Flooding Muddies the Push for Ethanol. By David Shepardson, Detroit News, June 23, 2008. "Massive flooding in the Midwest has ruined millions of acres of crops, spurring record corn prices and raising serious questions about whether the U.S. can meet new requirements for using corn-based biofuels... A sweeping federal energy bill signed into law in December requires the production of 9 billion gallons of biofuels this year, nearly all of it corn-based ethanol, up from 6.5 billion in 2007... [although] a backlash is emerging... The damage to the corn crop -- as much as 4% of total U.S. corn production, or 3.3 million acres, could be lost -- is pushing up ethanol prices... The wholesale price... rose 40 cents a gallon in the last month as corn prices have doubled in the past year to an all-time high of nearly $8 a bushel. Some energy analysts now say the government may have to suspend the biofuels mandate because at those prices it's not profitable to make [the fuel], and because 400 million gallons of production has been lost because of the floods. [But] Bob Dineen, president of the Renewable Fuels Association, said ethanol is still a good deal. 'Abandoning our commitment to ethanol and biofuels... would absolutely force the price of gas through the roof and require the import of more record-high foreign oil.' [Besides,] Congress isn't likely to pull back on the biofuel mandates in an election year, despite the continuing rise in food prices and the challenges that now exist because of the floods. Additionally, support remains strong in farm states to leave the mandates in place."
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