Recent comments by John Powell, the deputy director of the UN World Food Program, have drawn return fire from GM CEO Rick Wagoner at the Beijing Motor Show. Powell blamed biofuels in part for the recent run up in food prices around the world that has resulted in more poor people not being able to afford food. Speaking at the Beijing Motor Show Wagoner called critics "shockingly misinformed" saying that high fuel prices are a much bigger factor in food costs than the diversion of food stocks to fuel production. Wagoner acknowledged that a dramatic increase in corn ethanol production and use could ultimately increase food prices further. Currently ethanol availability in the US is limited anyway with only about 1,200-1,300 E85 stations nationwide. GM's focus is on helping to develop cellulosic E85 production through investments such as their stake in Coskata. To some extent, Wagoner is probably correct in blaming increasing fuel prices. However, part of the reason oil has gotten so expensive is huge increases in demand from China and sustained high demand from the U.S. Shifting energy consumption from petroleum to biofuels will not do anything to address this fundamental problem. Until we dramatically cut back our energy consumption prices will likely stay high for both food and fuel. One upside is that this might help address the over consumption of food in the U.S.
[Source: Green Fuels Forecast]


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