Is Ethanol To Blame for All Our Global Woes?

The last two weeks ethanol has got more bad press then ever. But oil is at record high prices, so what’s going on? Ethanol is getting more flack than OPEC. I hope you guys know that OPEC’s mid-east fund made up of OPEC’s countries have put US $40 Billion dollars into commodity index funds, which pushes grain prices up. Boy, you should have listened to CNBC where they all dogged ethanol big this week. What’s going on? — J.D., Boise, Idaho

J.D.,

Good questions — biofuels seem to be taking the wrap for everything wrong in the world. In the April 24th New York Times Op Ed “Bring on the Right Biofuels” by Roger Cohen, he states, “The supposed crimes of biofuels are manifold. They’re behind soaring global commodity prices, the destruction of the Amazon rain forest, increased rather than diminished greenhouse gases, food riots in Haiti, Indonesian deforestation and, no doubt, your mother-in-law’s toothache. Most of this, to borrow a farm image, is “hogwash and bilge.”

Cohen continues that, “Much larger trends are at work.” The Washington Post had a great review on world food prices in it’s April 27th edition, and attributes the global food prices to the following reasons:

1. Major countries have introduced or increased export taxes or actual bans on certain agricultural products (rice and grains) to keep down their own domestic prices.

2. Global economic growth and growth in emerging countries (especially China and India) are changing diets (for instance Chinese per capita meat consumption has grown from 44 pounds in 1980 to 100 lbs in 2008) and it takes 7-8.5 pounds of grain to produce a pound of beef and 5-7 pounds of grain to produce a pound of pork.

3. Global weather patterns — heat waves, drought and excessive rain in grain-producing countries have taken a toll on output in the past few years — in millions of tons: Australia 13.6 in 2006 to 5.7 in 2008* (predicted*), European Union 45.1 in 2006 to 30 in 2008*, United States 71.7 in 2006 to 48.1 in 2008.*

4. Fuel price increases have made it costlier to grow (irrigation, pesticides, fertilizers) and transport rice and grains — in 2007, US $60 per ton from U.S. gulf coast to Japan or US $38 per ton from gulf coast to Europe, and in April 2008, US $110/ton and US $75 per ton, respectively.

5. Biofuels have contributed (along with weather and increases in energy prices) to drive U.S. corn prices up by 50%, so Europe has imported cheaper sorghum for livestock feed, raising sorghum (a grain consumed widely by the world’s poorest people) from US $98 in 2005 per metric ton to US $191 per metric ton in 2008. Over 85% of the U.S. corn crop is used for animal feed.

According to the U.S. Department of Agriculture, “Field corn is the predominant corn type grown in the U.S., and it is primarily used for animal feed. Currently, less than 10 percent of the U.S. field corn crop is used for direct domestic human consumption in corn-based foods such as corn meal, corn starch and corn flakes, while the remainder is used for animal feed, exports, ethanol production, seed and industrial uses. Sweet corn, both white and yellow, is usually consumed as immature whole-kernel corn by humans and also as an ingredient in other corn-based foods, but makes up only about 1 percent of total U.S. corn production.”

Again, I want to make perfectly clear that cellulosic conversion is the “end game” for biofuels. Waste products including sewage, wood waste, contaminated agricultural and food-processing wastes, and forest thinnings and lawn wastes are the first tier biofuels resources, followed by low-water, low-energy input crops including switchgrass, jahoba, wild maize, honey locust and eucalyptus trees, among many others. And while biofuels have positive energy balances now, these balances will further increase using these new resources and these new cellulosic processes.

Both private investment and government policy are clearly driving technology, project development and intermediate investment into cellulosic conversion with actual grants from the U.S. Department of Energy (DOE) and the U.S. Department of Agriculture (USDA) along with federal loan guarantees towards cellulosic conversion. This allows the gains in biofuels from the days of large corn surpluses that rotted in farm silos, to the next era of waste-based and non-food-based sustainable biofuels.

In the mean time, if your kids get acne, don’t blame it on biofuels.

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Scott, founder and president of The Stella Group, Ltd., in Washington, DC, is the Chair of the Steering Committee of the Sustainable Energy Coalition and serves on the Business Council for Sustainable Energy, and The Solar Foundation. The Stella Group, Ltd., a strategic marketing and policy firm for clean distributed energy users and companies using renewable energy, energy efficiency and storage. Sklar is an Adjunct Professor at The George Washington University teaching two unique interdisciplinary courses on sustainable energy, and is an Affiliated Professor of CATIE, the graduate university based in Costa Rica. . On June 19, 2014, Scott Sklar was awarded the prestigious The Charles Greely Abbot Award by the American Solar Energy Society (ASES) and on April 26, 2014 was awarded the Green Patriot Award by George Mason University in Virginia.

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