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The U.S. Biofuel Scam: A View from Abroad

By Caroline Boin -- March 9, 2010

The U.S. Department of Agriculture (USDA) has estimated that one quarter of America’s corn cereal production in 2009 went to biofuels, which in effect turned cheap food into expensive fuel.

Despite pushing up food prices and having unintended consequences for the environment, the U.S. Environmental Protection Agency (US EPA) recently reiterated its support for ethanol. President Obama also promised continued investment in advanced biofuels in his recent State of the Union address.

Bad Economics

A leaked paper on the 2007/2008 food crisis by the World Bank Development Prospect Group estimated that U.S. and European Union biofuel production was responsible for 75% of the price rises–a far cry from the 3% estimate by USDA.

Biofuels from crops like corn, sugar, and palm oil have more than tripled since 2000. In accordance with its 2007 energy bill, America is targeted to increase biofuels production to 15 billion gallons by 2012 and 36 billion by 2022, up from the current 10.6 billion.…