Home > Economics, Environment > The Great Biofuel Fraud

The Great Biofuel Fraud

F. William Engdahl writes in Asia Times:

That bowl of Kellogg’s cornflakes on the breakfast table or the portion of pasta or corn tortillas, cheese or meat on the dinner table is going to rise in price over the coming months as sure as the sun rises in the East. Welcome to the new world food-price shock, conveniently timed to accompany the current world oil-price shock.

Curiously, it’s ominously similar in many respects to the early 1970s when prices for oil and food both exploded by several hundred percent in a matter of months. That mid-1970s price explosion led the late US president Richard Nixon to ask his old pal Arthur Burns, then chairman of the Federal Reserve, to find a way to alter the Consumer Price Index (CPI) inflation data to take attention away from the rising prices.

The result then was the now-commonplace publication of the absurd “core inflation” CPI numbers – sans oil and food.

…What’s driving this extraordinary change? Here things get pretty interesting. The administration of US President George W Bush is making a major public relations push to convince the world it has turned into a “better steward of the environment”. The problem is that many have fallen for the hype.

…The heart of the plan is a huge, taxpayer-subsidized expansion of use of bio-ethanol for transport fuel. The president’s plan requires production of 35 billion US gallons (about 133 billion liters) of ethanol a year by 2017. Congress has already mandated with the Energy Policy Act of 2005 that corn ethanol for fuel must rise from 4 billion gallons in 2006 to 7.5 billion in 2012.

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Categories: Economics, Environment
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