Along with higher taxes, Maryland consumers can expect higher food and fuel prices in coming years thanks to the energy bill Congress passed recently and President Bush signed last week. If you thought $4 for a gallon of milk was high, just wait.
Rep. John Dingell, D-Mich., chairman of the House Committee on Energy and Commerce, billed it as a “substantial down payment toward reducing our dependence on foreign sources of oil and reducing greenhouse gas emissions.” That?s like saying a piece of gum is the best solution to plugging a hole in a dam.
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The reason is a key provision in the legislation demanding higher ethanol production to substitute for oil. By 2022 it requires farmers and manufacturers of ethanol, including those making an experimental and commercially unproved type made from grasses and wood chips, cellulosic ethanol, to increase production from 7 billion gallons per year today to 36 billion gallons per year.
Since most ethanol is made from corn at this point in time, higher demand for corn for fuel means higher prices for livestock feed, including that for Maryland chicken farmers. It also means farmers will shift grain production to corn to capitalize on the higher prices, driving up costs for other grains. That translates to higher prices at the grocery store and higher pries at the pump as ethanol is more expensive to produce than gasoline.
But the worst part of the bill is the lie at the heart of it ? that ethanol will reduce our dependence on foreign oil.
A 2007 Government Accountability Office report says that alternative fuels and technologies “by 2015 could displace only the equivalent of 4 percent of U.S. annual consumption. Under these circumstances, an imminent peak and sharp decline in oil production could have severe consequences, including a worldwide recession.” With oil production holding steady over the past two years and demand outpacing replacement through new finds and new technologies ability to extract oil from previously unreachable places ? the scenario is not far fetched.
As Rep. Roscoe Bartlett, R-Md., said, if Congress really cared about energy dependence it would be devoting billions to a Manhattan Project ? in reference to the effort by the U.S., United Kingdom and Canada to build a nuclear bomb during World War II ? for alternative energy, instead of giving handouts to corn states.
He?s right. This bill is “grossly inadequate” and prolongs our dependence on oil with only minor incentives to boost energy efficiency through higher fuel standards and the use of more energy efficient technologies.
What we need is real leadership on developing alternative fuels and preparing for an oil shortage. Most reasonable people agree that the question is no longer if oil will run out, but how to prepare for shortages caused by political instability, depleted fields and difficulties pumping crude from hard to reach places like deep water. Do we really want to wait for a worldwide recession to invest in alternatives? We prepare for potential military conflicts, so why not losing access to petroleum ? which supplies about 40 percent of U.S. energy ? and 70 percent of the fuel for transportation? Rep. Dingell and Sen Jeff Bingaman, D-N.M., chairman of the Senate Committee on Energy and Natural Resources, owe we the people a real report on the stability of the U.S. energy supply and a pathway to achieve energy independence. Higher prices for food and fuel make no senseunless they help to create real replacements for oil.
