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Beer price hikes will underscore US energy folly

Bob Tippee
Editor

Because Americans are awakening to folly, House Republicans should be careful how they criticize their Democratic colleagues about energy.

Republicans complained to reporters on July 11 that Democrats have been too slow to act on the subject.

"They failed to produce a comprehensive plan in the first 6 months of the year," growled House Republican Chairman Adam Putnam of Florida (OGJ Online, July 12, 2007).

Marsha Blackburn of Tennessee went on to assert that "the public expects us to address our rising energy costs, but this [the Democratic] bill does none of that."

Whoa. Comprehensive plan? Congressional solutions to rising energy costs?

Such meddling by government creates problems. Republicans should be calling for less of it.

The Energy Policy Act of 2005, passed while Republicans controlled Congress, is an example.

While opening little of the vast federal acreage that the US ludicrously excludes from oil and gas development, the comprehensive law addressed rising energy costs by mandating the use of subsidized ethanol and creating generous incentives for other costly forms of energy.

One of the predicted consequences of the ethanol mandate is becoming painfully evident: rising food prices.

The ethanol industry insists that energy, not corn, costs are lifting food prices.

While energy surely affects food prices, ethanol's contribution can't be so easily dismissed. Unlike the demand growth pushing up energy prices, the new demand for corn is an act of Congress. So are the price effects. There's no way to deny this (OGJ, July 9, 2007, p. 76).

Furthermore, ethanol aggravates the energy-price rise that its supporters cite, in part through the incremental rail and truck transport needed to move the material from scattered plants to blending locations.

Public grumbling has begun about the food-price jumps that accompany ethanol's growth. It soon will turn serious.

USA Today reported July 2 that the price of beer is set to leap because farmers are planting corn in fields once dedicated to barley. Prices of the beer ingredient are rising.

If the prospect of jumping beer prices doesn't focus American attention to the harm Congress does with politically motivated energy mistakes, nothing will.

This feature will appear next on July 27.

(Online July 13, 2007; author's e-mail: bobt@ogjonline.com)


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