1. Renewable Fuels – The Basics What is the RFS? What is the VEETC / ethanol tax credit? What is the ethanol tariff? What are waivers?

3. “The Effects of Ethanol on Texas Food and Feed” Texas A&M, April 2008 “Relaxing the RFS does not result in significantly lower corn prices.” “—with a one-quarter RFS waiver price falling about $0.30 per bushel below the full RFS price a few years hence, and the one-half RFS waiver price falling about $0.50 to $0.60 per bushel below the full RFS expected price.”

4. Food and Agriculture Policy Research Institute FAPRI, January 2008 “—implementation of EISA’s RFS (in the absence of the tax credit) will raise corn prices about 19% — the ethanol tax credit of $0.51 per gallon (in the absence of the RFS) supports corn prices by a slightly smaller 11%. Because of the interactions between the two subsidies, it is estimated that joint implementation of both the RFS and tax credit supports corn prices by about 20%.”

5. What is the Net Cost of Ethanol? Lowers gasoline prices Merrill Lynch – ethanol driving a 15% reduction in gasoline prices Iowa State University – ethanol lowers gas prices $0.29 to $0.40 per gallon Texas A&M - $0.42 per gallon At 140 billion gallons of gasoline consumed per year, a 40¢ price reduction gets you $46 billion in lower gas costs at the pump…

6. Cellulosic Ethanol- next generation Waiving the RFS will not allow us to get to next generation – cellulosic ethanol. No guaranteed market -will not allow for investment in new technologies to diversify from corn. Opportunities involving- switchgrass, wood chips, algae, corn stover, etc

7. Benefits from Ethanol Reduces the reliance on foreign energy sources Creates new jobs and economic growth in rural areas Enhances the environment Consumers and tax payers are the big winners

8. So what’s behind higher food prices? Increasing demand around the world Years of dwindling world stocks Falling dollar Increased participation in commodity markets Billions of bushels in new U.S. corn demand Cost of production

9. So what’s behind higher food prices? Increasing demand around the world Years of dwindling world stocks Falling dollar Increased participation in commodity markets Billions of bushels in new U.S. corn demand Cost of production

10. Source: Robert Genetski, ClassicalPrinciples.com

11. So what’s behind higher food prices? Increasing demand around the world Years of dwindling world stocks Falling dollar Increased participation in commodity markets Billions of bushels in new U.S. corn demand Cost of production

14. Source: The ProExporter Network