Bush v. Chávez II — The Ethanol Showdown

President Bush, still fresh from his recent trip to South America, touted progress in sealing a deal with Brazil to develop its ethanol industry for export to the United States. In a sense this was Bush's double play against both the Middle East and Venezuela President Hugo Chávez who, despite being thorns in Mr. Bush's side, cannot be ignored as long as the U.S. remains dependent on foreign oil. Clearly, this new deal made Chávez nervous. Not only did he scamper to Argentina during Bush's Brazil visit to drum up the anti-American fervor, he dragged Cuba's Fidel Castro out of his deathbed to rail against the diversion of food crops to biofuel production. Antics aside, though, Chávez and Castro have a point: Ever since Bush unveiled his Renewable Fuel Standards initiative — requiring the country to use 7.5 billion gallons of renewable fuel over the next six years — demand for corn has gone through the roof, increasing the prices of dependent commodities from wheat futures to pork bellies. Is America ready to pay more for food in exchange for lessened dependence on foreign oil? We'll see.