CNBC Focuses on Ethanol

Cindy Zimmerman

Ethanol’s role in higher food prices was the focus of CNBC’s Street Signs program on Friday.

One segment featured Ethanol Promotion and Information Council director of operations Robert White, along with Sean McBride of the Grocery Manufacturer’s Association and New York Times columnist Roger Cohen.

CNBC Street SignsWhite and Cohen were in the position of defending biofuels. Leading in with a story that the Texas governor is calling for waiving half of the Renewable Fuels Standard to help cut food prices, White noted that there have been multiple studies, “including one from the great state of Texas this past month that clearly state that it’s energy prices, in particular petroleum prices, that are driving up food prices – three times as much as anything that commodity prices could do – ethanol just being one of those components of the corn market.”

Cohen, who has a column today about the issue, noted that there are many issues driving food prices up and he is “worried about this hysterical scapegoating of ethanol and all biofuels.”

“My fear is that we are going to throw out the baby with the bathwater,” Cohen said.

The reporter questioned why the ethanol industry needs subsidies to be competitive and White made the point that the main subsidy is a blenders credit to encourage oil companies to use ethanol, while the tariff on ethanol imports is to offset that credit meant to encourage domestic production of the fuel.

GMA’s McBride admitted that there are other factors driving food prices but claimed that as much as a third of the food price increases were due to “our food to fuel mandates that were passed in 2007.” Cohen disputed that figure. “For every theory, there is an institute putting out a report backing it up,” he said.

Listen to the CNBC segment here.

Ethanol, News