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Larger than expected corn crop should doom Perry's ethanol requestTexas Gov. Rick Perry's request that the federal government cut ethanol production by 50 percent will likely be rejected after the U.S. Department of Agriculture predicted this year's U.S. corn crop will be the second largest in more than 60 years, according to David Gibson, executive director of the Texas Corn Producers Board. "We are going to have enough corn to meet our needs for food, livestock feed and to continue producing a low-cost fuel that reduces gas prices for consumers," Gibson said. "Corn prices on the futures market have dropped nearly 12 percent over the past two weeks as evidence has mounted that the Midwest is recovering from the recent floods." On July 11, the USDA's monthly World Agricultural Supply and Demand Estimates report raised the estimate of this year's total U.S. corn supply by 200 million bushels over last month's estimate in spite of the Midwest floods. In April, Perry asked the Environmental Protection Agency to cut the amount of ethanol in the nation's fuel supply by 4.5 billion gallons this year. If the request were approved, oil refiners would have to increase their output of gasoline by 4.5 billion gallons thus increasing oil imports and the price of gas at the pump, Gibson said. "At current prices, ethanol made from corn costs about a dollar per gallon less than gasoline made from crude oil. Replacing 5 to 6 percent of our gasoline with cheaper ethanol is the only national program we have to help lower the cost of driving for hard-pressed American families," Gibson said. Researchers at Texas A&M University released a study in June that said the price of gasoline would be $0.42 per gallon higher without ethanol. In Washington July 10, Deputy Assistant Energy Secretary Steven Chalk told a Senate committee that any reduction in the ethanol standard would sap investment in biofuel technology and undermine efforts to wean the nation off oil and reduce greenhouse gases. The Houston Chronicle and the San Antonio Express-News last week reported that a major poultry producer, who would profit from lower corn prices, made a $100,000 political contribution shortly before Perry made the request to cut the ethanol standard. "We always suspected that the governor's assault against ethanol had more to do with politics than what's best for Texas families who are struggling to deal with high gas prices," Gibson said. 7/21/08 Date: 7/17/08 Advertisement
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