Ethanol and Drought

Blog, Energy, Les Routledge

In this year when the USA is facing a severe drought, would it not make sense to lift the ethanol blending mandate in the USA?  This week, the United Nations Food Agency called on the USA to suspend its production of ethanol.

By its nature, a blending mandate creates a non-market based floor under the demand associated with producing ethanol.  In this year of shortage, it would be advisable to place a moratorium on the mandate and allow grain to be diverted into food production processes.