November 5, 2007

 

US ethanol sector plans PR campaign to counter criticism

 

 

With ethanol facing a growing barrage of criticism, a new industry group plans to launch a splashy ad campaign this week that will appear in popular Capitol Hill publications, including The Hill and Roll Call.

 

The group, Renewable Fuels Now, brings together existing agriculture and ethanol groups, including the Renewable Fuels Association and the National Corn Growers Association, under the direction of New York-based public relations firm Manning Selvage & Lee, which specializes in corporate and crisis communications.

 

It is firing what it calls an opening salvo at a time when the industry is under siege from an army of groups accusing the corn-based biofuel of perpetrating everything from environmental ruin to "crimes against humanity" for contributing to world hunger.

 

"The ethanol industry has been on the receiving end of a lot of hot sticks in the eye, and they have just been taking it," says Randolph Court, a spokesman for the new group. "They don't want to keep taking it any more."

 

The group says it is coming out now as a way to clear up misconceptions about ethanol at a time when the industry's future is fraught not only with aggressive opponents, but also with uncertainty.

 

Congress is currently deliberating whether to increase the so-called Renewable Fuels Standard, a provision in the 2005 energy bill which requires oil companies to blend 7.5 billion gallons of renewable fuels in the nation's fuel supply by 2012. Since that number is expected to be reached by next year, the ethanol industry fears that without an increase oil companies won't be inclined to use the fuel. Already a glut of supply on the market has driven the price of ethanol down to levels that make some plants unprofitable.

 

The first advertisement resembles a hostage note, and features mismatched paper cut-out letters that form a sentence reading: "How much longer can we be held hostage to foreign oil?" The initial ad campaign won't be the last, the group says.

 

Over the past six months, the ethanol industry, which has rapidly expanded over the past year, has consistently come under fire from food companies and livestock groups that accuse the ethanol industry of driving up the price of corn, thereby making basic food products - like a breast of chicken or a can of soda - more expensive.

 

The National Petrochemical and Refiners Association, which represents major oil refiners, has been outspoken against the industry, saying current ethanol policy is distorting markets.

 

But in recent weeks the ire against ethanol has mushroomed into a public-relations disaster. Opposition moved beyond the usual suspects to include environmental groups, religious groups, health groups and anti-hunger groups.

 

This week Jean Ziegler, the United Nations Special Rapporteur on the Right to Food, said using food crops for biofuels amounts to a "crime against humanity." The National Corn Growers issued a swift response saying that the group was "outraged" by such statements and called for the resignation of the official.

 

Also this week Oxfam, a world-wide anti-hunger group, released a study titled "Bio-fuelling Poverty" that criticized the European Union for mandating that members' transportation fuels be blended with 10 percent biofuels.

 

The anti-ethanol rhetoric has turned into an almost daily tit-for-tat among food companies, oil companies and the ethanol industry. On Monday, the Renewable Fuels Association, the long-time Washington trade group, released a poll that found 46 percent of Americans believe rising oil prices is the primary cause for increased food costs, while just 7 percent blamed ethanol.

 

That day a conflicting poll was released by Hormel Foods Corp. (HRL), maker of Spam, and America's Second Harvest, a national network of food banks, which found that 60 percent of Americans agree "that ethanol use is increasing the cost of corn, and thus food, and that it is at least part of the reason that more Americans are going hungry."