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Ag Secretary Says Ethanol Mandate Benefits Far Outweigh Negatives

The Environmental Protection Agency (EPA) decision not to cut the Renewable Fuels Standard (RFS) by half was a "watershed decision for the United States of America," said Secretary of Agriculture Ed Schafer during a tour of the Farm Progress Show held in Boone, Iowa.

Schafer made the remarks as the show, held for the first time at its permanent Iowa location, began to wrap up on its final day. Considered the largest outdoor farm show in America, the event moves to Decatur, Ill. next year.

Secretary of Agriculture Ed Schafer addressed attendees at the 2008 Farm Progress Show in Boone, Iowa.

Schafer said the federal mandate to have a minimum amount of renewable fuel in the nation's auto fuel is a conscious decision to begin moving towards a new way of providing energy through renewable fuels.

"This system does affect food and livestock, but it's become apparent that the RFS is moving this country in the right direction," he said. "Global demand for food is impacting food prices much more than ethanol is."

The RFS is a mandate that requires at least 9 billion gallons of renewable fuel in 2008 and 11 billion gallons in 2009 in the nation's automobile fuel supply. The request to cut the mandate by half came from Texas Gov. Rick Perry earlier in the year. Perry claimed ethanol was driving corn prices higher and thus, causing food and livestock feed prices to go higher as well.

Schafer said the EPA rejected that argument based in part on the cost vs. savings analysis. He says Perry claimed that higher food and feed prices caused $1.2 billion in economic damage to Texas' livestock industry. But the U.S. Energy Department determined that Texas motorists saved 25 to 30 cents per gallon for gasoline as a result of ethanol stretching fuel supplies — resulting in a $4 billion savings to Texas drivers.

"The overall benefit of the RFS is domestic security and lower cost of fuel to people of the United States," said Schafer. "For all those nay-savers out there, this was the right decision and it puts us in the right direction."