Midwestern drought, election year politics add to pressure on ethanol

Corn ethanol, the oft-touted answer to the problem of foreign oil, is still suffering problems.

This time, a drop in production--thanks to drought conditions in the midwestern states that produce it--is harming corn ethanol exports and putting further pressure on the fuel vs. food debate.

That pressure also comes in an election year, when ethanol traditionally becomes a hotter topic for debate.

As ieee spectrum reports, the drought has led to poor production of corn, soybean and wheat, meaning lower stocks for food. That's led U.S. livestock producers--and even the United Nations--to lobby the Environmental Protection Agency to temporarily suspend the Renewable Fuels Standard--a mandate that dictates the quantity of ethanol required in gasoline.

The RFS is expected to be replaced by a wider-ranging Low Carbon Fuel Standard that will put less emphasis on ethanol. 40 percent of current U.S. corn crops are used to make ethanol.

Though the U.S. corn ethanol lobby suggests that rising prices won't affect the cost of gasoline to any degree, higher corn prices were said to have contributed a quarter of July's 16 cents per gallon increase in U.S. gasoline prices.

Despite the drought, the worst in 50 years, the agriculture industry isn't suffering too badly.

The Renewable Fuels Association says that U.S. farmers are still on track to produce the eighth-largest corn crop on record this year, while rising prices mean that there's more money to be made from corn right now.

And demand for corn ethanol from fuel companies means any U.S. political candidate is unlikely to waive the EPA's ethanol fuel mandates, and risk losing the support of America's farmers.