02 January 2010

The Trillion Dollar Ethanol Maw

The entire article below is worth reading, but the excerpt below is what really jumped out at me. Ethanol must be highly subsidized, and generates big profits for big corporate farms and refineries.

The lobbyists employed by ethanol producers ensures the continuing subsidy, which is against the public interest. The justification for ethanol is false: it does not improve the environment (to the contrary, it degrades the environment), and it increases food costs for the poor.

The ethanol requirement is opposed by automakers, as ethanol damages engines, and increases warranty costs.

So why do the politicians fund it? Lobbyists and campaign contributions. An early Iowa primary helps on the presidential level.

Foreign Affairs: Against the Grain
Why Failing to Complete the Green Revolution Could Bring the Next Famine (registration required)

The poor's need for food is inextricably connected to the debate about clean energy and carbon emissions. Food is, after all, energy itself, measured in caloric units, and its production consumes energy and emits carbon. Crops such as corn, soybeans, rapeseed, and oil palm are now the primary sources of biofuels, which means that the prices for these crops track the price of oil. Most important, the demand for crops for biofuel production is huge: over a third of the corn grown in the United States in 2009 will be consumed not by livestock or humans but by ethanol factories. This has created, as Brown puts it, "an epic competition between cars and people for the grain supply.

Yet in the United States, the biofuel juggernaut continues. Legislation passed in 2005 mandated that the production of ethanol reach 7.5 billion gallons by 2012. In 2007, the Energy Independence and Security Act upped this mandate to 15 billion gallons and also mandated 20.5 billion gallons by 2015 and 36 billion gallons by 2022.

Much of the total ethanol mandate was to be satisfied by corn, the rest by new sources of ethanol, such as cellulose. As a result, the mandate for corn-based ethanol also increased, from 7.5 billion gallons by 2012 under the 2005 legislation to 13 billion gallons by 2012 under the 2007 legislation. This, in turn, has driven up demand for corn to be used for ethanol production, which was roughly 200 million bushels per year until 2005 and rose to about 800 million bushels per year for 2005 through 2009.

The Energy Independence and Security Act capped corn-based ethanol production at 15 billion gallons from 2015 onward, so that 21 billion of the 36 billion gallons mandated by 2022 are supposed to come from cellulose, among other things. But these advanced biofuels have yet to be produced commercially, which means that corn production will almost certainly have to increase further in order to feed the ethanol maw. This is all the more likely given that President Barack Obama has proposed raising the overall ethanol mandate to 60 billion gallons by 2030 -- a move that, according to Doug Koplow, founder and director of the energy consulting firm Earth Track, could cost U.S. taxpayers $1 trillion.

In an analysis of the pressure that this new demand will put on food supplies and prices, one of us, Carlisle Ford Runge, along with colleagues at the University of Minnesota, the International Food Policy Research Institute, and the Mayo Clinic, traced the ultimate effects of high food prices to poor and malnourished children under the age of five. Using an econometric model developed at the International Food Policy Research Institute, the group determined that about 30 percent of the projected increases in global food prices over the next several decades can be attributed to increased biofuel production worldwide.

Increased prices make it harder for poor households to feed themselves, leading to greater malnutrition, especially among children. Since about half of all infant deaths in poor countries are directly connected to malnourishment, any increase in malnourishment will sicken or kill millions of children over the next decade and a half.

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