Falling U.S. demand for gasoline has combined with high corn prices to force the closure of several U.S. ethanol plants. Ethanol makers are actually losing money on every gallon of the fuel they make this year, but they can’t stop making the stuff because the Renewable Fuel Standards enacted during the George W. Bush administration mandates production of 13.2 million gallons of ethanol to mix with gasoline this year.
The Obama administration is required to rule by next Tuesday on whether or not to suspend the regulation as it has been asked to do by a wide range of ethanol makers and politicians from both sides of the political aisle. In order suspend the regulation, the administration has to declare that the mandate is causing economic harm.
That won’t be easy to do. Objections from farmers to suspending the standard have long be a determining factor in the maintaining the…
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