The Ethanol Mandate: Hurting American’s Economy


Who’s paying the costs of the federal ethanol mandate?  Every family who shops in a grocery store or dines at a restaurant, every livestock producer who faces higher feed costs, and every motorist who fills up their tank at the gas station pays the price of this unworkable policy.

The ethanol debate is no longer just a debate about fuel or food.  It is also a debate about jobs, small business, and economic growth.  The federal government’s creation of an artificial market for the ethanol industry has triggered a domino effect that is hurting American consumers, livestock producers, food manufacturers, and retailers.  A policy that started with good intentions has resulted in a slew of unintended consequences.

The Renewable Fuel Standard (RFS) mandates that 36 billion gallons of renewable fuels be part of our nation’s fuel supply by 2022.  However, almost the entire mandate is currently being fulfilled by corn ethanol.  One of the greatest unintended consequences of the RFS is the steep increase in the price of corn.  As the amount of corn being used for fuel goes up each year, the problem grows worse.  While more corn supplies are being diverted to ethanol production, corn prices have climbed significantly.  Between 2005 and 2011, corn prices rose by $5 per bushel.  Then last summer, severe drought coupled with demands from the RFS sent corn prices to record highs. Simply put, the ethanol mandate has driven up costs at the expense of food and feed uses.

A few weeks ago, I introduced the RFS Elimination Act, which would completely get rid of the RFS. I also introduced the RFS Reform Act, which would eliminate corn-based ethanol requirements, cap the amount of ethanol that can be blended into conventional gasoline at 10 percent, and set the level of advanced biofuels production at more achievable levels.

The significant support surrounding fundamental reform of the RFS is evidence that there is growing momentum behind this issue.  In addition to support from bipartisan Members of the House, my legislation to reform the mandate is supported by a diverse coalition of more than 45 organizations from farm and environmental groups to restaurants, food manufacturers, small engine manufacturers, consumer groups, conservative think tanks and hunger aid organizations.

We should not continue to put our economy in a position where fuel is pitted against food, jobs, and economic prosperity.  What we do not need is the federal government putting their heavy hand on the scale and tipping it in the favor of the ethanol industry, leaving consumers to pay the price. Instead renewable fuels should compete fairly in the marketplace, free from the distortion and government interference that the current ethanol mandate forces.

As a longtime supporter of eliminating the ethanol mandate, I will continue to support passage of this legislation in Congress to fix this problem.  It’s time to reconsider our ethanol policy.

Congressman Bob Goodlatte