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Ethanol Subsidies: Robbing Peter to Pay Paul

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Our country's biofuels policy is resulting in higher fuel prices, food shortages and increased global warming pollution. The latest person to sound the alarm is not from an environmental group but Irene Rosenfeld, CEO of Kraft Foods, makers of Fig Newtons and boxed Macaroni and Cheese.

Rosenfeld points to poor weather, growing food demand and rising energy prices as other culprits, but she says that ethanol subsidies is one area we can control. Kraft is working through the Grocery Manufacturers Association to change U.S. policy to reflect market forces. They expect that the prices they are paying for commodities will increase by 12 percent in 2008, and there's no reason to expect relief. Under the Energy Bill of 2007, the government decided that the production of ethanol should increase by nine billion gallons in 2008 and reach 15 billion gallons by 2015. Canada passed an ethanol bill in May clearing the way for increases in the amount of ethanol in gasoline to five percent and increases in agrofuel in diesel fuel to two percent at a time when global food stores are at their lowest since the 1970s.

Ordinary people and corporations are getting wise to the ethanol boondoggle, which is costing both a lot of money. But are people aware that ethanol production is actually increasing the heat-trapping emissions that cause global warming? Taking into account fertilizer usage, transportation and the full life cycle analysis of the plants themselves, biofuels such as corn ethanol produce more greenhouse gasses than traditional gasoline. And corn-based ethanol can't solve our energy crisis. Even if we turned all of America's corn into ethanol we would only meet 12 percent of our gasoline demand, according to a study in the Proceedings of the National Academy of Sciences.

So what's the answer? Increasing the efficiency of our automobiles by making them go farther on a gallon of gas is the first step. The next step is to increase our use of cellulosic biofuels (corn stalks, straw, biomass), which burn cleaner, are more energy efficient and take less fertilizer to grow. When a fuel is driving up food prices, causing global warming, and distracting us from the real solutions to global warming, it's time to find another way. Don't just take it from Greenpeace. Ask Kraft.

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