CIBC World Markets chief economist blasts Bush energy policy, says “the only thing Bush’s renewable energy policy will fuel is inflation”

In Canada, the chief economist of CIBC World Markets, criticizing the US drive to increase ethanol production, said that “the only thing Bush’s renewable energy policy will fuel is inflation”.

Jeff Rubin linked expansion of ethanol to a 60 percent increase in corn prices, and said food inflation would top 5 percent in 2008 and approach 7 percent in 2009. He said that soaring corn prices passed directly into animal feed costs and tortillas, but are also causing increases in the costs of other grains as corn production replaces other types of production.

He said that corn production for ethanol uses up 13.5 percent of all corn production in the United States, and produces 6.2 billion gallons of ethanol which is equivalent to a one percent reduction in US gasoline consumption. He said that reaching President Bush’s 35 billion gallon ethanol target by 2017 would reduce gasoline consumption by only 6.5 percent.

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