High oil prices add $5.1 billion to cost of food programs

Exxon reached the top of the Fortune 500 list this year - thanks to revenues of $442.9 billion and profits of $45.5 billion.

In fact, oil companies were three of the top five companies on the list. (Chevron and ConocoPhillips were the other two.)

Yet some headlines last week (and tweets and blogs this week) declared that corn-based ethanol was raising food prices - without qualifying where the bulk of food price increases came from - primarily higher energy costs that we all paid to oil companies.

These higher energy costs also drove up the price of producing crops like corn, so the impact there is double.

Exxon's revenues are more than 8 times the value of the entire corn crop this year and last year. Last year's corn crop value: $54.6 billion. This year's: $50.8 billion. At the same time, the cost of producing those crops soared (thanks to high energy prices) and set new records.

Shouldn't the headlines on the Congressional Budget Office report have been "High oil prices add $5.1 billion to cost of food programs"?

(Here's the math for that: If ethanol was responsible for 15 percent of the increase in government food costs, or $900 million, than the total increase in the cost of food programs was $6.0 billion. Subtract $900 million from $6.0 billion and you get $5.1 billion...or $5,100 million. If ethanol was responsible for only 10 percent, high energy costs would be responsible for $5.4 billion.)

The best alternative to oil is not more oil. It's renewable fuels like ethanol. Otherwise next year or the year after we'll be again staring at $100 oil and $4 gas.

It's only a matter of time.