Biofuels / Corn-Based Ethanol

Summary

• Global warming also a major factor in rising world food prices
• Ethanol is playing an important role in our transition away from fossil fuels
• We may have to switch to different types of ethanol

Summary

• Ethanol subsidies should be eliminated
• Such subsidies distort the world market price and have drastically increased food prices around the world
• Bio-fuels are an important part of the solution

RUSSERT:
Would you be willing to change ethanol subsidies or suspend some of these requirements so that people are not using corn for ethanol, but using corn for food and lowering food prices.

OBAMA:
Well, look, we, we've got a serious food problem around the world. We, we've got rising food prices here in the United States. In other countries we're seeing riots because of, because of the lack of food supplies. So this is something that we're going to have to deal with. There are a number of factors that go into this. Changes in climate are contributing. The, the fact that in a lot of countries, you know, we've had problems getting food supplies to poor countries because the wealthier countries have reduced their stockpiles in, in serious ways. And so there're a whole host of reasons why we're seeing problems with food supply. There's no doubt that biofuels may be contributing to it. And what I've said is, my top priority is making sure that people are able to get enough to eat. And if it turns out that we've got to make changes in our ethanol policy to help people get something to eat, then that's got to be the step we take.

But I also believe that ethanol has been a important transitional tool for us to start dealing with our long-term energy crisis ultimately. Over time we're going to shift to cellulosic ethanol, where we're not using food stocks but we're using wood chips, we're using, you know, prairie grass, we're using...

"I would eliminate ethanol subsidies. I would eliminate the tariff on imported ethanol. I think our market is being very badly distorted as far as food prices are concerned. I know you know food prices skyrocketed 17 percent in a very short period of time. That's because we're distorting the market. I'm for biofuels, I'm for all that stuff, but let's let the market play. Let's not subsidize ethanol or any other alternate form of energy. Let's go ahead and take away the imports. Let's eliminate sugar protection. My God, it's amazing, still, the power of some of the sections of agriculture in America. And let's eliminate loopholes that are specially targeted, rifle-shotted to specific industries and – both agriculture and business, and let's let them all compete."

May 4, 2008
Meet the Press Interview
with Tim Russert

Link to Source

April 15, 2008
Interview with Larry Kudlow
Kudlow & Company