When VeraSun Energy inaugurated a new ethanol processing plant last summer in Charles City, Iowa, some of that industry’s most prominent boosters showed up. Leaders of the National Corn Growers Association and the Renewable Fuels Association, for instance, came to help cut the ribbon — and so did Senator Barack Obama.
Monday, June 23, 2008
Obama links to Ethanol
Not enough land to grow ethanol for fuel
Cato Feb 26, 2007
Ethanol will not lead to energy independence. If all the corn produced in America in 2005 were dedicated to ethanol production (and only 14.3 percent of it was), U.S. gasoline consumption would have dropped by only 12 percent. For corn ethanol to completely displace gasoline in this country, we would need to appropriate all U.S. cropland, turn it over to ethanol production, and then find 20 percent more land on top of that.
The U.S. Energy Information Administration believes the practical limit for domestic ethanol production is about 700,000 barrels per day -- in 2030.
Ethanol will not lead to energy independence. If all the corn produced in America in 2005 were dedicated to ethanol production (and only 14.3 percent of it was), U.S. gasoline consumption would have dropped by only 12 percent. For corn ethanol to completely displace gasoline in this country, we would need to appropriate all U.S. cropland, turn it over to ethanol production, and then find 20 percent more land on top of that.
The U.S. Energy Information Administration believes the practical limit for domestic ethanol production is about 700,000 barrels per day -- in 2030.
Sunday, June 15, 2008
Nestle Chairman: Biofuels are "ethically indefensible"
Nestle Chairman: Biofuels are "ethically indefensible"
Wall Street Journal June 13, 2008
http://online.wsj.com/article/SB121336637192571721.html
Excerpts include:
The biofuel craze, egged on by global warming activists, has helped fuel a huge agricultural crisis.
If there's one certainty, it is this: The production of biofuels has stimulated a massive, and destructive, reorientation of the world's agriculture markets. The U.S. Department of Energy calculates that every 10,000 liters of water produces as little as five liters of ethanol, or one to two liters of biodiesel. Biofuels are economical nonsense, ecologically useless and ethically indefensible.
The world's agriculture and water crisis is only going to get worse. As China and India grow, their populations are demanding more and wider varieties of food stuffs, and competition for arable land is intensifying. Food prices are rising, in large part because agriculture suppliers can barely keep up with today's demand
So what is the world doing? Reorienting land away from food production and toward plants cultivated for energy needs. This could be the single most destructive set of policy mistakes made in a generation. From time immemorial, mankind has struggled to produce enough food.
So why introduce a new competitor for this scarce resource? The blame falls squarely on global warming advocates.
Wall Street Journal June 13, 2008
http://online.wsj.com/article/SB121336637192571721.html
Excerpts include:
The biofuel craze, egged on by global warming activists, has helped fuel a huge agricultural crisis.
If there's one certainty, it is this: The production of biofuels has stimulated a massive, and destructive, reorientation of the world's agriculture markets. The U.S. Department of Energy calculates that every 10,000 liters of water produces as little as five liters of ethanol, or one to two liters of biodiesel. Biofuels are economical nonsense, ecologically useless and ethically indefensible.
The world's agriculture and water crisis is only going to get worse. As China and India grow, their populations are demanding more and wider varieties of food stuffs, and competition for arable land is intensifying. Food prices are rising, in large part because agriculture suppliers can barely keep up with today's demand
So what is the world doing? Reorienting land away from food production and toward plants cultivated for energy needs. This could be the single most destructive set of policy mistakes made in a generation. From time immemorial, mankind has struggled to produce enough food.
So why introduce a new competitor for this scarce resource? The blame falls squarely on global warming advocates.
Crop Production Data - Wheat
Interesting data from USDA
http://www.ers.usda.gov/briefing/Baseline/crops.htm
I find the USDA wheat projections confusing. They indicate increased output ("Projected 2008 production, at 2,432 million bushels, is up 365 million bushels from 2007"), but the details for June 12 state:
http://usda.mannlib.cornell.edu/usda/current/WHS/WHS-06-12-2008.pdf
The National Agricultural Statistics Service’s (NASS) Crop Production reported that
winter wheat heading progress as of June 1 was behind normal due primarily to below normal
temperatures throughout the spring growing season.
NASS Crop Progress reported that as of June 8, 98 percent of the spring wheat had
emerged, slightly better than the 5-year average. Sixty-three percent of the spring wheat
crop was rated good to excellent and only 4 percent reported as poor to very poor. A year
ago at this date, 81 percent of the spring wheat crop was rated good to excellent and 5
percent poor to very poor.
They also note:
In Canada a cold spring delayed planting and dryness persisted in some areas,
trimming yield prospects.
Argentina’s 2008/09
production prospects were reduced 0.5 million tons to 14.5 million tons due to dry
conditions during planting.
http://www.ers.usda.gov/briefing/Baseline/crops.htm
I find the USDA wheat projections confusing. They indicate increased output ("Projected 2008 production, at 2,432 million bushels, is up 365 million bushels from 2007"), but the details for June 12 state:
http://usda.mannlib.cornell.edu/usda/current/WHS/WHS-06-12-2008.pdf
The National Agricultural Statistics Service’s (NASS) Crop Production reported that
winter wheat heading progress as of June 1 was behind normal due primarily to below normal
temperatures throughout the spring growing season.
NASS Crop Progress reported that as of June 8, 98 percent of the spring wheat had
emerged, slightly better than the 5-year average. Sixty-three percent of the spring wheat
crop was rated good to excellent and only 4 percent reported as poor to very poor. A year
ago at this date, 81 percent of the spring wheat crop was rated good to excellent and 5
percent poor to very poor.
They also note:
In Canada a cold spring delayed planting and dryness persisted in some areas,
trimming yield prospects.
Argentina’s 2008/09
production prospects were reduced 0.5 million tons to 14.5 million tons due to dry
conditions during planting.
Wednesday, May 21, 2008
Ethanol Fuel From Corn Faulted As "Unsustainable Subsidized Food Burning"
We had some insights years back
Science Daily 2001
"Abusing our precious croplands to grow corn for an energy-inefficient process that yields low-grade automobile fuel amounts to unsustainable, subsidized food burning," says the Cornell professor in the College of Agriculture and Life Sciences. Pimentel, who chaired a U.S. Department of Energy panel that investigated the energetics, economics and environmental aspects of ethanol production several years ago, subsequently conducted a detailed analysis of the corn-to-car fuel process. His findings will be published in September, 2001 in the forthcoming Encyclopedia of Physical Sciences and Technology .
o An acre of U.S. corn yields about 7,110 pounds of corn for processing into 328 gallons of ethanol. But planting, growing and harvesting that much corn requires about 140 gallons of fossil fuels
o The energy economics get worse at the processing plants, where the grain is crushed and fermented.
o Adding up the energy costs of corn production and its conversion to ethanol, 131,000 BTUs are needed to make 1 gallon of ethanol. One gallon of ethanol has an energy value of only 77,000 BTU. "Put another way," Pimentel says, "about 70 percent more energy is required to produce ethanol than the energy that actually is in ethanol. Every time you make 1 gallon of ethanol, there is a net energy loss of 54,000 BTU."
"Corn production in the U.S. erodes soil about 12 times faster than the soil can be reformed, and irrigating corn mines groundwater 25 percent faster than the natural recharge rate of ground water.
Subsidized corn results in higher prices for meat, milk and eggs because about 70 percent of corn grain is fed to livestock and poultry in the United States Increasing ethanol production would further inflate corn prices,
Science Daily 2001
"Abusing our precious croplands to grow corn for an energy-inefficient process that yields low-grade automobile fuel amounts to unsustainable, subsidized food burning," says the Cornell professor in the College of Agriculture and Life Sciences. Pimentel, who chaired a U.S. Department of Energy panel that investigated the energetics, economics and environmental aspects of ethanol production several years ago, subsequently conducted a detailed analysis of the corn-to-car fuel process. His findings will be published in September, 2001 in the forthcoming Encyclopedia of Physical Sciences and Technology .
o An acre of U.S. corn yields about 7,110 pounds of corn for processing into 328 gallons of ethanol. But planting, growing and harvesting that much corn requires about 140 gallons of fossil fuels
o The energy economics get worse at the processing plants, where the grain is crushed and fermented.
o Adding up the energy costs of corn production and its conversion to ethanol, 131,000 BTUs are needed to make 1 gallon of ethanol. One gallon of ethanol has an energy value of only 77,000 BTU. "Put another way," Pimentel says, "about 70 percent more energy is required to produce ethanol than the energy that actually is in ethanol. Every time you make 1 gallon of ethanol, there is a net energy loss of 54,000 BTU."
"Corn production in the U.S. erodes soil about 12 times faster than the soil can be reformed, and irrigating corn mines groundwater 25 percent faster than the natural recharge rate of ground water.
Subsidized corn results in higher prices for meat, milk and eggs because about 70 percent of corn grain is fed to livestock and poultry in the United States Increasing ethanol production would further inflate corn prices,
o The average U.S. automobile, traveling 10,000 miles a year on pure ethanol (not a gasoline-ethanol mix) would need about 852 gallons of the corn-based fuel. This would take 11 acres to grow, based on net ethanol production. This is the same amount of cropland required to feed seven Americans.
o If all the automobiles in the United States were fueled with 100 percent ethanol, a total of about 97 percent of U.S. land area would be needed to grow the corn feedstock. Corn would cover nearly the total land area of the United States.
Energy Balance on Ethanol
Interesting article from Science Daily July 2005
Some excerpts include:
Cornell University and University of California-Berkeley study.
Pimentel, professor of ecology and agriculture at Cornelland Tad W. Patzek, professor of civil and environmental engineering at Berkeley,
Their report is published in Natural Resources Research (Vol. 14:1, 65-76).
"There is just no energy benefit to using plant biomass for liquid fuel," says David Pimentel, . "These strategies are not sustainable."
"The government spends more than $3 billion a year to subsidize ethanol production (little going to farmers) when it does not provide a net energy balance or gain, is not a renewable energy source or an economical fuel. Further, its production and use contribute to air, water and soil pollution and global warming,"
They considered such factors as the energy used in producing the crop (including production of pesticides and fertilizer, running farm machinery and irrigating, grinding and transporting the crop) and in fermenting/distilling the ethanol from the water mix. Although additional costs are incurred, such as federal and state subsidies that are passed on to consumers and the costs associated with environmental pollution or degradation, these figures were not included in the analysis.
Some excerpts include:
Cornell University and University of California-Berkeley study.
Pimentel, professor of ecology and agriculture at Cornelland Tad W. Patzek, professor of civil and environmental engineering at Berkeley,
Their report is published in Natural Resources Research (Vol. 14:1, 65-76).
"There is just no energy benefit to using plant biomass for liquid fuel," says David Pimentel, . "These strategies are not sustainable."
"The government spends more than $3 billion a year to subsidize ethanol production (little going to farmers) when it does not provide a net energy balance or gain, is not a renewable energy source or an economical fuel. Further, its production and use contribute to air, water and soil pollution and global warming,"
They considered such factors as the energy used in producing the crop (including production of pesticides and fertilizer, running farm machinery and irrigating, grinding and transporting the crop) and in fermenting/distilling the ethanol from the water mix. Although additional costs are incurred, such as federal and state subsidies that are passed on to consumers and the costs associated with environmental pollution or degradation, these figures were not included in the analysis.
In terms of energy output compared with energy input for ethanol production, the study found that:
* corn requires 29 percent more fossil energy than the fuel produced;
* switch grass requires 45 percent more fossil energy than the fuel produced; and
* wood biomass requires 57 percent more fossil energy than the fuel produced.
In terms of energy output compared with the energy input for biodiesel production, the study found that:
* soybean plants requires 27 percent more fossil energy than the fuel produced, and
* sunflower plants requires 118 percent more fossil energy than the fuel produced.
Friday, May 16, 2008
IMF - Half of Food Price Increase due to Biofuels
The IMF recently estimated that the shift of crops out of the food supply to produce biofuels accounts for almost half of the recent increases in the global food prices. That has led to calls from anti-poverty groups to rethink government policies to boost biofuel production at a time that the IMF estimates that global food prices rose by 43 percent in the 12 months ending in March.
The US disputes this but states: "ethanol production is a significant contributor to increases in corn prices"
All agree there are additional factors including: increased demand from developing countries, especially China and India, rising energy costs and draughts in some crop producing countries
The US disputes this but states: "ethanol production is a significant contributor to increases in corn prices"
All agree there are additional factors including: increased demand from developing countries, especially China and India, rising energy costs and draughts in some crop producing countries
Farm Price Supports
Montreal Gazette May 14, 2008
The ongoing WTO negotiations-the Doha Round of trade talks is stalled because of the rich countries' unwillingness to reduce their high levels of financial support to their farmers. Across the OECD countries, an average of 31% of farmers' income comes either directly from government coffers or indirectly from policies forcing consumers to pay artificially high prices.
But the bigger problem is the effect on people in developing countries. By encouraging farmers to supply more wheat, barley, sugar, or whatever, the rich-country policies drive down world food prices and make farming in poor countries unprofitable. If we really care about helping the countries in the developing world, we would prove it by eliminating our farm-support policies and thereby driving the Doha trade talks to a successful completion.
The ongoing WTO negotiations-the Doha Round of trade talks is stalled because of the rich countries' unwillingness to reduce their high levels of financial support to their farmers. Across the OECD countries, an average of 31% of farmers' income comes either directly from government coffers or indirectly from policies forcing consumers to pay artificially high prices.
But the bigger problem is the effect on people in developing countries. By encouraging farmers to supply more wheat, barley, sugar, or whatever, the rich-country policies drive down world food prices and make farming in poor countries unprofitable. If we really care about helping the countries in the developing world, we would prove it by eliminating our farm-support policies and thereby driving the Doha trade talks to a successful completion.
Friday, May 9, 2008
Ethanol
The United States is the world's top producer of corn-based ethanol, and the Bush administration sees it as a key way to reduce dependence on foreign oil and curb fossil fuel emissions. Lester Brown, founder of the Earth Policy Institute (EPI) said "the evidence irrefutably demonstrates that this policy is not delivering on either goal." "In fact, it is causing environmental harm and contributing to a growing global food crisis," Brown wrote in a scathing editorial in the Washington Post. EPI says the United States burned 25% of its corn supply as fuel last year, leading to just a 1% reduction in the country's oil consumption.
Some scientists warn that biofuels actually increase greenhouse gas emissions, as farmers convert forest and grassland to new cropland to replace or add to grain diverted to biofuels.
Scores of American farmers eyeing swelling corn prices have abandoned wheat to grow corn, leading to the lowest US wheat ending stocks in 60 years, according to the US Department of Agriculture, and causing a ripple effect of rising commodity prices.
Wednesday, May 7, 2008
Brazil Defends Ethanol
From Cato May 7, 2008
"Brazil, the world's biggest ethanol exporter, is bristling over criticism of its biofuel," reports The Christian Science Monitor. "As wheat, rice, and corn prices rise sharply, critics say producing fuel for cars is taking precedence over food for people. President Luiz Inacio Lula da Silva says the bad publicity is unwarranted and uninformed. Many biofuel experts agree. Critics, they say, fail to distinguish between the different kinds of ethanol. Brazilian ethanol from sugar cane is up to eight times more energy efficient to produce than ethanol derived from corn, beets, wheat, or other temperate crops."
In the Free Trade Bulletin "Food Fight," Sallie James, trade policy analyst, writes:
"Facts on the demand side suggest that the recent price increases are more structural compared to the cyclical, supply-driven booms of the past. Government policies in developed countries that seek to support farmers by creating artificial demand for ethanol are an important culprit. In addition, economic growth in countries such as China, Brazil, and India has created a large and growing middle class that is acquiring western-style eating habits. The Chinese, for example, have almost doubled their consumption of meat from about 44 lbs. per capita in 1980 to 110 lbs. per capita today. That in turn has pushed up demand for feed grains, because one lb. of beef requires about 13 lbs. of grain to produce. Although high prices will encourage entrepreneurs to increase production, and infrastructure investment will help increase yields and correct the current market imbalance, government actions are impeding the efficient allocation of resources that would normally see lower prices."
Laura Osio, editor, losio@cato.org
Live by Gov Subsidy, Die by Gov Subsidy
Never build a business plan to count on a consistent government direction. Politicians are fickle.
Ethanol fuel was a forced government intervention. Thus, it is very subject to changing political winds.
CNN May 5
The GOP senators, citing U.S. Department of Agriculture figures, said up to 30 percent of the U.S. corn crop could be diverted to fuel production this year. One of those who opposed the bill -- and a co-signer of Monday's letter -- said the ethanol mandates are now widely considered a "policy blunder" that Congress should roll back.
Ethanol fuel was a forced government intervention. Thus, it is very subject to changing political winds.
CNN May 5
The GOP senators, citing U.S. Department of Agriculture figures, said up to 30 percent of the U.S. corn crop could be diverted to fuel production this year. One of those who opposed the bill -- and a co-signer of Monday's letter -- said the ethanol mandates are now widely considered a "policy blunder" that Congress should roll back.
John McCain Monday joined other GOP senators urging environmental regulators to ease rules demanding a sharp increase in ethanol use to help head off further increases in food prices. The energy bill that passed Congress with bipartisan support in 2007 requires U.S. fuel marketers to increase the use of biofuels fivefold by 2022. McCain and 23 other Republicans, including many who supported the bill, called on the Environmental Protection Agency to waive or roll back the law's requirements in order to ease pressure on food and livestock feed prices.
Sunday, May 4, 2008
Ethanol Facts List
For those that argue the reason for ethanol is "energy independence" let's look at the extreme of replacing automotive gasoline with E-85
Summary
Replace USA 141 billion gallons of gasoline with E-85 fuel =>170 billion gallons of E-85
146 billion gallons ethanol
26 billion gallons gasoline
Require equivalent of 117 billion gallons of gasoline for production and distribution
440 billion gallons of water for processing
235 quadrillion gallons of water for processing
250 billion pounds of fertilizer
$182 billion in ethanol plant capital
Items
Gasoline usage July 2007 USA gasoline - 388.6 million gallons/day
=141 billion gallons of gasoline/yr
In a study on automobiles on E-85 and gasoline it was found that fuel efficiency was reduced 27 percent with ethanol (Sheehan, et al. 2004).
1.2 gallons of E-85 = 1 gallon regular unleaded gasoline
=170 billion gallons of E85
How much ethanol would be required for 170 billion gallons of E85
146 billion gallons ethanol/yr, growing at about 5 billion gallons/year
and 26 billion gallons of gasoline
Acres of Corn
Corn to ethanol yield about 280 gallon/acre
Corn average 113 bu/acre
2.5 gallon per bu
=280 gallon per acre=520 million acres of corn
This last year corn acreage = 80 million acres
Water usage
452,000 gallons per acre
=235 quadrillion gallons of water
Production requires about 3 gallons water/gallon ethanol
=440 billion gallons water processing
Fertilizer usage - 477 lb/acre => 250 billion lbs
Nitrogen 124 lbs/acre
Potash 53 lbs/acre
Phosphate 58 lbs/acre
Lime 242 lbs/acre
Production efficiency
The best case production of ethanol yields about 25% more energy than is used in growing the corn, harvesting it, and distilling it into ethanol. Others estimate that it takes more energy to create corn ethanol than it provides
Where would we get the energy for fertilizer, to produce the corn and refine/distribute the ethanol? The answer given is coal and natural gas.
To simplify the net energy balance, lets compare in gallons of gasoline. Assuming the best case above 25% energy yield, this would mean 117 billion gallons of gasoline to produce the corn. Add the 26 billion gallons in the E-85, the total is 145 billion gallons
Plant capital costs
Average about $1.25 per gallon/yr capacity
146 billion gallons/yr => $182 billion in capital facilities
Ethanol Distribution
Ethanol and e-85 are more corrosive than gasoline and soaks up water and impurities, they cannot be shipped through the existing gasoline pipeline network, trains, trucks or barges. This is also why vehicles need to be specially built to run on E-85.
Summary
Replace USA 141 billion gallons of gasoline with E-85 fuel =>170 billion gallons of E-85
146 billion gallons ethanol
26 billion gallons gasoline
Require equivalent of 117 billion gallons of gasoline for production and distribution
440 billion gallons of water for processing
235 quadrillion gallons of water for processing
250 billion pounds of fertilizer
$182 billion in ethanol plant capital
Items
Gasoline usage July 2007 USA gasoline - 388.6 million gallons/day
=141 billion gallons of gasoline/yr
In a study on automobiles on E-85 and gasoline it was found that fuel efficiency was reduced 27 percent with ethanol (Sheehan, et al. 2004).
1.2 gallons of E-85 = 1 gallon regular unleaded gasoline
=170 billion gallons of E85
How much ethanol would be required for 170 billion gallons of E85
146 billion gallons ethanol/yr, growing at about 5 billion gallons/year
and 26 billion gallons of gasoline
Acres of Corn
Corn to ethanol yield about 280 gallon/acre
Corn average 113 bu/acre
2.5 gallon per bu
=280 gallon per acre=520 million acres of corn
This last year corn acreage = 80 million acres
Water usage
452,000 gallons per acre
=235 quadrillion gallons of water
Production requires about 3 gallons water/gallon ethanol
=440 billion gallons water processing
Fertilizer usage - 477 lb/acre => 250 billion lbs
Nitrogen 124 lbs/acre
Potash 53 lbs/acre
Phosphate 58 lbs/acre
Lime 242 lbs/acre
Production efficiency
The best case production of ethanol yields about 25% more energy than is used in growing the corn, harvesting it, and distilling it into ethanol. Others estimate that it takes more energy to create corn ethanol than it provides
Where would we get the energy for fertilizer, to produce the corn and refine/distribute the ethanol? The answer given is coal and natural gas.
To simplify the net energy balance, lets compare in gallons of gasoline. Assuming the best case above 25% energy yield, this would mean 117 billion gallons of gasoline to produce the corn. Add the 26 billion gallons in the E-85, the total is 145 billion gallons
Plant capital costs
Average about $1.25 per gallon/yr capacity
146 billion gallons/yr => $182 billion in capital facilities
Ethanol Distribution
Ethanol and e-85 are more corrosive than gasoline and soaks up water and impurities, they cannot be shipped through the existing gasoline pipeline network, trains, trucks or barges. This is also why vehicles need to be specially built to run on E-85.
Cellulosic Ethanol
Indur Goklany states: "If cellulosic ethanol proves to be as profitable as its backers hope, farmers will divert even more land and water to producing the cellulose instead of food. All this means we'll be more or less back to where we were. Food will once again be competing with fuel. And land and water will be diverted from the rest of nature to meet the human demand for fuel.
Reduce other crops for Corn
From Cato
"Primarily derived from corn in the United States, ethanol affects the price of corn directly by adding to demand, and other commodities indirectly by drawing cropland away from their production. Indeed, in the last year the supply of corn has increased 24 percent in the northern United States during 2007, primarily because of higher corn acreage (the highest since 1933). Ethanol capacity has risen by around 40 percent in the last year because of government incentives. As farmers shifted production to meet surging demand for ethanol, the acreage devoted to rice, cotton and soybeans has decreased by 3 percent, 18 percent, and 16 percent respectively."
Repeating
Rice down 3%
Cotton down 18%
Soybeans down 16%
"Primarily derived from corn in the United States, ethanol affects the price of corn directly by adding to demand, and other commodities indirectly by drawing cropland away from their production. Indeed, in the last year the supply of corn has increased 24 percent in the northern United States during 2007, primarily because of higher corn acreage (the highest since 1933). Ethanol capacity has risen by around 40 percent in the last year because of government incentives. As farmers shifted production to meet surging demand for ethanol, the acreage devoted to rice, cotton and soybeans has decreased by 3 percent, 18 percent, and 16 percent respectively."
Repeating
Rice down 3%
Cotton down 18%
Soybeans down 16%
Wednesday, April 30, 2008
Brazil Ethanol Tariff
A staffer for the Joint Economic Committee said Democrats are considering suspending the tariff on imported ethanol to encourage U.S. farmers to dedicate more acres to food, instead of fuel. Current trade policy discourages U.S. firms from buying Brazilian ethanol, which is made from sugar cane and costs about a third as much to produce as corn-based ethanol.
Ethanol Notes Today
About 25% of U.S. corn is turned into ethanol, according to U.S. Agriculture Department estimates, and corn futures have risen 70% in the past year and hit record highs on increased demand to use the grain both as food and fuel.
In December, Congress passed an energy bill that mandates increasing ethanol production to 36 billion gallons a year by 2022 from 7.5 billion gallons in 2012.
Analysts estimate about 10% of ADM profits this quarter came from ethanol.
The American Farm Bureau Federation and other farm groups plan to defend government support for ethanol, which they say has helped lower gas prices,
Trade groups such as the Grocery Manufacturers of America, meanwhile, argue that increased production of corn for ethanol has driven up prices for corn, wheat and other grains. Those increases, in turn, have boosted prices for bread, meat and dairy products. The Grocery Manufacturers of America say that while Congress may be able to control the weather, it should scale back government-mandated ethanol production requirements. Those incentives, they argue, are causing farmers to plant corn rather than wheat and other grains. "Certainly, reducing the amount of corn (for energy purposes) would have an immediate impact on commodity prices and ultimately on the price of processed foods," said Scott Faber, vice-president of federal affairs for GMA.
The IFPRI, a think tank supported by governments and private foundations, also concluded that 30% of the rise in food prices between 2000 and 2007 is due to increased production of biofuels.
On Monday, Sen. Kay Bailey Hutchison, R-Texas, proposed freezing the ethanol mandate at current levels to reduce ethanol's impact on world food prices.
"Our models analysis suggest that if a moratorium on biofuels would be issued in 2008, we could expect a price decline of maize by about 20 percent and for wheat by about 10 percent in 2009-10. So it's this significant," Joachim von Braun, heads of the International Food Policy Research Institute, told reporters in a briefing.
In December, Congress passed an energy bill that mandates increasing ethanol production to 36 billion gallons a year by 2022 from 7.5 billion gallons in 2012.
Analysts estimate about 10% of ADM profits this quarter came from ethanol.
The American Farm Bureau Federation and other farm groups plan to defend government support for ethanol, which they say has helped lower gas prices,
Trade groups such as the Grocery Manufacturers of America, meanwhile, argue that increased production of corn for ethanol has driven up prices for corn, wheat and other grains. Those increases, in turn, have boosted prices for bread, meat and dairy products. The Grocery Manufacturers of America say that while Congress may be able to control the weather, it should scale back government-mandated ethanol production requirements. Those incentives, they argue, are causing farmers to plant corn rather than wheat and other grains. "Certainly, reducing the amount of corn (for energy purposes) would have an immediate impact on commodity prices and ultimately on the price of processed foods," said Scott Faber, vice-president of federal affairs for GMA.
The IFPRI, a think tank supported by governments and private foundations, also concluded that 30% of the rise in food prices between 2000 and 2007 is due to increased production of biofuels.
On Monday, Sen. Kay Bailey Hutchison, R-Texas, proposed freezing the ethanol mandate at current levels to reduce ethanol's impact on world food prices.
"Our models analysis suggest that if a moratorium on biofuels would be issued in 2008, we could expect a price decline of maize by about 20 percent and for wheat by about 10 percent in 2009-10. So it's this significant," Joachim von Braun, heads of the International Food Policy Research Institute, told reporters in a briefing.
Tuesday, April 29, 2008
ADM
The head of Tyson Foods Inc. called for ethanol subsidies to be swept away. Dick Bond, chief executive of the largest U.S. meat processor, claimed the diversion of corn to produce ethanol was inflating prices for animal feed, and warned that consumers faced steep rises in food prices.
ADM's net profit rose to $517 million, or 80 cents a share, up from $363 million, or 56 cents a share, a year earlier. Revenue climbed 64% to $18.7 billion.
Ms. Woertz ADM CEO (former executive at Chevron), said food prices were being driven by rising energy costs and global protein demand rather than production of biofuels.
"I think the supply fundamentals of world crops are improving," Ms. Woertz said on a conference call with analysts after the U.S. company reported a 42% rise in its net profit for its fiscal third quarter ended March 31.
ADM's net profit rose to $517 million, or 80 cents a share, up from $363 million, or 56 cents a share, a year earlier. Revenue climbed 64% to $18.7 billion.
Ms. Woertz ADM CEO (former executive at Chevron), said food prices were being driven by rising energy costs and global protein demand rather than production of biofuels.
"I think the supply fundamentals of world crops are improving," Ms. Woertz said on a conference call with analysts after the U.S. company reported a 42% rise in its net profit for its fiscal third quarter ended March 31.
Monday, April 28, 2008
Unprofitable Ethanol
1. We are seeing food problems with an ethanol mandate currently of 7 billion gallons. The government has dictated we us 36 billion gallons by 2022. Where will this be grown?
2. If ethanol is important and helpful, why the large tariffs on Brazilian ethanol?
3. Even with the heavy government subsidies, a new ethanol plant is now not profitable. Why build any more. Guess who will have their hands out for heavier subsidies.
Following is an earlier article. Corn prices have risen since it was written.
Fortune Feb 28, 2008
Lower profit margins clearly favor ethanol leader Archer Daniels Midland. And the fact some of ADM's big plants run on coal instead of natural gas makes ADM's cost advantage that much greater.
plans for as many as 50 new ethanol plants have been shelved in recent months
Spurred by an ethanol plant construction binge, corn prices have gone stratospheric, soaring from below $2 a bushel in 2006 to over $5.25 a bushel today. As a result, it's become difficult for ethanol plants to make a healthy profit, even with oil at $100 a barrel.
$4 corn is a result of the 31 new ethanol plants built since 2005, but investors won't keep bankrolling new plants if $4 corn keeps eating up their profits
the ethanol business isn't going away, at least so long as the federal government continues to mandate the use of biofuels -- 36 billion gallons a year by 2022, up from 7 billion last year-and impose hefty tariffs on imported ethanol. There is an oversupply of ethanol right now, but the yearly increase in the biofuels mandate means that demand will eventually catch up with supply.
2. If ethanol is important and helpful, why the large tariffs on Brazilian ethanol?
3. Even with the heavy government subsidies, a new ethanol plant is now not profitable. Why build any more. Guess who will have their hands out for heavier subsidies.
Following is an earlier article. Corn prices have risen since it was written.
Fortune Feb 28, 2008
Lower profit margins clearly favor ethanol leader Archer Daniels Midland. And the fact some of ADM's big plants run on coal instead of natural gas makes ADM's cost advantage that much greater.
plans for as many as 50 new ethanol plants have been shelved in recent months
Spurred by an ethanol plant construction binge, corn prices have gone stratospheric, soaring from below $2 a bushel in 2006 to over $5.25 a bushel today. As a result, it's become difficult for ethanol plants to make a healthy profit, even with oil at $100 a barrel.
$4 corn is a result of the 31 new ethanol plants built since 2005, but investors won't keep bankrolling new plants if $4 corn keeps eating up their profits
the ethanol business isn't going away, at least so long as the federal government continues to mandate the use of biofuels -- 36 billion gallons a year by 2022, up from 7 billion last year-and impose hefty tariffs on imported ethanol. There is an oversupply of ethanol right now, but the yearly increase in the biofuels mandate means that demand will eventually catch up with supply.
Fickle Government
Another issue with government programs is fickle politicians. Let a company try to plan a business path, only to have the government change, based upon changing winds. The latest is the growing uproar on food prices and shortages. So those small ethanol and biofuels producers who faithfully followed the government lead and mandates will get stuck.
Farm Futures April 28, 2008
However; in order to get over the funding hurdle, some changes were made to ethanol tax credits. The federal tax break on ethanol was reduced six cents a gallon, from 51 to 45 cents, and tax credits for biodiesel were stripped from the bill. The tariff on imported ethanol was extended through 2010.
The permanent agricultural disaster aid program pushed for by Senate Finance Committee Chairman Max Baucus, D-Mont., remains in the bill, however at $3.8 billion rather than the original $4 billion that was proposed. Baucus says that the important thing is that the program is there.
Farm Futures April 28, 2008
However; in order to get over the funding hurdle, some changes were made to ethanol tax credits. The federal tax break on ethanol was reduced six cents a gallon, from 51 to 45 cents, and tax credits for biodiesel were stripped from the bill. The tariff on imported ethanol was extended through 2010.
The permanent agricultural disaster aid program pushed for by Senate Finance Committee Chairman Max Baucus, D-Mont., remains in the bill, however at $3.8 billion rather than the original $4 billion that was proposed. Baucus says that the important thing is that the program is there.
Sunday, April 27, 2008
More Data on Damage of Biofuels
Government forced mandates continue to cause problems
It is now beyond dispute that congressional mandates on ethanol use are having a number of deleterious effects, soaring food prices chief among them.
So given that, plus recent findings that greenhouse gas emissions from ethanol and biofuels may actually be greater than those created by conventional gasoline, a natural question arises: Which presidential candidate will first call for a change in U.S. ethanol policy?
Yet hard facts show that ethanol mandates will do little to stem our oil import needs. Even if U.S. corn farmers and producers of advanced biofuels manage to meet the target set by Congress in the Energy Independence and Security Act of 2007 (36 billion gallons of biofuels per year by 2022), that quantity would equal only about 18 percent (by volume) of America's oil imports.
Meanwhile, the mandates are helping push food prices higher. Several factors are at work here, including a growing global demand for grain, the falling value of the dollar, higher energy costs and poor harvests. But there's no question that the ethanol mandates are a key factor in the rising price of food. And the consequences are troubling: Food costs have led to riots in several countries in recent months.
This month, the Coalition for Balanced Food and Fuel Policy, a group funded by domestic beef, pork and chicken producers, released a report estimating that ethanol mandates now cost U.S. taxpayers $33 billion per year. That figure—which includes the costs of the ethanol subsidies and higher food prices—amounts to about $106 for each American.
A year ago, the Center for Agricultural and Rural Development at Iowa State University determined that higher food costs resulting from ethanol mandates were costing each citizen about $47 per year.
Anti-ethanol forces are growing. On Friday, Texas Gov. Rick Perry, a Republican, requested a waiver from the federal ethanol rules, saying that the "misguided mandate is significantly affecting Texans' family food bill." A press release issued by his office declared that the corn ethanol sector was creating "artificial demand" for grain that "is devastating the livestock industry in Texas."
A World Bank report this month pointed at biofuels as a cause of higher prices, saying "almost all of the increase in global maize (corn) production from 2004 to 2007 (the period when grain prices rose sharply) went for biofuels production in the U.S., while existing stocks were depleted by an increase in global consumption for other uses."
It is now beyond dispute that congressional mandates on ethanol use are having a number of deleterious effects, soaring food prices chief among them.
So given that, plus recent findings that greenhouse gas emissions from ethanol and biofuels may actually be greater than those created by conventional gasoline, a natural question arises: Which presidential candidate will first call for a change in U.S. ethanol policy?
Yet hard facts show that ethanol mandates will do little to stem our oil import needs. Even if U.S. corn farmers and producers of advanced biofuels manage to meet the target set by Congress in the Energy Independence and Security Act of 2007 (36 billion gallons of biofuels per year by 2022), that quantity would equal only about 18 percent (by volume) of America's oil imports.
Meanwhile, the mandates are helping push food prices higher. Several factors are at work here, including a growing global demand for grain, the falling value of the dollar, higher energy costs and poor harvests. But there's no question that the ethanol mandates are a key factor in the rising price of food. And the consequences are troubling: Food costs have led to riots in several countries in recent months.
This month, the Coalition for Balanced Food and Fuel Policy, a group funded by domestic beef, pork and chicken producers, released a report estimating that ethanol mandates now cost U.S. taxpayers $33 billion per year. That figure—which includes the costs of the ethanol subsidies and higher food prices—amounts to about $106 for each American.
A year ago, the Center for Agricultural and Rural Development at Iowa State University determined that higher food costs resulting from ethanol mandates were costing each citizen about $47 per year.
Anti-ethanol forces are growing. On Friday, Texas Gov. Rick Perry, a Republican, requested a waiver from the federal ethanol rules, saying that the "misguided mandate is significantly affecting Texans' family food bill." A press release issued by his office declared that the corn ethanol sector was creating "artificial demand" for grain that "is devastating the livestock industry in Texas."
A World Bank report this month pointed at biofuels as a cause of higher prices, saying "almost all of the increase in global maize (corn) production from 2004 to 2007 (the period when grain prices rose sharply) went for biofuels production in the U.S., while existing stocks were depleted by an increase in global consumption for other uses."
Foods to Biofuels
By Brigid Beatty and Michael Aubele
VALLEY NEWS DISPATCH
Sunday, April 27, 2008
Corn and other food prices will continue to climb, experts say, although why is a matter of debate.
The high prices are having an effect on others, such as dairy farmers, who have to buy field corn to feed their livestock.
VALLEY NEWS DISPATCH
Sunday, April 27, 2008
Corn and other food prices will continue to climb, experts say, although why is a matter of debate.
James W. Dunn, a Penn State University agriculture professor, said increased ethanol production is a primary factor. The United States, he said, "has diverted a huge amount of corn crops and acreage into ethanol production."
A few years ago, Dunn said, 1 billion bushels of corn were used to make the biofuel. This year, he said, the amount of corn used in production is expected to range from three billion to five billion bushels, which means less corn for the nation's food supply.
Ethanol, derived from field corn, has seen the biggest price increase. O'Neill said the price of field corn is hovering at about $6 per bushel, whereas two years ago, it sold for about $2 per bushel.The high prices are having an effect on others, such as dairy farmers, who have to buy field corn to feed their livestock.
Saturday, April 26, 2008
BP to buy into Brazil Biofuels
Biofuels will help with "energy independence"? What is the definition of "energy independence"? What is the objective of "energy independence"?
Calgary Herald April 25, 2008
Britain's BP took a stake in a big biofuels project and announced $1 billion US in investment jointly with Brazilian partners Thursday, the same day Cosan sealed an $826-million deal with ExxonMobil Corp. "It's a natural trend toward consolidation in the ethanol sector," said Julio Maria Borges, director at Job Economia sugar and ethanol consultants. "In 10 years we'll certainly see Brazil harvesting one billion tonnes of cane with only 20 industrial groups," Borges said.
Calgary Herald April 25, 2008
Britain's BP took a stake in a big biofuels project and announced $1 billion US in investment jointly with Brazilian partners Thursday, the same day Cosan sealed an $826-million deal with ExxonMobil Corp. "It's a natural trend toward consolidation in the ethanol sector," said Julio Maria Borges, director at Job Economia sugar and ethanol consultants. "In 10 years we'll certainly see Brazil harvesting one billion tonnes of cane with only 20 industrial groups," Borges said.
Phlippines Biofuels
Among the provisions recommended for inclusion in the roadmap were a ban on planting of biofuel feedstock on all irrigated and highly productive arable land and a ban on use of feedstock that would compete with food, including corn, wheat, soybean and rapeseed.
At least they begin to see foods to fuels, forced by the government, does not make sense. But, why not remove government intervention and dictates and let the market direct agricultural production. Government action by central bureaucratic planning makes things worse. Government planning is not responsive to needs and the market, but instead to lobbyists and special interests - thus typically making the situation worse.
Friday, April 25, 2008
Biofuels and Food
NY Sun April 25, 2008
C. Ford Runge, a professor of applied economics and law at the University of Minnesota, states “I don’t think anybody knows precisely how much ethanol contributes to the run-up in food prices, but the contribution is clearly substantial,”. A study by a Washington think tank, the International Food Policy Research Institute, indicated that between a quarter and a third of the recent hike in commodities prices is attributable to biofuels.
Last year, Mr. Runge and a colleague, Benjamin Senauer, wrote an article in Foreign Affairs, “How Biofuels Could Starve the Poor.”
It takes around 400 pounds of corn to make 25 gallons of ethanol.
A Harvard professor of environmental studies who has advised Mr. Gore, Michael McElroy, warned in a November-December 2006 article in Harvard Magazine that “the production of ethanol from either corn or sugar cane presents a new dilemma: whether the feedstock should be devoted to food or fuel. With increasing use of corn and sugar cane for fuel, a rise in related food prices would seem inevitable.” The article, “The Ethanol Illusion” went so far as to praise Senator McCain for summing up the corn-ethanol energy initiative launched in the United States in 2003 as “highway robbery perpetrated on the American public by Congress.
C. Ford Runge, a professor of applied economics and law at the University of Minnesota, states “I don’t think anybody knows precisely how much ethanol contributes to the run-up in food prices, but the contribution is clearly substantial,”. A study by a Washington think tank, the International Food Policy Research Institute, indicated that between a quarter and a third of the recent hike in commodities prices is attributable to biofuels.
Last year, Mr. Runge and a colleague, Benjamin Senauer, wrote an article in Foreign Affairs, “How Biofuels Could Starve the Poor.”
It takes around 400 pounds of corn to make 25 gallons of ethanol.
A Harvard professor of environmental studies who has advised Mr. Gore, Michael McElroy, warned in a November-December 2006 article in Harvard Magazine that “the production of ethanol from either corn or sugar cane presents a new dilemma: whether the feedstock should be devoted to food or fuel. With increasing use of corn and sugar cane for fuel, a rise in related food prices would seem inevitable.” The article, “The Ethanol Illusion” went so far as to praise Senator McCain for summing up the corn-ethanol energy initiative launched in the United States in 2003 as “highway robbery perpetrated on the American public by Congress.
Wednesday, April 23, 2008
Food Price/Shortage Complex
There are several issues with using foods for fuel and the impact this is having on the food supply. Warnings have been issued for a decade. However, a balanced perspective on causes is in order when considering the current shortages and price increases. Oil producing countries are attempting to blame food price increases exclusively on biofuels. Issues are much more complex with multiple causes.
The primary problem with the food supply is government involvement to serve special interest groups at costs to others. Some special interest groups are calling for more government action, yet this is a core cause of food problems.
A key issue with biofuels is removing a buffer capacity in the food supply, exposing the worlds food supply to vulnerabilities exacerbated by other factors. Biofuels add to the potential for a "perfect storm" in the food supply.
Factors for the current shortage and price increase, in no particular order, include:
1. Government payments to farmers to not produce crops?
2. Governments erect crop trade barriers preventing free production and flow of goods
3. Biofuels - The USA diverted one-third of corn into ethanol for vehicles. More acreage is set aside for ethanol production. This has increased prices for corn and other staples such as soybeans and cotton.
6. Commodity Speculation - An influx of investors and speculators has exaggerated prices. Big Wall Street firms and hedge funds have taken huge positions in futures markets that once were dominated by relatively small operators such as farmers and grain-elevator owners.
The primary problem with the food supply is government involvement to serve special interest groups at costs to others. Some special interest groups are calling for more government action, yet this is a core cause of food problems.
A key issue with biofuels is removing a buffer capacity in the food supply, exposing the worlds food supply to vulnerabilities exacerbated by other factors. Biofuels add to the potential for a "perfect storm" in the food supply.
Factors for the current shortage and price increase, in no particular order, include:
1. Government payments to farmers to not produce crops?
2. Governments erect crop trade barriers preventing free production and flow of goods
3. Biofuels - The USA diverted one-third of corn into ethanol for vehicles. More acreage is set aside for ethanol production. This has increased prices for corn and other staples such as soybeans and cotton.
4. Natural climate cycles cause shortages - U.S. wheat stocks are at the lowest levels in 60 years because worldwide consumption of wheat has exceeded production in six of the past eight years. Back-to-back failure of two years of wheat crops caused by drought in Australia.
5. Energy costs have drastically increased: Farmers also have raised prices because they have been hard hit by spiraling energy costs. This has also driven up the cost of nitrogen fertilizer made from natural gas.6. Commodity Speculation - An influx of investors and speculators has exaggerated prices. Big Wall Street firms and hedge funds have taken huge positions in futures markets that once were dominated by relatively small operators such as farmers and grain-elevator owners.
Peru and Bolivia: Biofuels Starving Our People
Cato April 22, 2008
"The leaders of Bolivia and Peru have attacked the use of biofuels, saying they have made food too expensive for the poor," reports The Guardian. "Speaking at the United Nations, the Bolivian president, Evo Morales, said the increased use of farmland for fuel crops was causing a 'tremendous increase' in food prices."
"In recent years, we've heard that climate change could be catastrophic for nature and humanity. But it's becoming increasingly evident that over the next few decades, climate-change policies could prove even more catastrophic. ... Climate-change remedies can lead to greater poverty, starvation and disease, as well as widespread ecological destruction -- some of the very misfortunes that they're supposed to prevent. In our haste to address global warming, we have yet to think seriously about our policies' unintended effects. The results have been disastrous, and they're only getting more so."
Monday, April 21, 2008
Oil Countries Blame Biofuels for all food costs
I find it disingenuous that the oil producing countries blame all the increased food costs on biofuels. In other words, they claim no increased energy costs for crop production, fertilizer, food distribution..................... The oil producing countries are purposefully running up prices
Qatari Energy Minister Abdullah bin Hamad al Attiyah said the world would have to choose "what its priority is going to be -- driving or eating." He rejected suggestions that high oil prices were behind the food crisis. "It's not oil that should be questioned, it's biofuels, which are at the root of the problem," al Attiyah said.
When ever you see someone blank slate blame some other group, it is time to take a hard look at them.
Italian Prime Minister
AFP April 21, 2008
"A conflict (is) emerging between foodstuffs and fuel ... with disastrous social conflicts and dubious environmental results," outgoing Italian Prime Minister Romano Prodi told the International Energy Forum here as rising food prices worldwide raise the spectre of famine in some countries.
Agricultural prices were not only being driven by rising demand but also by increased cultivation of biofuels, "creating strong tensions in a number of countries," he said.
"A conflict (is) emerging between foodstuffs and fuel ... with disastrous social conflicts and dubious environmental results," outgoing Italian Prime Minister Romano Prodi told the International Energy Forum here as rising food prices worldwide raise the spectre of famine in some countries.
Agricultural prices were not only being driven by rising demand but also by increased cultivation of biofuels, "creating strong tensions in a number of countries," he said.
Investors burnt in biofuel explosion
Article shows conflicting government interest are damaging small biofuels producers to the benefit of large. They don't discuss, but it does show, the industry is driven by government policies. A little change in policy can easily favor one group over another - not free markets. Yet, they call for more government involvement and incentives????
Globe Asia April 07,2008
In January, the Netherlands announced that it would no longer subsidize the import of palm oil, the main source of “green” power generation, after evidence showed biofuel sources were grown on Asian plantations created from drained peat land with disastrous environmental consequences.
Industry operators say the government should give additional incentives to biofuel users. “No matter where you are, new energy is always more expensive than conventional sources. The government should give incentives to push the development of biofuel,” says Adrisman.
Globe Asia April 07,2008
In January, the Netherlands announced that it would no longer subsidize the import of palm oil, the main source of “green” power generation, after evidence showed biofuel sources were grown on Asian plantations created from drained peat land with disastrous environmental consequences.
Industry operators say the government should give additional incentives to biofuel users. “No matter where you are, new energy is always more expensive than conventional sources. The government should give incentives to push the development of biofuel,” says Adrisman.
Sunday, April 20, 2008
A general problem in the media is that now we are seeing food shortages, they propose a solution of MORE government involvement. They see problems due to a number of factors, many have a root cause in various governments policies, yet the propose a solution of more government?
Updates Today
April 18 (Bloomberg) -- The U.S. and Europe may have to reconsider their promotion of biofuels in the wake of surging food prices around the world, International Monetary Fund Chief Economist Simon Johnson said
World food prices have surged by about 83 percent in the past three years, provoking riots in poor nations and threatening to set back efforts to reduce global poverty, according to the World Bank and IMF.
Reuters April 20, 2006
An official from the International Energy Agency also said the impact of biofuels should have been forseen.
Domain B April 20
Demand for biofuels, along with increased competition for cropland between food and fuel uses, is taking up much of the increase in the global crop production, according to a World Bank report. Food production is failing to keep up with demand, the bank added.
Washington Post April 20 - Worsening Food Crisis
To many, the villain is biofuels. U.S. and European ethanol programs, intended as an antidote to climate change and an alternative to OPEC oil, stand accused of snatching food from the world's hungry. According to India's finance minister, ethanol is "a crime against humanity." And it is part of the problem. The more corn becomes ethanol, the less will be available as food for people and livestock. In the U.S. farm belt, heavy ethanol subsidies, such as a tax break of 51 cents a gallon, encourage the shift. These subsidies were already questionable, in economic terms, before the commodity crunch. That they might contribute to hardship for the world's poor is another argument for reducing them.
Relief Web April 20
The switch to biofuels is correlated with food price rises over the past year, and, with consumption likely to grow, is expected to drive further food price inflation.
Updates Today
April 18 (Bloomberg) -- The U.S. and Europe may have to reconsider their promotion of biofuels in the wake of surging food prices around the world, International Monetary Fund Chief Economist Simon Johnson said
World food prices have surged by about 83 percent in the past three years, provoking riots in poor nations and threatening to set back efforts to reduce global poverty, according to the World Bank and IMF.
Reuters April 20, 2006
An official from the International Energy Agency also said the impact of biofuels should have been forseen.
Domain B April 20
Demand for biofuels, along with increased competition for cropland between food and fuel uses, is taking up much of the increase in the global crop production, according to a World Bank report. Food production is failing to keep up with demand, the bank added.
Washington Post April 20 - Worsening Food Crisis
To many, the villain is biofuels. U.S. and European ethanol programs, intended as an antidote to climate change and an alternative to OPEC oil, stand accused of snatching food from the world's hungry. According to India's finance minister, ethanol is "a crime against humanity." And it is part of the problem. The more corn becomes ethanol, the less will be available as food for people and livestock. In the U.S. farm belt, heavy ethanol subsidies, such as a tax break of 51 cents a gallon, encourage the shift. These subsidies were already questionable, in economic terms, before the commodity crunch. That they might contribute to hardship for the world's poor is another argument for reducing them.
Relief Web April 20
The switch to biofuels is correlated with food price rises over the past year, and, with consumption likely to grow, is expected to drive further food price inflation.
Saturday, April 19, 2008
WSJ Jan 2008
The University of California at Berkeley’s Transportation Sustainability Research Center told the California Air Resources Board that ethanol could be twice as bad as gasoline, from a carbon-emissions point of view.
The University of California at Berkeley’s Transportation Sustainability Research Center told the California Air Resources Board that ethanol could be twice as bad as gasoline, from a carbon-emissions point of view.
False Hope of BioFuels 2007
Washington Post July 2007
http://www.washingtonpost.com/wp-dyn/content/article/2006/06/30/AR2006063001480.html
But as we've looked at biofuels more closely, we've concluded that they're not a practical long-term solution to our need for transport fuels. Even if all of the 300 million acres (500,000 square miles) of currently harvested U.S. cropland produced ethanol, it wouldn't supply all of the gasoline and diesel fuel we now burn for transport, and it would supply only about half of the needs for the year 2025. And the effects on land and agriculture would be devastating.
http://www.washingtonpost.com/wp-dyn/content/article/2006/06/30/AR2006063001480.html
But as we've looked at biofuels more closely, we've concluded that they're not a practical long-term solution to our need for transport fuels. Even if all of the 300 million acres (500,000 square miles) of currently harvested U.S. cropland produced ethanol, it wouldn't supply all of the gasoline and diesel fuel we now burn for transport, and it would supply only about half of the needs for the year 2025. And the effects on land and agriculture would be devastating.
2007 Biofuels Article - Biofuels Myths
Hearld Tribune June 2007
http://www.iht.com/articles/2007/07/10/opinion/edholt.php
Some highlights include:
The world's poorest already spend 50 to 80 percent of household income on food. They suffer when high fuel prices push up food prices.
They obscure the political-economic relationships between land, people, resources and food, and fail to help us understand the profound consequences of the industrial transformation of our food and fuel systems.
These targets far exceed the agricultural capacities of the industrial North. Europe would need to plant 70 percent of its farmland with fuel crops. The entire corn and soy harvest of the United States would need to be processed as ethanol and biodiesel.
Every ton of palm oil generates 33 tons of carbon dioxide emissions - 10 times more than petroleum. Tropical forests cleared for sugar cane ethanol emit 50 percent more greenhouse gases than the production and use of the same amount of gasoline.
Soybeans supply 40 percent of Brazil's biofuels. NASA has correlated their market price with the destruction of the Amazon rainforest - currently at nearly 325,000 hectares a year.
http://www.iht.com/articles/2007/07/10/opinion/edholt.php
Some highlights include:
The world's poorest already spend 50 to 80 percent of household income on food. They suffer when high fuel prices push up food prices.
They obscure the political-economic relationships between land, people, resources and food, and fail to help us understand the profound consequences of the industrial transformation of our food and fuel systems.
These targets far exceed the agricultural capacities of the industrial North. Europe would need to plant 70 percent of its farmland with fuel crops. The entire corn and soy harvest of the United States would need to be processed as ethanol and biodiesel.
Every ton of palm oil generates 33 tons of carbon dioxide emissions - 10 times more than petroleum. Tropical forests cleared for sugar cane ethanol emit 50 percent more greenhouse gases than the production and use of the same amount of gasoline.
Soybeans supply 40 percent of Brazil's biofuels. NASA has correlated their market price with the destruction of the Amazon rainforest - currently at nearly 325,000 hectares a year.
Rush for biofuels threatens starvation on a global scale
Unfortunately we may see the "perfect storm" in food. While biofuels may not be the 100% cause, the use of foods for biofuels may have removed a buffer from the worlds food supply. Thus, a little extra pressure from some other cause, leads to extensive shortages. A small upset in some area may also then have catastrophic consequences.
Times UK
http://www.timesonline.co.uk/tol/news/environment/article3500954.ece
“It’s very hard to imagine how we can see the world growing enough crops to produce renewable energy and at the same time meet the enormous demand for food,”
"Josette Sheeran, executive director of the World Food Programme, told the European Parliament in Brussels yesterday: “The shift to biofuels production has diverted lands out of the food chain. "
"The US now devotes more acreage to growing corn than at any time since 1944. Farmers planted 90.5 million acres in 2007, 15 per cent more than a year before."
"Critics have been angered by the loss of tropical rainforests, which have been cleared to allow farmers to grow biofuel crops."
Times UK
http://www.timesonline.co.uk/tol/news/environment/article3500954.ece
“It’s very hard to imagine how we can see the world growing enough crops to produce renewable energy and at the same time meet the enormous demand for food,”
"Josette Sheeran, executive director of the World Food Programme, told the European Parliament in Brussels yesterday: “The shift to biofuels production has diverted lands out of the food chain. "
"The US now devotes more acreage to growing corn than at any time since 1944. Farmers planted 90.5 million acres in 2007, 15 per cent more than a year before."
"Critics have been angered by the loss of tropical rainforests, which have been cleared to allow farmers to grow biofuel crops."
Food to Fuels 2006
Potential issues with biofuels were raised several years back. We often find that when governments get involved there are unintended consequences on a severe scale.
Times UK late Summer 2006
An an interview with The Times, he said that the U.K. faces soaring food prices, a shortage of staple foods and declining public health if the country's government forges ahead with plans to promote the use of biofuels.
Times UK late Summer 2006
An an interview with The Times, he said that the U.K. faces soaring food prices, a shortage of staple foods and declining public health if the country's government forges ahead with plans to promote the use of biofuels.
Unilever is worried that European plans for a dramatic increase in use of vegetable oils in the manufacture of automotive fuels will drive up the cost of foods such as margarine and lead consumers to switch to less healthy animal fats. "The scale is dramatic. To meet current EU quotas would require between 50% and 80% of rapeseed production. Ultimately, there could be supply shortages," said Jope.
The price of both rapeseed and palm oil has also risen more than 20% as some Asian countries set aside their crops to produce biodiesel. Jope believes this price increase will have knock-on effects on food, and eventually, pubic health. For every 1% rise in the price of margarine, there is a 1% fall in consumption, says Jope. "The switch from healthy vegetable oils (to butter and animal fat) will have a dramatic impact on public health," The Times quotes Jope as saying.
The best vegetable oil for use as a biofuel is thought to be rapeseed, which is relatively thin, cheap to produce and easy to get hold of. Palm oil is also becoming increasingly popular.
The European Commission's enthusiasm for biofuels--it wants to increase the proportion of biofuel used in road transport to 5.75% by 2010 from 0.8% now--could be causing deforestation in South America and Asia, where rain forests are felled to clear land for crops used to produce ethanol.
"Superficially, it looks politically altruistic for a politician to say we are going to replace dwindling reserves of fossil fuels with renewable biofuels. We are now seeing the prospect of very material deforestation," said Jope.
"Biofuels have been presented as universally good thing," a Unilever spokesman told Forbes.com. He said that a "food versus fuel" debate could emerge as huge areas of land are needed to grow the crops necessary for biofuels, adding that the energy industry used land in a "terribly inefficient" way.
Focusing efforts on "second-generation" biofuel technologies such as wood chips, straw and pulp would have less environmental impact than claiming vast swathes of land for growing crops destined to be digested by cars, added the spokesman.
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