Consequences We’ll All Pay For
Longtime readers here will find nothing new in this article from Bloomberg. I have written many times about the wasteful fraud of ethanol. It diverts much needed food, causing food prices to skyrocket. It is a grossly inefficient fuel that is actually worse for the planet than the alternative. And it is making big agriculture interests gobs of unneeded cash.
Feb. 21 (Bloomberg) — U.S. plans to replace 15 percent of gasoline consumption with crop-based fuels including ethanol are already leading to some unintended consequences as food prices and fertilizer costs increase.
About 33 percent of U.S. corn will be used for fuel during the next decade, up from 11 percent in 2002, the Agriculture Department estimates. Corn rose 20 percent to a record on the Chicago Board of Trade since Dec. 19, the day President George W. Bush signed a law requiring a fivefold jump in renewable fuels by 2022.
Increased demand for the grain helped boost food prices by 4.9 percent last year, the most since 1990, and will reduce global inventories of corn to the lowest in 24 years, government data show. While advocates say ethanol is cleaner than gasoline, a Princeton University study this month said it causes more environmental harm than fossil fuels.
“We are mandating and subsidizing something that is distorting the marketplace,'' said Cal Dooley, a former U.S. congressman from California, who represents companies including Kraft Foods Inc. and General Mills Inc. as president of the Grocery Manufacturers Association in Washington. “There are no excess commodities, and prices are rising.''
The energy bill requires the U.S. to use 36 billion gallons of renewable fuels by 2022, of which about 15 billion gallons may come from corn-based ethanol. The nation's current production capacity is about 8.06 billion gallons.
Mind you, the industry lobbyists are very, very bullish on ethanol - so much so that they are touting "and then a miracle happens" as the next solution. Despite the environmental damage already being done:
Researchers led by Timothy Searchinger at Princeton University said their study showed greenhouse-gas emissions will rise with ethanol demand. U.S. farmers will use more land for fuel, forcing poorer countries to cut down rainforests and use other undeveloped land for farms, the study said.
Searchinger's team determined that corn-based ethanol almost doubles greenhouse-gas output over 30 years when considering land-use changes. Bob Dinneen, president of the Renewable Fuels Association in Washington, said the study used a flawed model and overestimated how much land will be needed.
Ethanol is important in reducing emissions, ending energy dependence on the Middle East and creating jobs in rural areas, Dinneen said today at the USDA conference.
“There are still some who want us to choose between food and fuel,'' said Dinneen, whose organization represents ethanol producers including Archer Daniels Midland Co. “I don't think we have to choose.'' Research shows cellulosic ethanol made from grasses and crop waste may contribute 21 billion gallons by 2022, and farmers will be able to boost yields, he said.
Pigs may get wings and fly about fanning us with gentle breezes, too. It is not exactly a great idea to base policy on what may happen. What we already know is that ethanol is a bad bargain that is having real, immediate consequences that we will all pay for.
Environment, Taxes | Gaius Saturday, 23 February , 2008
By Sam, Saturday, 23 February , 2008 @ 10:29 am
Gaius, I know you like corn ethanol only slightly more than you like Hillary, based on how often you post about both of them, but I am going to have to disagree. The main problem with corn ethanol are the government subsidies, import tariff protections, and mandates. Not that people are turning corn into alcohol. If they can do it at a profit without all the government handouts, then I say more power to them.I think that it is great that farmers are finally getting a good price for their corn. I actually think it is good to have prosperous farmers, not farmers perpetually on the brink of financial ruin. And all the discussion about taking food out of poor peoples mouths, and inflated corn tortilla prices is just BS. We should be encouraging 3rd world farmers to grow their own food, not import it from Iowa. They can do it when commodity prices are not artificially suppressed by US and European farm subsidies and tariffs.Personally I would much rather send my fuel dollars to a fellow in the Midwest than a fellow in the Mideast, (or maybe Venezuela). For all your griping about ethanol, I have yet to see you discuss what you think we should do instead. At least the ethanol folks are trying to come up with a solution, imperfect as it may be. What is the solution being proposed by all the folks slamming ethanol?I don’t think that corn ethanol fuel has a good future ahead of it. Ethanol or other liquid fuels made from cellulose, municipal waste, coal, old tires, etc. seem like a better long term solution to me. But ethanol from corn is a start. The first solar cells and windmills weren’t particularly cost effective either, but they are gradually getting better and will eventually become cost effective with their fossil counterparts. Ethanol and liquid fuels from corn and other sources will become more cost effective if given a chance to become so. It will never happen if people are more interested in smothering the baby in the crib than with helping it to grow.<End of rant.