I know what you're thinking: he grabbed the New York Times' columnist's most ridiculous assertion and repeated it out of context. If so, you need to read "Bring on the Right Biofuels," 'cause this Roger Cohen guy is the MR. Context Manipulation. After listing the charges against bio-fuels, Cohen says "hogwash and bilge"– and then admits he was somewhat wrong about ethanol's critics being somewhat wrong. "I’ll grant that the fashion for bio-fuels led to excess, and that some farm-to-fuel-plant conversion, particularly in subsidized U.S. and European markets, makes no economic or environmental sense. But bio-fuels remain very much part of the solution. It just depends which bio-fuels." So, on to [theoretical] production of ethanol from switchgrass, wood chips and garbage, right? Wrong. Cohen is too busy pinning the blame for rising food prices on oil prices and rising standards of living in third world developing nations. "They’re eating twice a day, instead of once, and propelling rapid urbanization. Their demand for food staples and once unthinkable luxuries like meat is pushing up prices." Perhaps. Anyway, what's to be done about ethanol? Remove the tariff against Brazilian ethanol! And? And that's it.
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You know the world’s gone crazy when it costs $120/week to fill up the Navigator because some third world kid thinks he has the right to eat twice a day.
Eating twice a day?
Those bastards! Even flex-fuel Suburbans only need to be filled up once a day!
Sumbitch! Let them eat cake!
A sensible, no nonsense article. No hystrionics that ethanol will destroy humanity in 30 days.
He is exactly right on several counts.
1) Ethanol is not a panacea to our oil problem, but it is a part of the solution.
2) The tiny $40 billion a year ethanol industry is not responsible for the shortages of food all over the globe. That is simply a laughable argument that has been perpetuated here and elsewhere.
3) Eliminating the tarriff on Brazilian ethanol is a quick and easy way to ease the pressure on U.S. farmland and get more ethanol on the market.
4) It has become fashionable to bash ethanol, and this fashion has little if anything to do with reality.
I will add that the U.S. Ethanol industry has just began Phase 1 of full production. The 1970’s was development and pre-production, only now a full production industry. Phase 2 and will see an improvement in efficiency in the existing infrastructure as well as the development of new feedstock technologies. Phase 3 will see those new feedstocks go into full production.
Point being, the yields will only go up from here, the amount of corn required to feed the industry will soon peak.
Does this gentleman have any Congressional aspirations? He’d fit right in.
Alex,
How do you explain the rise in the prices of other crops (besides corn) because the US farmers are planting more corn to rake in more money from ethanol production? Supply and demand dictates that since there is less soy beans and other crops due to increased production of corn that the prices of said crops increases – and it has.
The price of commidities has more to do with the same problem that is affecting the commidity of oil: You have traders and speculators treating commodities as an investment, as a hedge against the falling dollar.
Speculation and investment is artifically driving the price of most commidities right now, it has little to do with supply and demand.
If I were running for office, I would propose changes to the commodities markets, so that if you buy commodities you must be required to take delivery of them. 50% of the trading going on in oil and corn is guys eating cheetos in their underwear at their laptops trying to make a buck.
Alex Rodriguez: 3) Eliminating the tarriff on Brazilian ethanol is a quick and easy way to ease the pressure on U.S. farmland and get more ethanol on the market.
VERY BAD IDEA! Then the US demand for ethanol will cause deforestation in the Amazon, which will greatly add to global climate disruption because so much carbon is sequesetered in those forests, and because as the forests are raised for farms, the region becomes less wet, resulting in a lot of fires, creating a vicious circle of more deforestation.
One Brazilian rancher told Time Mag writer Michael Grunwald that–in Grunwald’s paraphrasing–“the rate of deforestation closely tracks commodity prices on the Chicago Board of Trade.
“3) Eliminating the tarriff on Brazilian ethanol is a quick and easy way to ease the pressure on U.S. farmland and get more ethanol on the market.”
Brazil easily uses 100% of their ethanol production. What point is there in producing ethanol there and shipping it over here when there is no surplus of ethanol over there? It’s not like we need to burn ethanol instead of gasoline. Ooops… nevermind, we have stupid government mandates. But, those mandates are pork-barrel spending for the farmers here, so importing would defeat the porkiness and thus remove the only real purpose of the ethanol mandates.
A-Rod
And what are cheetos made of? Crops. Well, a bunch of garbage and some kind of crops of some sort. Maybe if these day traders stopped buying so many Cheetohs, my Nagrivator would be cheaper to fill up.
David, the article also debunks the myth that Brazilian ethanol is destroying the rain forest.
I’ve never believed this myth, this article only reiterates my skepticism.
Sounds like a South Park episode to me’ starring, of course, Starvin’ Marvin and his parents, Mr. and Mrs. Click-click-dirk…
The plot: Al Gore proposes new, global laws limiting people in third-world countries to one meal per day. When Starvin’ Marvin and his family violate this law, they are arrested and put on trial where Al Gore demands the witnesses address their answers to his Nobel “Peace” Prize.
Alex Rodriguez: Almost all viable cane-growing areas lie hundreds of miles from the rain forest. Brazil has enough savannah to multiply its 3.5 million hectares of cane-for-ethanol production by ten without going near the Amazon ecosystem. So you’re accepting that at face value? Me, I’m willing to consider the possibility that Mr. Cohen has discovered an inconvenient (for rain forest defenders) truth, but I’d still like a little something called attribution. And just because Brazil has these 3.5m hectares of savanna for cane production doesn’t mean they’ll use them.
Those unlucky people in the Third World should just eat each other instead. It’s like hitting two birds with one stone.
No, A-rod, He is exactly wrong on several counts:
1) Ethanol is not a panacea to our oil problem, but it is a part of the solution.
Unless you meant the part that needs to go into the trashcan, you are mistaken. Ethanol causes several problems when mixed with gasoline (as we would do for the foreseeable future), including (but not limited to) its tendency to absorb water (causing a host of corrosion issues and the need to replace pipelines and storage tanks), the increase of vapor pressure (increasing air pollution and evaporative loss) and its lower energy content (your mileage will be lower).
2) The tiny $40 billion a year ethanol industry is not responsible for the shortages of food all over the globe. That is simply a laughable argument that has been perpetuated here and elsewhere.
When a full 30% of the US corn crop goes to ethanol, it is no longer tiny. Nor laughable.
3) Eliminating the tarriff on Brazilian ethanol is a quick and easy way to ease the pressure on U.S. farmland and get more ethanol on the market.
So why are all the ethanol producers against it? Could it be that they are more interested in federal handouts, than getting more ethanol to market?
4) It has become fashionable to bash ethanol, and this fashion has little if anything to do with reality.
On what planet would that be? Which alternative reality are you referring to?
Point being, the yields will only go up from here, the amount of corn required to feed the industry will soon peak.
We have been making ethanol via fermentation since Noah got out of the ark. You don’t think in those 5,000 years people have worked on increasing yields? The stupid idea to use ethanol as fuel is new, as is the even dumber idea to convert food into fuel. But the technology is a bit older than most mountains. Yields are going nowhere.
Speculation and investment is artifically driving the price of most commidities right now, it has little to do with supply and demand.
There is a reason the speculators are making so much money right now: the underlying nervousness in the markets. But you have cause and effect confused here: the nervousness is a result of supply-and-demand issues, including some people’s ability to afford more food (for a while, anyhow).
The speculators are just taking advantage of the realities, not creating it. Otherwise the bubble would deflate pretty quickly.
“They’re eating twice a day, instead of once, and propelling rapid urbanization. Their demand for food staples and once unthinkable luxuries like meat is pushing up prices.”
Yes, how dare they raise their standard of living! How dare they not go hungry so we can pour their precious corn/sugar/whatever into our gas tanks! I can’t believe that actual people in an actual modern society really think this way.
The ethanol problem is as follows:
* The world burns a crap-ton of fuel every day.
* In order to replace all of that fuel with ethanol, we need to grow more corn/sugar/switchgrass/whatever.
* Because the demand for fuel is so high, farmers can get more money for crops as fuel than they can for crops as food. High demand = high prices. I’m ignoring government subsidies for now, because even without those we would see this problem.
* Food-wise, we are now fighting over what is left over. Supply is low, demand is high. Result: high food-crop prices.
* So use switchgrass instead, then? It has to grow somewhere. Even though it can grow on non-farm land, if there is a demand for ethanol, do you really think that some farmers are not going to abandon growing food in favor of a cash-crop? Think cotton and tobacco, and you’re on the right track. Less food production = higher food prices.
* On that same note, do you believe for a minute that a dirt-poor farmer in the Amazon will think for one second about clearing some of that useless forest so he can plant biofuel crops on it and maybe make a decent living?
* So corn prices are now high? Well, just eat something else! Which, of course, drives up the demand for wheat, oats, rice, etc. Result: higher prices of other crops. We have already started to see this.
Ethanol is just bad policy, and mandating it makes it even worse. Subsidies to farmers for ethanol crops just make a bad problem worse, since the mandate would drive ethanol crop production all by itself.
The speculators are just taking advantage of the realities, not creating it. Otherwise the bubble would deflate pretty quickly.
You are correct, the speculators are just taking advantage of the system we have in place.
Make it to where you have to take delivery of the oil or corn you purchased, and the money dries up, and we go back to supply and demand.
That is the reason for 90% of the price problems we have in oil and other commodities, not the 30% usage of a corn crop, the crop being 30% larger than typical, which is a wash.
He might very well be right. If enough poor people have become slightly less poor to afford more food, demand for food would increase, assuming no corresponding increase in supply, then the price for food would go up to compensate. Of course, increased use of biofuels also increases demand as well.
Growing demand for meat–it takes nearly 10 calories of grain to make a calorie of beef–certainly is contributing to the demand for food, as is the growing population, but so is the demadn for ethanol.
Regarding that Brazilian Cerrado, the savannah that A-rod refers to,that holds a hell of a lot of carbon. It would take literally hundreds of years growing ethanol on that land to repay the carbon debt from plowing up that land, and by that time, we’ll all be cooked.
Alex,
I don’t mind people using ethanol if they choose to. If it comes in at a price that’s favorable compared to gasoline, then they have the right to use it. I’m also not disputing that speculation and energy prices are pushing food prices up.
However, the problem is that when the ethanol industry gets too big, it can be harmful to the rest of the market. I believe we’re at that point already.
Look at it another way: corn ethanol producers have an advantage over other buyers of corn because their production is subsidized, their product is subsidized while competitors’ are taxed, and demand for their product is driven up by federal mandates.
Other businesses, who don’t have the same benefits, have to bid against them. The fact that a significant portion (I thought 20%, but Engineer is coming up with 30% – either way, it’s big) of the crop is going to ethanol production means that they are now major buyers in the market.
So yes, ethanol is good in the sense that it’s fuel we can produce here. It just comes at a price that’s much bigger than the cost of ethanol itself.
The ways we will make biofuels (ie: wood chips, pond scum and orange peels) will get better. The ways we make gasoline (ie: tar sands) will get worse. Nuff said. I’ll take the Elise concept with the ethanol happy engine pls and a deisel G-wagon to tow it to the track.
Not only are they eating twice a day, they actually want to eat MEAT once in a while! Which net consumes a much greater quantity grains than just eating grains directly. Those bastards! What right do they have to eat as well as my dog does?
If I were running for office, I would propose changes to the commodities markets, so that if you buy commodities you must be required to take delivery of them.
This would be a great plan if your goal is to destroy the agricultural system.
The whole point of a commodities exchange is to provide producers with a hedge. They are able to hedge by getting the money of non-producers to purchase their products in advance at a given price, which supports the market.
If the commodities market were limited as you suggest, production would decline rapidly because of the inability of producers to hedge their risks. The hazards of production would be so great that many of them would stop producing altogether or reduce their production quantities. Which means less food and more volatile prices for whatever is left. That’s a far worse circumstance than anything that is happening at the moment.
@David Holzman
“It would take literally hundreds of years growing ethanol on that land to repay the carbon debt from plowing up that land, and by that time, we’ll all be cooked.”
As the greenhouse gas emissions have hugely increased in the last decade the Earth has seen a slight cooling. How can this be explained?
This would be a great plan if your goal is to destroy the agricultural system
What about restricting my proposal to the oil market. The hedging requirements of Oil producers is minimal.
Something needs to change in the commidities market, either take delivery or increase the margin required to purchase “shares”. Right now, the market is being played like a violin by the speculators and the day traders, there is all kinds of false demand being created by playing this month’s contract against next month’s contract to force the price to go up.
It is a mess.
Right now, the market is being played like a violin by the speculators and the day traders, there is all kinds of false demand being created by playing this month’s contract against next month’s contract to force the price to go up.
Speculators are symptomatic of the underlying problem, which is instability and uncertainty in respect to the US economy and the dollar.
All of that ultimately leads back to the Iraq war. Speculators are able to bet on volatility precisely because the markets are nervous about US prospects due to the cost of the war and the quagmire that the US finds itself in.
If you want lower, more stable commodity prices and a stronger dollar, end the war as soon as possible. Commodity prices were climbing and the dollar was falling during the Vietnam war, too, and ending that war allowed the US to move forward and get past those issues.
Trying to eliminate speculation by fiat would be akin to trying to fix a gambling problem by outlawing dice. Speculators aren’t speculating because there is a commodities market, but because there are news events that spur volatility, which creates opportunity for profit. Reducing the uncertainty will do away with most of that.
@brownie:
My thoughts exactly. You see this train of thought over and over from “progressives”, who somehow can’t stand to see anyone make any progress. And they call the rest of us cruel and unfeeling.
This rise in food prices simply means the end of humanity’s wonton wastefulness. Its time we think about conservatio and the most logical way to usher in this era of conservation is to create a new global food tax. This way people will naturally limit their intake of food based on what they can afford and we can better prepare for the future.
The funny thing for me is that I’m sure Mr. Cohen considers himself a voice for the poor and downtrodden as well.
kph:
I agree, I don’t mind people using ethanol either. I just used some earlier tonight with dinner.
guyincognito:
I really, really hope that your post was sarcastic.