The President of the World Bank [via NPR] says demand for ethanol and other biofuels is a "significant contributor" to soaring food prices around the world. Robert Zoellick says droughts, financial speculators and increased demand for food have created "a perfect storm" of climbing food prices. In the U.S., the price of corn has more than doubled due, in part, to the demand for alt fuels such as ethanol. The World Bank figures food prices will stay high, or go higher, over the next couple of years. "Biofuels is no doubt a significant contributor," says Zoellick. "It is clearly the case that programs in Europe and the U.S. that have increased biofuel production have contributed to the added demand for food." As we reported last week, some 20 percent of last year's U.S. corn crop went to ethanol production; it's likely to reach 30 percent next year. Boondoggles can be lethal.
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Boondoggles can be lethal, but then again, probably the number one reason Americans keep getting fatter historically is dirt cheap corn for snacks and sweetness. Running cars on moonshine makes no sense, but the potential economic effects are not all bad.
I heard this on NPR this morning. I still do not understand a few basic components of the problem. Ever since the introduction of US Farm Bills, with their massive subsidies, third world farmers have complained that world agricultural product prices have been kept artificially low. Some countries even brought suit successfully against the U.S. at the WTO (cotton comes to mind). Now some of these same farmers are complaining that world food prices are too high.
Is it that world prices are up due to inflation? Because that would be a killer. Rising relative food prices should actually encourage farmers to switch production to that crop, thus increasing supplies.
From the NPR report this morning, it seems that rice is a main problem. Whereas in the U.S., when agricultural products become too expensive, we switch to an alternative (grapes instead of oranges, soy instead of wheat, etc.). However, in Asia, people are incredibly (culturally) dependent on rice, and do not typically substitute with another form of starch when prices are high.
There are many solutions to this problem: cut first world subsidies, increase land under cultivation, change dietary habits slightly, genetically modify ethanol crops so that they cannot be used in the food market, whatever.
“Fuel or Food – Choose one”
Please….
Next thing you know, there will be a yellow armband to remind the peoples of the fight against Darth Ethanol.
Make ethanol out of sugar. It is garbage food anyway, one we would be better off without, so who cares if the price goes up. Brazil is energy independent, they make ethanol out of sugar beets.
You would have to relax the current price controls that make the cost of sugar artificially high, and let cheap foreign sugar in.
Brazilian ethanol is cheap because they have the right climate and use peons to do all the work. They are hardly “energy independent” even though they have discovered fairly large offshore oil fields. They are squabbling with Argentina and Bolivia over natural gas and like most of the world, just trying to keep the lights on.
“… The country’s main energy source at present is hydroelectric power, which depends on unpredictable factors such as the amount of rainfall.
Nearly 84 percent of Brazil’s total energy consumption is supplied by hydroelectric power. Other sources are natural gas (4.5 percent), biomass (4.3 percent), nuclear power (2.4 percent) and coal (two percent).
In early November, a prolonged drought affecting strategic parts of the country caused levels of water in hydroelectric dam reservoirs to fall. In order to compensate for the drop in hydropower output, Petrobras was forced to divert natural gas, imported from Bolivia, from the consumer market, to fuel thermoelectric generating stations.
http://www.ipsnews.net/news.asp?idnews=40178
kph, below: 4. Liquid fuels can be made from non-edible feedstocks, including trash and waste plastic. These are the technologies that need support. Agree
I choose food. Our country does not remember what it is like to be hungry, and I’d rather not find out.
1. Taxpayer money is used for subsidies. In essence, our tax money is used to make corn more expensive.
2. Sugar might be feasible, but corn doesn’t come close to the same yields. And growing more sugar means less land to grow other crops.
3. If you really want to get the most energy out of food, you should just burn it in a power plant like coal. But there’s a reason people have never burned their food – they eat it.
4. Liquid fuels can be made from non-edible feedstocks, including trash and waste plastic. These are the technologies that need support.
Anyone with an opinion on biofuels can contact their senators and representative.
Patrick Bedard did a pretty thorough study on the ethanol issue showing that it really didn’t make any sense.
I’m afraid that the use of ethanol has become very mainstream at this point. In metro-Atlanta many of the larger gas stations display labels next to the 87 Octane showing that 10% is made out of ethanol.
Many of the newer models out there won’t be as impacted from this. But I’m not exactly sure how it will effect the older ones. Ethanol has different combustion properties than gasoline and can impact the longevity of certain vehicles as well. Overall, I think the world would be far better off we recycled our biodiesel resources and making B5 diesel an American standard (while subsidizing the costs of performing this operation) vs. using ethanol as a standard within gasoline.
What a foolish and evil humanity we are.
We’re so spoiled by cheap energy (only part of humanity for some 100 years) that we’re ready to literally starve the less fortunate of our species so we can sit one fat ass in a 5000 pound Flex Fuel stupid utility vehicle to drive 3 blocks and buy a 6-pack.
And that’s the truth of it.
Ethanol sucks. And, that’s the truth of it.
There ARE viable alternatives. But the politicans have been bought, so no point in worrying about what could have been.
But in case you’re interested…
http://www.changingworldtech.com (making bio-diesel oil from garbage, offal, sewage)
Whenever crops are used for fuel, the cropland must be replaced to produce adequate food. This is particularly acute in the tropics. Tropical rainforests sequester huge amounts of CO2, and if you turn them into cropland, there is a huge carbon debt which can take hundreds of years to repay. The repayment time is shorter in the temperate zone, but it’s still on the order of tens of years, something we can’t afford. Ethanol from waste would get around that problem, but the scientists need to figure out how to make it cost effective. But corn ethanol is pretty much a disaster.
Petroleum has been so throughly demonized in terms of carbon production and dependence on it being supplied by less than savory countries that when Ethanol came along, it seemed like a miracle fuel.
Let’s face it, this is the result of our headstrong rush to save the world.
Ethanol was everything that petroleum wasn’t. It was renewable. It was clean. It didn’t come from the Middle East. Too bad in our rush to crown it the energy of the future we failed to recognize the downsides. Sure there are alternatives, but let’s face it. There isn’t enough lawns, cornfields, or landfills available to produce the amount of ethanolto replace petroleum, even if this nation ran on nothing but E85 Prius’.
We’ve made our bed; now let us lie in it.
Quasi,
The soviets taught the world that governments cannot run economies, or pick winners.
Still, even they didn’t learn.
detroit1701 :
April 11th, 2008 at 9:58 am
I heard this on NPR this morning. I still do not understand a few basic components of the problem. Ever since the introduction of US Farm Bills, with their massive subsidies, third world farmers have complained that world agricultural product prices have been kept artificially low. Some countries even brought suit successfully against the U.S. at the WTO (cotton comes to mind). Now some of these same farmers are complaining that world food prices are too high.
I doubt that the farmers are complaining. They truly like the high prices if they are growing these food staple crops, most notably corn in the Western hemisphere. It’s the larger citizenry that depends on the grain as the basis of their diet that are hurting and understandably complaining about a 200% increase in price.
Well I need to lose weight. Fuel please.
Menno,
Changing World Technologies’ Thermal Depolymerization (TDP) a.k.a. Thermal Conversion Plant is hardly without its problems. First they said: “We’ve done so much testing in Philadelphia, we already know the costs,” he says. “This is our first-out plant, and we estimate we’ll make oil at $15 a barrel. In three to five years, we’ll drop that to $10, the same as a medium-size oil exploration and production company. And it will get cheaper from there.”
Then reality came to the podium: Final cost, as of January 2005, was $80/barrel ($1.90/gal). Still, at today’s prices, and not forgetting the $42/barrel courtesy of you tax payers, this is like printing money, right? So where are all the other TDP plants?
They also convert lipids (a.k.a. fats and oils) into renewable diesel (i.e. alkanes not methyl esters = biodiesel). Garbage? No. Cellulose? Nyet! Protein? Partially. Don’t take my word for it, here you have their own Chief Technical Officer.
The underlying problem I have with these guys is that they do not seem to be able to understand their own process very well. So I won’t be holding my breath.
In principle you are right, though. Waste -> Fuel is the way to go. Let’s hope CHOREN or Range Fuels get it right…
Is this really true?
Is biofuel really evil?
Even though corn ethanol doesn’t gain you much energy, sugarcane ethanol and biodiesel work quite nicely. Second generation biofuel also holds promise.
Is it to blame for all the agricultural inflation?
Consider this:
1. Demand stimulates supply.
2. Prices were too low to begin with.
3. Farmers still get subsidies because prices are too low.
4. Lots of land is not cultivated and farmers get paid not to use it.
5. Around the world there is lots of farm land that is cultivated with low productivity.
6. Biofuel production is still small compared to other agricultural production.
I suspect many other factors play a role:
How about:
1. food prices are rising, but so are the prices of oil, steel, coal, natural gas, copper, fertilizer, machinery and just about every other commodity. All those prices feed into food prices.
2. Declining dollar, so expressed in, say, Euros corn prices are rising much less.
3. China imports more food
4. Speculation in futures markets
The biggest problem I see with biofuel is protection of the environment. Rainforests need to be protected. Increased production needs to come from existing farm land, not from chopping down the remaining forest. Not that rainforest was protected very well to begin with. It’s just disappearing faster.
We’re so spoiled by cheap energy (only part of humanity for some 100 years) that we’re ready to literally starve the less fortunate of our species so we can sit one fat ass in a 5000 pound Flex Fuel stupid utility vehicle to drive 3 blocks and buy a 6-pack.
Boy that sums it up, doesn’t it?
I suggest everyone driving a whompin’ big pickup with no use for hauling fill the bed with dirt and grow corn for fuel.
John
The misinformation abounding about Ethanol is frustrating at best. It does little more than feed the ‘fear mongering’ that makes flashy news stories, without giving real information.
Ethanol is produced from corn, yes, but it is produced by fermenting the part of corn that is least useful to everyone. Protein and oil are first extracted – because neither ferments well – and used in both people and animal food-products. What is left is the corn starch. The sugars, carbohydrates, call them what you will. This is what is then fermented to create Ethanol.
This byproduct of animal feed and corn processing for human consumption used to be discarded as waste or added to feeds as ‘filler’. Just like with humans, feeding your meat-animals too many carbs results in ‘fat’ animals. As today’s health-conscious consumer looks to choose lean meats when shopping, farmers have continually looked for more efficient ways to feed their livestock and produce the desired result.
Ethanol from corn is simply getting one more very useful product from corn that was going to be produced, anyway. Yes, it has improved corn prices for the farmer, and therefore more farmers are growing more acres of corn, but it is NOT a case of ‘food or fuel’, but food AND fuel.
A win-win for everyone, in my opinion, if the fear-mongers would stop distorting the facts.
And no, I do not farm nor am I in any way invested in Ethanol production except as a consumer who wants what everyone else wants – alternative, inexpensive energy. I’m merely a thinking person who likes to research and read the facts any time the general media tries to frighten the public with broad generalizations and minimal facts.
Is most of the corn going for ethanol or for biodiesel? I think it may be the latter, and we are selling the vast majority of what we produce to Europe. I heard a story, also on NPR, that the Europeans were considering filing an unfair trade complaint against the U.S. because we subsidize corn farmers with taxpayer money, and undercut them on biodiesel.
IF that is true, then Americans are paying twice: Higher food costs, plus tax subsidies for rich farmers to export their corn as biodiesel.
One more problem with bio-fuels: They require more land under cultivation. That means more deforestation, less habitat, more erosion, water consumption, more use of petroleum-based fertilizers.
So, I have changed my mind. I used to argue for ethanol and biodiesel. Now I think it is a very bad idea. Until we can develop better alternative sources of energy, I like conservation better.
Corn is used for Ethanol, Soybeans are used for Biodiesel. I do not personally think the government should subsidize ANY product, ever. I think market forces should drive prices and leave it at that.
Right now in my state, the federal government is paying for thousands of acres of farm land to lie fallow. They call this ‘set aside’ and people receive significant checks. (My in-laws, who are retired farmers, quit cash-renting their crop land because they could get more money from the government to let the land sit, unused!)
There is *plenty* of land in the ‘grain belt’ of the midwest that is sitting idle in this fashion. Our taxpayer dollars are going to PAY people NOT to farm land that is zoned as agriculture/farmland.
Again, I do not believe this is the ONLY answer to our energy crunch, but I do think it ought to be considered one part of the solution. To call it ‘food or fuel’ is blatantly misleading. To believe it is somehow “costing” more than “normal” farming is completely incorrect. To claim that it might be encouraging ‘deforestation’ or other habitat destruction might be true in other countries, but it is not remotely accurate here in the U.S. Even with the tremendous conservation programs and water-shed protection lands, etc., that my state uses extensively to protect the environment, there are still hundreds of thousands of designated farm-acres that are not being farmed.
THAT is wasteful, IMO.
It is very, very difficult to discuss energy solutions if people are going to use emotional arguments and ‘feelings’ rather than facts and logic.
This is NOT an either-or situation, for corn ethanol OR soy biodiesel. In both cases, the part of the grain used for the production of fuel still allows for food usage as well.
The grain is being grown, anyway. Getting more use out of each bushel means we have gained efficiency of the product.
Conservation alone is not the answer. We will only “conserve” ourselves into poverty. Energy fuels our economy, our lifestyles and our very freedom. We need cleaner, cheaper, more plentiful supplies of more readily available fuels, not stifling of people’s lives.
http://www.guardian.co.uk/environment/2008/apr/14/windpower.energy
We need real answers to our energy needs, not converting food to fuel.
Are people really this stubborn, ignorant and/or blind?
If it were truly a question of “food OR fuel”, I would completely agree with you. But the fact is that it is possible with biofuels from grain to get food AND fuel.
The protein and oil from the corn grain, and the protein and starches from the soybean, are absolutely usable for animal feed that the farmers would grow, mill and use, ANYWAY.
Yes, there is less ‘corn syrup’ produced, because the sugar is what ferments to make ethanol. Yes, there is less ‘soy oil’ produced, because the oil of the bean is what is used to make biodiesel. But there is still considerable food-supply – USEFUL, beneficial, healthful food-products remaining from the grain.
I agree that we should look at all our clean and renewable options, absolutely! But this constant misinformation and demonizing of one source over another is not helping anyone.
It is NOT “Food OR Fuel”, but “Food AND Fuel”.
Until this anti-biofuel argument can be made from a standpoint of a solid grasp of the facts, it will not be taken very seriously by those of us capable of reading and finding the facts for ourselves.
Wake up and stop letting government, special interest groups, and excitement-seeking journalists manipulate your emotions. Engage your intellect, please!
subtlesimmer:
Good point, I realize creating corn ethanol comes directly from the sugars. And if ethanol is made efficiently from a low-value byproduct, then it definitely makes sense. If I were running a corn processing plant, I’d like to find uses for every product to make it more profitable.
However, my fear is that subsidies are distorting demand. Are the right types of corn being planted to match demand? Is more corn being processed than necessary? Are the corn gluten meal products being used efficiently? Demand of one product of the system has effects that ripple back. Gasoline started as a “waste product” of kerosene production, now it’s a main driver of the price of oil.
I also don’t have much of an issue with ethanol itself as a fuel. But when the government does things like mandating that a certain percentage of our fuel must be ethanol, it makes me nervous.
kph:
Good points to you as well. I severely disagree with gov’t subsidizing just about anything and everything for a myriad of reasons including those you bring up, here.
I think if Uncle Sam weren’t so dang bogged down with every special-interest group under the sun, the free market would have taken care of many of these issues long ago.
You certainly won’t here me claim that bio-fuels are the cure-all to what ails us, by any means. I just don’t like to see any argument misrepresented in order to manipulate the emotional reaction of an audience, while failing to present the facts.
This particular bit of so-called “journalism” representing the situation as something so “dire” as “Food or Fuel, Choose One” just pressed every hot-button I possess.
But then, I’ve been raised in a state that is primarily agriculturally based, even though none of my immediate family are farmers. Still, my dad has often said we should tell the Middle Eastern countries, “We’ll burn our grain, you eat your oil” and do just that and stop importing. So I certainly have my own biases.