Association Blames Partisan Politics

Concerned by lingering debate on the energy bill and what they call misrepresentations of ethanol as a contributor to rising gas prices, the National Corn Growers (NCGA) sent letters to the White House and congressional leadership aimed at dispelling ethanol myths and urging members to put politics aside and get to work on passage of a comprehensive energy bill.

Washington D.C. – April 7, 2004 [] “It’s politics as usual and the American farmer is tired of it,” said Dee Vaughan, president of NCGA. “There’s a lot of doubt in the Corn Belt on whether politicians will actually do what they were elected to do and that is lead. We need the White House and Congress to show Americans that our government works, that an energy bill can get done and that those we send to Washington can do something other than blame someone else for not doing their job.” The letter was a response to several news stories linking ethanol to increasing gas prices. Within a span of two weeks, gas prices have increased from approximately $1.75 to more than $2.07 a gallon (national average). Natural gas prices rose consistently for three days last week at virtually every market location in the nation – trading April 1 at the highest-ever settlement price of $5.933 per MMBtu. The NCGA said the recent increases are due to a number of influences including an extremely low gasoline and crude oil inventory, high crude oil prices due to OPEC, a higher than expected demand due to the growing economy; and, a cold winter that diverted production from gasoline to home heating oil. Recent research dispels the myth that ethanol is the cause of higher gas prices, according to the association. In a recent analysis prepared for the Renewable Fuels Association (RFA), prices of reformulated gasoline (RFG), blended with either MTBE or ethanol, have not risen as fast as conventional gasoline. The report also found that RFG production, as a fraction of overall gasoline production, has remained constant over the last three months, resulting in no evidence that RFG production is problematic. The consistent increase of the gas prices is resulting in higher prices in every industry in the United States and consumers are feeling it even if they don’t drive. The NCGA said increasing production and use of ethanol and biodiesel will: – Promote a “greener” environment (unlike the MBTE additive) – Promote economic growth and job creation – Secure a better, more independent energy policy decreasing the need for imported petroleum products – Help reduce the cost of gasoline The letter send by the NCGA reflects the frustration felt by NCGA’s president and its members. The association urges immediate passage of a comprehensive energy bill that includes a renewable fuels standard (RFS) along with the Volumetric Ethanol Excise Tax Credit (VEETC). “The unstable sources of energy threaten not only the agriculture industry, but every American,” Vaughan said. “We cannot afford to linger any longer on a decision regarding energy. If Congress does not take strong steps to enact comprehensive energy legislation, our country will continue to see devastating effects.”
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