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Breaking the Cartel

Fortnightly Magazine - September 2008

create an enormous amount of attention with that kind of money.


Fortnightly: Biofuels seem to have lost their luster recently, as various reports have shown diverting croplands to fuel production causes rising food prices and ultimately starvation in the poorest countries. What’s the realistic near-term role of biofuels in the U.S. energy supply?

Luft: We’ve all been subjected to a campaign of lies and fabrications, funded by defenders of the status quo who want to blame biofuels for all the world’s problems, from poverty to hunger to planetary changes. There’s no doubt food prices are going up, but it’s simply not true that biofuels are causing most of it. What’s causing the increase in food prices is primarily the increase in oil prices, more than 40 percent this year alone. Fertilizer, transportation, packing, processing … everything is affected by the increase in energy costs.

Instead of complaining about biofuels we need to augment our biofuels program to collapse the price of oil. Biofuels today are the only solution that can compete with oil. They’re the only thing keeping oil prices from going through the ceiling. If not for biofuels, we’d be paying at least 15 percent more for oil, which would cost our economy $80 billion this year alone. The biofuels program is costing us $4 billion, so it’s a good deal for us to send $4 billion to American farmers rather than $80 billion to countries that hate us.


Fortnightly: If concerns about biofuels are driven by disinformation, where’s it coming from?

Luft: I know who’s behind it. It’s primarily the processed food manufacturers.

In the United States almost everything sweet uses corn. Candy, soda, marshmallows … flip the package over and read the list of ingredients. You’ll see most of it is corn, in the form of corn syrup or dextrose. The processed food companies are accustomed to paying $2 or $3 a bushel for corn, but now prices are high. Companies like Nestle and Kraft have to pass the costs on to consumers, so they find boogeymen to take the blame. They’ve found ethanol. 1

It’s also a lie that the rising price of food is causing starvation. The poorest people in the world grow food for a living, so now they’re making more money. It’s a complete lie that they are being starved by higher food prices.

If you really care about poor people, the first thing you need to do is break the oil cartel. This is what’s driving people into starvation, because their economies have to pay $120 a barrel for oil. They don’t get a discount for being poor.


Fortnightly: What role do you see electricity playing in making America more energy independent?

Luft: Electric transportation is perhaps the biggest piece of the puzzle. As a transportation fuel, electricity is superior to gasoline on almost every level, in terms of cost, the environment and national security. As we shift from oil to electricity, we’re shifting from an imported resource to a primarily domestic resource. People forget that with electricity we already are