Thursday, June 12, 2008

DOE and USDA Respond on Biofuels

Department of Energy DOE ethanol biofuelsSenate Energy and Natural Resources Committee Chairman Jeff Bingaman (NM) recently requested information about biofuels production and food prices from both the secretaries of the US Department of Agriculture (USDA) and the US Department of Energy (DOE).

Today both agencies responded with a joint letter (pdf).

USDA Department of Agriculture biofuels ethanolEnergy Secretary Samuel Bodman and Agriculture Secretary Ed Schafer noted the complex nature of food and fuel price issues and advised the senator “against hasty judgments driven by highly questionable, agenda-driven calculations, some of which have been featured prominently in the popular press.”

The secretaries also answered questions relating to the production of biofuels and the price of both food and fuel.

Food They responded that biofuels accounted for approximately 3-4 percent of the overall rise in domestic retail food prices. They also noted the many other factors contribute to higher commodity prices including increased demand for food; lowered production and reduced stocks due to weather; export restrictions and - record prices for gasoline and diesel fuel that have increased “the costs of producing, transporting, and processing food products.”

Fuel They said that ethanol is helping to keep fuel prices lower, “We estimate that, if we had not been blending ethanol into gasoline, gasoline prices would be between 20 cents per gallon to 35 cents per gallon higher.”

Source: USDA (pdf)

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