Ethanol industry responds to NCCR's RFS attack

By Erin Voegele | June 20, 2013

The National Council of Chain Restaurants has launched a new campaign to repeal the renewable fuels standard (RFS). Representatives of the ethanol industry have been quick to criticize the campaign, which the NCCR has named “Feed Food Fairness ,Take RFS Off the Menu.”

Supporters of the campaign joined Rep. Bob Goodlatte, R-Va., to discuss how they think the RFS adversely impacts their businesses and customers. Rob Green, NCCR executive director, said his organization is committed to repealing the RFS and claimed the program “unfairly increases food and commodity costs for chain restaurants and ultimately American diners and shoppers across the country.”

According to information released by the NCCR, the goal of the campaign is to mobilize small business owners, operators and coalition members to urge congress to pass the Renewable Fuel Standard Elimination Act, H.R. 1461. Goodlatte introduced the bill in April. To date, 32 members of Congress have signed on as cosponsors.

The Renewable Fuels Association called the NCCR’s action “yet another campaign of scare tactics and half-truths” about the RFS, noting that Big Oil and Big Food are desperate to protect their profits at the expense of American consumers.

“Seriously, the chain restaurants should put a sign up saying ‘1 Billion Half-Truths Served,’” said Bob Dinneen, president and CEO of the RFA. “It is a well-documented fact that there is a near perfect correlation between food prices and energy costs. The World Bank recently concluded that almost two-thirds of the post-2004 food price increase is attributable to the price of oil.” 

“Here’s a hot, heaping serving of the truth: Chain Restaurants, livestock producers, and grocery manufacturers are trying to protect cheap, government subsidized corn which allows them to keep more profit in their pockets,” Dinneen continued. “They should instead be praising the RFS which has helped lower gas prices by $1.09 a gallon in 2011 thus allowing more Americans the disposable income to eat out regularly and cruise through drive-thru windows when hungry.”

Rom Lamberty, senior vice president of the American Coalition for Ethanol, called the NCCR’s anti-RFS claims another industry doing the dirty work of Big Oil.  “I suppose the daily experience of charging two bucks for a glass of soda that has a few cents worth of corn sweetener and water gives the fast food folks the ability to keep a straight face when they make this kind of inane argument,” said Lamberty. “At its highest price, corn represented a little more than 20 cents of the cost of a quarter-pound burger, and maybe a nickel of the cost of a large soda,” said Lamberty. “All of these organizations need to realize that their customers don’t have as much to spend on food because they’re spending it on gas, and gas prices will only get higher if groups like NCCR are successful in being co-opted by the oil lobby to protect big oil’s fuel monopoly.”

Growth Energy CEO Tom Buis also pointed to the cost of energy as the primary factor leading to higher food prices. "Only 14 percent of the price of food is attributable to the cost of the commodity, while the rest can be attributed to energy costs and marketing,” he said. “The processing, packaging, wrapping, storage, refrigeration and transportation costs are the true drivers in price increases. They are all energy intensive – it takes a lot to bring food from the farm to the table and food prices will follow with ever increasing oil and energy prices.

The Fuels American coalition has also weighed in on the NCCR’s campaign. “The RFS is an important policy with many benefits – including decreasing our country’s addiction to oil by providing competition in our transportation fuels sector. It is the only policy that can provide consumers with savings at the pump. The NCCR’s insistence upon ignoring these facts leaves a bad taste in our mouths,” said the group. “Study after study shows that oil prices – not the RFS – are the real drivers of increased food prices. Oil is responsible for 84 percent of the price of your corn at the grocery store. Because every part of the supply chain relies on oil – including energy, labor, marketing, packaging, transportation – changes in oil prices affect what consumers pay for food.”