ST. PAUL -- U.S. airlines can't keep up with fuel costs, so they add new fees for even one piece of checked luggage. Farmers watch and worry as input prices soar. The post office raises the cost of stamps to help compensate for rising gas prices. Families scale back on summer travel to cope with gas prices now twice as high as the summer of 2005.
Every day brings more evidence that record-high gasoline prices are having a massive impact in every corner of our economy. America desperately needs to find ways to move beyond its addiction to fossil fuels. So it puzzles me at a time of record oil prices to hear renewable fuels opponents so casually writing off America's first steps toward alternative fuels.
Some of this message is the result of calculated efforts from groups such as the Grocery Manufacturers Association. Sensing an opportunity to advance its agenda, this organization of food companies created a high-profile public relations campaign to mislead consumers into focusing on ethanol as the primary culprit behind rising food prices even though only 20 percent of the price grocery shoppers pay for a food item is because to the actual food cost and the rest is for non-farm costs such as advertising, packaging and transportation.
High price factors
This is not to say that there isn't real pain out there. Rising grain prices indeed are causing headaches in some corners of our economy particularly for those farmers and ranchers raising livestock.
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However, we need to keep two things in mind.
First, grain prices are being driven up by a combination of factors, including record energy costs, increasing demand from Asian markets and speculative investing in commodities markets by large financial interests.
Second, ethanol and renewable fuels are a tiny part of that mix.
Even if we could magically remove renewable fuels from the picture, prices for grains, food and fuel still would be high. In the case of gas prices, renewable fuels actually have had a positive effect by reducing our reliance on petroleum. One recent U.S. Department of Agriculture expert estimated that if not for ethanol blending into gasoline, gas prices would be higher by as much as 35 cents per gallon.
We've said many times that our current first-generation renewable fuels are not perfect. From an economic, environmental and social standpoint they are better than fossil fuels, but they are not the ultimate solution. Instead, they are best seen as a bridging technology -- a necessary first step away from fossil fuels and toward the more promising biofuels of the future.
The good news is Minnesota isn't just waiting around for someone else to develop these fuels of the future. The state is playing a key role in ushering in new technologies through our private-sector renewable fuels industry and through its NextGen Energy Board established by Gov. Tim Pawlenty and state legislators. The NextGen board is researching how the state can best invest resources to achieve energy independence, resources sustainability and rural economic vitality. This won't happen overnight, but we will get there if we keep up the effort.
With Minnesota gas prices lingering around $4 per gallon, I hope that we all recognize the need for this kind of sustained effort. But if the current pain at the pump isn't enough incentive, just wait a few weeks.
Editor's Note: Hugoson is Minnesota's agriculture commissioner.
