn flakes cost $3.69 which is up more than a dollar.  If the corn in the corn flakes increases a nickel, why did the box of corn flakes increase over one dollar and where did the other 95 cents go?  It is obvious that you can’t turn a nickel or dime or even a quarter into a dollar-plus increase.  It doesn’t add up.

While the amount of corn actually used in food products is minuscule, the amount of Petroleum being used is not. Not only is Petroleum used in the transportation of these food goods, but in the packaging and manufacturing as well.

In fact, the USDA reports that 81% of the cost of food goes to off farm costs such as manufacturing, packaging, distributing and retailing of food products.

The Federal Reserve Bank of Kansas City stated that a 10% increase in energy price translate into a short term food price increase of 5%- in the past 12 months, oil prices have risen 100%.

When the average retail food item travels 1300 miles it is no surprise that energy costs have such a strong impact on food prices. So the real question is how can we help transportation costs, and in turn help food prices.

Biofuels are doing just that. Merrill Lynch estimates that fuel would be 15 percent higher if it weren’t for the production of biofuels.

For example, my home State of Missouri has an E-10 mandate, meaning that every gallon of gasoline sold in the state of Missouri is composed of 10% Ethanol.  It is projected that the combination of the federal RFS and Missouri mandate will save Missourians $285 million at the pump, making Missouri one of the cheapest states to drive through.

A study conducted by the U.S. Department of Energy showed that the fuel cycle of ethanol generates 6.8 Btu for every Btu of fossil energy consumed. Traditional gasoline, however, generates only 0.79 Btu of fuel energy for every Btu consumed.

In other words, for every Btu dedicated to ethanol there is a 34% energy gain, whereas there is a 19.5% loss of energy for gasoline.

In addition to efficiency, the increased use of Ethanol has been good for the environment. The production and use of 6.5 billion gallons of ethanol in America’s automobile fleet in 2007 resulted in the reduction of carbon dioxide and greenhouse gas emissions by 10 million tons, the equivalent of removing more than 1.5 million cars from American roads.

Ethanol plays a small but important role in keeping transportation and food costs down by increasing our fuel supply, it’s economics 101 folks, increasing supply lowers prices.

There is no denying that times are tough, but we can’t pretend that undercutting the strides we have made in developing a stable American fuel source will solve our problems.

Remarks of Senator Ben Nelson of Nebraska

Thursday, May 22, 2008

I’m not sure when it happened or why it happened but it’s incredible to me that someone decided to add ethanol to the members of the axis of evil.  They ignore the fact that the cost of oil has far more triggered the cost of products and living in the U.S. than the grinding of corn into ethanol. As an oil-based economy, we have to move to renewable fuels in order to provide for our own energy security in the future and that means we’re not going to find the solution to the problem at the bottom of the next empty oil well.  


Printer-friendly version      Send this article to a friend      Share