Governors meet and discuss ethanol

Over the weekend, the nation’s governors gathered for their summer meeting and the agenda included a forum to discuss the nation’s energy policy. It was no surprise that ethanol mandates and subsidies were discussed at length. The major theme to come out of the forum was that there needs to be a shift from grain-based ethanol - either immediately or at least much quicker than the current pace.

Two governors were very vocal about their concern about corn-based ethanol. West Virginia Governor Joe Manchin said “I truly do not believe that a food-based product should be used for energy, where almost all energy needs are met by coal. It should be used for human consumption.” South Carolina Governor Mark Sanford added that the EPA requirement is “a totally bogus government mandate.”

Others governors supported moving away from corn-based ethanol to cellulosic ethanol. At the summit, Michigan Governor Jennifer Granholm proposed using more wood products found in her state. Pennsylvania Governor Ed Rendell of Pennsylvania noted that his state “could be to cellulosic ethanol what Iowa was to corn-based ethanol.”

As the debate continues, let’s hope more governors realize the consequences that grain-based ethanol has created and help find solutions to the problem.

G8 Summit

The leaders of the G8 countries gathered today for their three-day summit in Hokkaido Tokado, Japan. The leaders will focus on a variety of issues, including the global food crisis. Prior to the opening session, the World Bank released a 10-point plan for tackling the food crisis and included recommendations that the G8 should consider.

One of the actions that the World Bank recommended to the G8 was a commitment to revising policies towards bio-fuels due to the competing food security and energy security priorities. The World Bank wants the United States and Europe to ease subsidies, mandates and tariffs on bio-fuels that are derived from corn and oilseeds. The report cited the consensus that bio-fuels have had a substantial impact on land use and food prices (IFPRI, OECD, IMF, World Bank). The report also stated that phasing out production subsidies and reducing tariffs in the EU and the US would allow bio-fuels to be produced from the most efficient feedstock by the lowest cost producers, removing pressure from food prices and allowing for the benefits of bio-fuels without the negative consequences.

You can click on the full 10-point plan here. Hopefully the G8 meetings will take some of the World Bank’s advice and take action this week.

The 4th of July

This Friday, families and friends will gather together across the United States to celebrate our nation’s independence. As Americans prepare for BBQs and parties, they face higher food prices at the supermarket as food staples needed for a BBQ are at all-time highs as well.

The Center for American Progress released a report this week on how much more a BBQ will cost for the average American family this year compared to last year. For a an average sized party, you will have to pay nearly 5% more than you did in 2007 and over 31% what you paid in 2000 .

Here are some notable items that have seen an increase over the past year:

• 3 packages of hamburger buns are up 10% from $3.86 to $4.26


• 2 pounds of macaroni for pasta salad are up 17% from $1.99 to $2.33


• A package of slices of American cheese are up 14% from $3.74 to $3.94


• For dessert, a ½ gallon of ice cream is up 5% from $3.88 to $4.08

Numerous converging factors have contributed to the increase in the price of food for consumers. Only one factor, however, is within control of federal lawmakers -- the government's ethanol policies. Despite the rise in food prices, hope everyone has an enjoyable and happy 4th of July.