Supporters defend ethanol

June 15, 2007 at 10:04 PM
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JANESVILLE, Minn., June 15 (UPI) -- Don't blame ethanol producers for high food prices in the United States, ethanol boosters say, blame the oil industry.

Ethanol supporters unveiled a study showing "rising energy prices had a more significant impact on food prices than did corn," said agriculture economist John Urbanchuk, because while corn is an ingredient in some foods, energy is a component in everything.

By Urbanchuk's estimate, a 33 percent rise in corn prices would lift consumer food prices roughly 0.3 percent, The (St. Paul, Minn.) Pioneer Press reported Friday. A similar rise in gasoline prices would have a bigger impact, he said.

The oil industry's response? No way.

Art Wiese with the American Petroleum Institute said the study is flawed in several areas. He said it understated the impact of higher corn prices and overstated the impact of gasoline costs -- and he noted ethanol is a component of higher fuel costs.

"Adding their own product to gasoline increases transportation costs, and thus, food prices," Wiese said.

Amid the arguments, the ethanol boom continues in Minnesota, where Gov. Tim Pawlenty broke ground on a 100-million-gallon-a-year ethanol plant in Janesville, owned by U.S. BioEnergy.

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