Midwester drought, election year politics add to pressure on ethanol

An intensely dry season across the midwestern states has led to a sever drought in those regions, and the drought has led to poor production of corn, soybean and wheat, harming corn ethanol exports and adding pressure to the "fuel versus?food" debate.

By Antony Ingram,?Guest blogger / August 14, 2012

In this August 2012 file photo, a dry corn field receives some rain from a passing thunder storm near Blair, Neb. Livestock farmers and ranchers seeing their feed costs rise because of the worst drought in a quarter-century are demanding that the Environmental Protection Agency waive production requirements for corn-based ethanol.

Nati Harnik/AP

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Corn?ethanol, the oft-touted answer to the problem of foreign oil, is still suffering problems.

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This time, a drop in production--thanks to drought conditions in the midwestern states that produce it--is harming corn ethanol exports and putting further pressure on the?fuel?vs. food debate.

That pressure also comes in an election year, when ethanol traditionally becomes a hotter topic for debate.

As?ieee spectrum?reports, the drought has led to poor production of corn, soybean and wheat, meaning lower stocks for food. That's led U.S. livestock producers--and even the United Nations--to lobby the?Environmental?Protection Agency to temporarily suspend the Renewable Fuels Standard--a mandate that dictates the quantity of ethanol required in gasoline.

The RFS is expected to be replaced by a wider-ranging?Low Carbon Fuel Standard?that will put less emphasis on ethanol. 40 percent of current U.S. corn crops are used to make ethanol.

Though the U.S. corn ethanol lobby suggests that rising prices won't affect the cost of gasoline to any degree, higher corn prices were?said to have contributed a quarter?of July's 16 cents per gallon increase in U.S. gasoline prices.

Despite the drought, the worst in 50 years, the agriculture industry isn't suffering too badly.

The?Renewable Fuels Association?says that U.S. farmers are still on track to produce the eighth-largest corn crop on record this year, while rising prices mean that there's more money to be made from corn right now.

And demand for corn ethanol from fuel companies means any U.S. political candidate is unlikely to waive the EPA's ethanol fuel mandates, and risk losing the support of America's farmers.

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Source: http://rss.csmonitor.com/~r/feeds/csm/~3/ftnOA-l8IZI/Midwester-drought-election-year-politics-add-to-pressure-on-ethanol

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