FAPRI Analyzes Energy Bill

John Davis

fapri.jpgThe Food and Agricultural Policy Research Institute at the University of Missouri has completed an analysis of the new energy bill, and the results seem to point to some pretty positive results from the legislation.

FAPRI reports the Energy Independence and Security Act (EISA) of 2007, signed into law by President Bush on December 19th, will have positive consequences for biofuels in the short and long term. From the report’s summary:

Relative to baseline projections developed in early 2007, the implementation of the selected provisions of EISA would have important implications for biofuel and agricultural markets.

• Under a range of plausible assumptions, the EISA mandates result in more ethanol and biodiesel production than would otherwise occur.

• Higher levels of biofuel production translate into increased use of corn and vegetable oil. This increase in demand results in higher prices for corn, soybeans and most other agricultural commodities.

• Higher crop prices translate into reduced taxpayer costs of government farm programs and higher levels of crop producer income.

• Impacts of higher mandates are very sensitive to the price of petroleum and assumptions regarding the extension of current biofuel tax credits and tariffs.

You can read the full analysis by clicking here.

Biodiesel, Ethanol, Government, News