The Madness of US and EU Biofuels Policy

Sometime you just cannot make sense of the madness.

In its desire to rid itself of the ravages of foreign oil addiction, the US is subsidizing domestic ethanol production.

The success of this programme means that nearly four out of ten bushels of this year’s corn crop will be made into fuel for your car.

But here’s the rub – aside from the blatently obvious fact that this food to fuel policy is forcing up food prices – This ethanol is now being exported in record quantities.

Recent US government data showed that 251m gallons in fuel ethanol were exported in the nine months to September 30, more than double the 2009 total.

So on the one had the US is subisidising ethanol production to wean itself of foreign oil, but that oil is now being exported to foreigners.

Does it make sense? Of course not.

The Madness of US and EU Biofuels Policy | The Price of Oil