Don't just blame rising food prices on ethanol
Is ethanol wrongly blamed for the high price of corn? Yes, says U.S. Sen. Jeff Bingaman, D-N.M., and a recent study.
The increased use of corn for biofuel has taken much of the blame for higher corn prices worldwide, and last week, Sen. John McCain of Arizona and 23 other Republican senators asked the Environmental Protection Agency to ease up on federal rules requiring the blending of ethanol with gasoline.
Sen. Kay Bailey Hutchison, R-Texas, told the Wall Street Journal: "With the price of everyday meat, chicken, bread and eggs rapidly increasing, we are asking the EPA to use the flexibility that Congress gave them, because so many families cannot afford the increasing prices at the grocery store."
Sen. Barack Obama, D-Ill., climbed on board over the weekend. During an appearance on Meet the Press Sunday, he said: “My top priority is making sure people are able to get enough to eat. If it turns out we need to make changes in our ethanol policy to help people get something to eat, that has got to be the step we take."
Meanwhile, Sen. Bingaman, chairman of the Senate Energy Committee, recently pointed out that corn-based ethanol is responsible for relatively little of the price spike.
“Well, I think most of the food crisis around the world is not in any way related to ethanol,” Sen. Bingaman told reporter Jeff Young in a segment of the radio show “Living on Earth” that aired on April 25.
“It’s not food, it’s not fuel, it’s China,” claims Jim Lane, editor of Biofuels Digest and author of a recent study on the impact of China on the global corn market.
Apparently, China is buying lots and lots and lots of corn to feed to cattle.
The study found: Rising demand for grain in China, stemming from an increase in meat consumption, is overwhelmingly the cause of supply and demand imbalances in corn production. …The growth rate for grain in China is so intense that, even if the U.S. ethanol industry were completely shut down tomorrow, increased Chinese demand would soak up the excess grain by 2011.
Although it was published before the most recent round of remarks by presidential candidates, the study tackles the viewpoint behind comments like those of Sen. Hutchison:
Much of the criticism in this period has been aimed at U.S. government policy with respect to subsidizing the production of biofuels, and in particular the production of ethanol from field corn, used primarily hitherto to feed livestock.
Since field corn can be used for livestock as well as biofuels, and corn itself is used for a wide variety of products, such as corn syrup or edible corn, the use of corn for biofuels has attracted enormous attention in the popular press. Much of the coverage has been negative, with critics such as Jean Ziegler, U.N. Special Rapporteur on the Right to Food, calling the practice of using food crops for fuel production a “crime against humanity.”
Sen. Hillary Clinton, D-N.Y., weighed in on ABC’s “This Week," saying "What we need to do is accelerate the research into farm waste and into other cellulosic plant materials. Because, I think, instead of using the corn, let's figure out if we can use the corn cob."
That's precisely what her colleagues had in mind back in December 2007, when Sen. Bingaman helped to pass the Renewable Fuels, Consumer Protection and Energy Efficiency Act, which mandated a fivefold increase of ethanol production — from corn and other sources — over the next 15 years. Specifically, U.S. consumption of biofuels is now targeted at 36 million gallons by 2022, the majority of which must come from sources other than corn. (But because consumption — not production — is mandated, those biofuels don’t have to be made in the United States. They can come from Brazilian sugarcane, for example.)
One of the provisions in the new farm bill, currently wending its way through committee, would reduce the current tax credit for ethanol processors from 51 cents per gallon to 45 cents per gallon. Meanwhile, cellulosic ethanol (Clinton’s corn cobs instead of corn) would be subsidized by as much as $1 per gallon.
Because the cellulosic ethanol industry is still in its infancy, supporters say, those subsidies are much needed.
According to the Christian Science Monitor:
“Second-generation biofuels made from waste products such as citrus peel, corncobs, and wood chips are under development and should be produced on a commercial scale within three to four years,” says Reid Detchon, executive director of the Energy Future Coalition, a think tank funded by the U.N. Foundation. That is likely to eliminate much of the food-versus-fuel debate.
In New Mexico, as NMI reported this week, research is now focusing on the possibility of algae as a source of fuel. We can see it now: Biofuel from algae sends the price of Odwalla’s spirulina-soaked Superfood drinks through the roof.
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