Ethanol Industry Losing Clout In Congress As Food Prices Rise

By LAUREN ETTER
October 11, 2007; Page A8

The stalling ethanol industry wants Congress to mandate greater use of the biofuel. But many of the industry's former friends have turned against it amid soaring prices for corn and other grains.


Congress gave a big boost to ethanol in 2005, when it mandated that oil refiners blend 7.5 billion gallons of renewable fuels such as ethanol into the nation's gasoline supply by 2012. The farm lobby was united behind ethanol as a way to strengthen rural economies. Environmental groups backed it as a way to fight global warming and lessen the nation's dependence on foreign oil. Even the petroleum industry was supportive.

Since then, dozens of ethanol plants have sprouted around the country, turning corn into fuel. The rise of the industry has helped to boost grain prices and create jobs in farm states.

But ethanol production today is close to reaching the 7.5-billion-gallon level in the 2005 law. Oversupply has forced down prices and driven some ethanol producers into trouble. Producers and corn farmers are lobbying hard for Congress to boost the requirement anew to ensure that demand can soak up the rising production.

Wall Street Journal, Oct. 12, 2007