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Despite intense debate surrounding the growing global food crises, the European Union today defended expanding the use of biofuels in all 27 member countries. Part of the EU’s climate change package, the current proposal sets a target of meeting 10% of transportation fuel with biofuels by 2020.
As I reported last week, Europe’s EPA advised suspending the EU’s biofuel targets until a comprehensive environmental analysis could be completed. Barbara Helfferich, spokeswoman for EU Environment Commissioner Stavros Dimas, said no way is that going to happen:
“You can’t change a political objective without risking a debate on all the other objectives,” meaning that changing biofuels targets could lead to questioning the entire climate change package.
Adding to the ongoing discussion about biofuels affecting worldwide food prices (see Biodiesel Is Raising Food Prices), NPR’s Morning Addition briefly interviewed World Bank President Robert Zoellick last Friday.
Zoellick called it a “perfect storm of things coming together…” and listed 7 different issues contributing to the increasing cost of food, which led to rioting in Haiti and Egypt last week, along with a general strike in Burkina Faso:
By Ranjit Arab •
March 27, 2008
Who knew Stephen King was a prophet?
No, I’m not talking about the demon-possessed hot rods (I think we all saw that coming). I’m talking about America’s zombie-like loyalty to a certain cash crop — one that has turned our entire nation into the children of the corn.
Lately, of course, you can’t watch, read, or listen to the news without someone touting the benefits of corn ethanol and how it’s the key to leading us on a path of energy independence.
There might be a *cough* kernel of truth to that argument, but… (sorry, I suffer from a cousin of Tourette’s that requires me to uncontrollably shout out useless puns)…
Seriously, corn is not the answer. It’s not even a major part of the answer. In fact, it’s a major part of the problem.
What do I mean? Well, lend me your *cough* ear (jeez, the medication is wearing off quicker)…
By Adam Bowman •
March 27, 2008
As I start to stockpile bourbon (it’s made from at least 50% corn) as an investment strategy, I wonder why we are doing this to ourselves.
You practically can’t read a newspaper or news magazine without someone condemning the use of corn as an alternative fuel source these days. And who wouldn’t. The ethanol boom has driven the price of corn up, which in turn makes everything that uses corn go up in price. Corn is in a lot of products.
Why are we investing so much in corn-based fuel?
I think the answer is fear. Fear of rising oil prices. Fear of global warming. Fear of our dependency on foreign oil.
The ethanol industry isn’t the only group up in arms about pervasive negative reporting on biofuels (see yesterday’s post: Ethanol Industry: Jobs Are Better Than Food?).
Two soybean growers’ groups have suspended $1.5 million in funding from the University of Minnesota, due to research showing that biofuels could worsen global warming:
The study, by University of Minnesota ecologist David Tilman and others, said that dedicating huge amounts of land to grow corn, soybeans, sugarcane and other food crops for fuel could drastically change the landscape and worsen global warming. Farmers in the U.S., Brazil, Indonesia and other countries will need to clear forests, grasslands and peat lands on a massive scale to grow more of those crops, according to the research, unleashing far more carbon dioxide from natural vegetation than is saved by the lower emissions of the biofuels.
Is anyone really surprised about this finding? Suspension of the funds appears to be only temporary, until the groups have a chance to meet with the Dean of agricultural science. Jim Palmer, the executive director of the two soybean groups, summed up the situation: “The university hurt the farmers’ feelings, OK? That’s probably the best way to say it.”
The ethanol industry seems to be on the warpath against bad press (maybe that’s just my impression), which it’s been continuously mired in over increasing food prices, changing land-use patterns, and the questionable environmental benefits of grain-based fuel. As I mentioned last week (Ethanol Industry Pays Off Subsidies, Boosts U.S. Economy), business is booming, and this has potentially emboldened or intensified the pro-ethanol lobby.
Bob Dinneen, head of the Renewable Fuels Association, had this to say at this year’s National Ethanol Conference (via Autopia):
He calls the food-vs-fuel debate a “fallacy” that assumes “farmers are incapable of supplying the growing needs for food, fiber and fuel.” Besides, he said, biorefiners only need the starch in feedstocks; the protein provided 14 million metric tons of livestock feed last year.
An economic analysis released February 25th shows major gains for the U.S. job market and GDP from 2007’s ethanol industry boom (emphasis added):
The analysis, conducted by John Urbanchuk of LECG, LLC, determined that the increase in economic activity resulting from ongoing production and construction of new capacity supported the creation of 238,541 jobs in all sectors of the economy during 2007. These include more than 46,000 jobs in the U.S. manufacturing sector. The goods and services required to produce the estimated 6.5 billion gallons in 2007 added $47.6 billion to the Gross Domestic Product and raised household incomes by $12.3 billion.
While the gains themselves aren’t all that surprising, they may turn the conventional wisdom that “ethanol subsidies are bad” on its head since increased tax revenue actually paid them off:
By Victoria Everman •
February 21, 2008
Pop corn, corn on the cob, creamed corn, corn chips, corn flakes … and yarn?
Admittedly, when I think of the hearty, diverse vegetable we know as corn (maize to the Native Americans who received the seeds from tribes in what is now Mexico), I don’t usually think of making sweaters and purses.
Alabama-based Kollage Yarns is looking to change that food-focused perception with not one, but two 100% corn yarns.
The first of their two corn-based yarns is called Corntastic (my kinda word!)
By Max Lindberg •
January 5, 2008
BMO Financial Group strategist Donald Coxe warns that the current credit crunch and soaring oil prices will pale in comparison to a looming shortage of food.
Again, I’ve included a podcast, just in case you’d rather listen:
Investors are being warned, a global food catastrophe is emerging, a dire prediction he dropped on the Empire Club’s 14th annual investment outlook meeting in Toronto.
Coxe blames heavy demand from the biofuels industry, and the growing middle classes of countries such as India and China. To keep up with the demand, he says food output needs to be expanded dramatically.
Congress and the president have spoken: ethanol is America’s new renewable fuel.
Yesterday, President Bush signed into law energy bill H.R.6, which establishes a new renewable fuel standard in the United States (see Max’s earlier post). But not everyone is applauding Capitol Hill. James B. Meigs, editor-in-chief of Popular Mechanics, has railed against ethanol in an op-ed to be published in the magazine’s February 2008 issue. As Meigs points out, Washington is looking for quick fixes, not long-term solutions:
It’s great that our politicians have discovered the need for new energy technologies. But it appears that Washington is determined to put its money—our money—on the wrong horse. Right now, researchers are studying a host of energy solutions, including hydrogen, high-mileage diesel, plug-in hybrids, radical reductions in vehicle weight and cellulosic ethanol (made from cornstalks, switchgrass or other nonfood crops). It is far too soon to say which of these holds the most promise. But, instead of promoting experimentation and competition to find the best solutions, politicians seem ready to declare ethanol the winner. As a result, our nation could wind up with the worst of both worlds: an “alternative” energy that is enormously expensive yet barely saves a gallon of oil.
It looks like ethanol subsidies may impede efforts to reduce the size of the Dead Zone in the Gulf of Mexico. A draft report from the EPA Science Advisory Board says that ethanol subsidies could lead to a dramatic increase in nutrient loading in the Mississippi river basin, due to diverting cropland to corn production.
Recent energy policies, combined with pre-existing crop subsidies, tax policies, global market conditions and trade barriers all provide economic
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