Four myths surrounding U.S. biofuels

The rapid growth of biofuels has elicited claims and predictions concerning the current and future role of these fuels in the U.S. vehicle-fuel portfolio. These assertions are at times based on a false set of assumptions concerning the biofuelʹs market related to the petroleum and agricultural commodities markets, and the nonmarket consequences of our automobile driving. As an aid in clarifying these market relations, the following four biofuel myths are presented: (1) biofuels will be adopted because we will soon run out of oil, (2) biofuels will solve the major external costs associated with our automobile driving, (3) biofuels cause food price inflation (the food before fuel issue), and (4) biofuels will become a major vehicle fuel.