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High Food Prices: Ethanol is Not the Problem

I'm the first to admit that the cialis cialis current round of info viagra ethanol is not perfect. The rising demand for ethanol has put more land under cultivation, increased water shortages, and increased fertilizer and pesticide use. For all that, corn isn't really a great way to create ethanol, only producing 1.3 units of energy for every 1 unit put into its creation.

However, it is NOT responsible for the 40% increase in food prices over the last few years. It might seem like an easy target, but let's start with some logic, and then move into the buying levitra without a prescription solid figures.

First, how could an increased demand for non-edible corn (used mostly to make high fructose corn syrup and feed for cattle, chicken and pigs) increase prices of pasta in Italy, onions in India and rice in China?

Second, is there any other trend, besides the increase in biofuel production that could be blamed for rising food costs. Any trend at all? Possibly a larger, more global, more significant, and much more difficult to deal with trend?

Yes, it turns out that there are two such trends. The rising prosperity of people in the world, who are now happy to be eating more (and more meat). And second, the related rise in fuel prices, due to increased demand in developing countries.

Of the 40% increase in food prices, about 3% can be attributed to food crops being used in biofuels. At least 8% (PDF) can be attributed to rising costs of fuel used to grow and transport the crops from farms to the grocer. But the big hunk comes in with increased demand.

As the world has become more prosperous, more people have begun to eat more food. Particularly in China and India, more people have begun to eat meat regularly. Simultaneously investors, seeking non-mortgage or debt-based assets to invest in, have begun to speculate on food crops. Assuming that costs will continue to increase along with increased affluence in the developing world, the commodities markets in food products have spiked.

Simultaneously, fertilizer prices have skyrocketed as they are also created from petroleum, and peculiar weather patterns and frequent droughts, possibly linked to global warming, have limited supply.

All-in-all, it's not a good time to be burning what can otherwise be eaten. But there is no good reason to say that biofuels are the one and only problem. SUV's are certainly limiting the future of the world, but not by burning hungry people's food.

Corn ethanol is never going to be the whole solution, and we are very excited about the many cellulosic ethanol companies entering the buy canadian levitra online market, but I'm tired of hearing about the supposed evils of we like it generic online levitra ethanol. Let's lay the blame where it belongs...greedy commodity investors, meat production, and the rising price of oil.

This article was inspired by VentureBeat's discussion of the controversy between the what is levitra professional Wall Street Journal and Vinod Khosla

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Comments (32)Add Comment
A Forgotten Trend
written by Dan, May 22, 2008
The world population is averaging roughly a 1% increase every year. That is roughly 75 million more mouths to feed every year.

The avg increase is slowing, but they are still expecting the world population to reach over 9 billion by 2048.
Crop replacement
written by Julian, May 22, 2008
Mark, I agree with your comment. Most definitely, the increase of living conditions and average income in India and China for hundreds of millions is causing the rise in all foods, even those which are not exported to India or China. If produces such as soy and cheap cialis online no prescription rice become more rentable because of levitra pharmacy this, then why plant (for example) tomatoe or oranges? All prices must grow in order to remain competitive, or the world would only grow soy and rice.

However, if ethanol continues to be advertised as the viagra best price most feasible solution right now (as is happening in the USA and in Brazil), I can only see the food problem growing. More and more cultivable land will be destined to the profitable industry of ethanol, driving food prices even higher. And this would be true for corn or any other vegetable source of cheapest prices for viagra fuel, as long as it's grown in land that could be used for growing food. Joe Farmer is rightfully looking for profit. He won't plant any food if planting fuel is more rentable.

And also, ethanol is just an injection of fresh air to the already exhausted techno-economical paradigm of oil and the internal combustion engine. By prolonging its agony, we're delaying and obstructing the appearance of better options. Oil will last long enough by itself until we can refine the hydrogen cell, or whatever it is that will replace the current engine.

Brazil has just found *another* huge-ass submarine oil field (33 billion barrels), and Petrobras has surpassed Microsoft in the stock market, becoming the world's sixth largest company by market value. We're not running out of oil so fast that we need lots of ethanol by tomorrow morning.

I wonder if ethanol is really needed at all? Or is it a wrong solution to a non-problem that in the end does more harm than good?
written by jake3988, May 22, 2008
The price of grain is tied to the falling dollar. The U.S. doesn't really export much, but what it does export a lot of is grains and link for you viagra no doctor food.

Because the dollar is so weak, investors and governments overseas seized on the try it indian cialis generic chance to get grain at a cheap looking rate. Because of that surge, demand and thus price has risen.

Almost ALL of the rest of the blame is oil prices rising which is due to the exact same reason (falling dollar and investors) which rises the price of grain further due to shipping it as well as cultivating it.
written by nicster, May 22, 2008
The rising cost of food will accelerate the move from food-stock-based ethanol to wast-stock-based ethanol.

Oil can be used for many things other than fuel. These uses will contribute less to rising CO2 levels.
written by Emma-Jean, May 22, 2008
I'm kind of confused about biofuels right now, because isn't algae twice as effective than any other crops (corn, soybeans, etc.) at making biofuels? So why are people fawning over corn when algae presumably takes up less space and is way more efficient?
Corn Ethanol Is Only Good For Big Agribu
written by Bucky, May 22, 2008
Hank. Mostly great summary. Want to add two thoughts, however.

You rightly point out that corn-based ethanol is made from inedible corn, and then go on to speculate that because of this, it will have zero impact on food prices. However, you fail to understand that because of government ethanol subsidies and market forces, farmers can make more producing ethanol corn than they can growing food crops, so more cultivated farmland is taken out of food production, lowering supply and contributing to increased prices (perhaps not the major cause, however).

Also, your 1:1.3 figure for energy return on energy invested (EROEI)in the production of corn-based ethanol only accounts for the actual conversion of corn to ethanol. When you include the energy costs associated with the growing of the corn itself, the EROEI is 0.5-0.7 (more energy required to produce than is created). On a side note, the EROEI for sugarcane-based ethanol (which is what Brazil uses) is over 8.
written by nicster, May 22, 2008
Ethanol is being produced from corn (and cane, etc.) today because it's easy to do. It's just fermenting and distilling. Technologically very simple (humans have been doing it for centuries), but energenetically costly. The hardware is simple and the organisms (yeast) are ubiquitous.

Algae and other means of soft tab cialis getting to biofuels are more technologically difficult and the hardware and organisms are more difficult to come by. That is changing rapidly.

Hope that helps.
written by EV, May 22, 2008
To add to nicster's comment on corn ethanol. The leftover corn and hops from brewing bear is frequently given to animals as feed. Moonshine has been made from corn before. It is literally a millennial old technology.
Fertilizer Source not Correct
written by Caleb, May 22, 2008
Until recently, I made the same mistake as thinking that artificial fertilizers came from petroleum. However, that is not exactly correct. In order to make the real cialis online fertilizers, nitrogen gas (N2) must be fixed out of the atmosphere into ammonia (NH3), usually using the Haber-Bosch process. This process uses methane (CH4), which makes up 60-70% of natural gas.

Natural gas is normally found along with oil wells that we get our beloved petroleum from, but it is also gotten from its own deposits and other sources (e.g., coal). Think of it as more of a byproduct of petroleum mining, albeit one that has to be highly processed.

Regardless, good article.
written by Joshua Adee, May 22, 2008
Unless I was misinformed by Dan Rather, Brazil is completely energy independent due to its oil and ethanol from sugar cane. It isn't something new. They started in the 70s due to the oil shocks. They actually paid attention.

Regarding food prices, it's basically just that growing middle class all over the world. We can only grow so much food and buy propecia in the uk now more people can afford it. Basically, food is doing pretty much the same thing oil has. People have more money, so they want cars and want to eat meat. The supply hasn't gone up but demand has. It's simple supply and demand. Raise demand but not supply and the prices of oil and food both go up.
written by Pointy-Hatted Geek, May 22, 2008
Insects are the food source of the future!
written by James K.T., May 22, 2008
Crop substitution is a problem. Corn prices go up because of ethanol mandates, farmers grow more corn, less wheat, rice, etc.. Wheat prices go up, rice prices go up, etc..
written by Manu, May 23, 2008
Hey Hank, I read your blog frequently, and usually like what yuo report. But today I think I will have to revisit that...

You said people in India and China are eating more meat than before and this is one of the factors causing record food prices. I don't know about China..but majority of Indians are vegetarians. The increase in consumption of meat isn't so high to merit a rise in food prices. There are other factors.

As pointed by jake3988...a lot of this rise is speculative in nature.
written by CNCMike, May 23, 2008
I learned from the Discovery Science channel that Brazil is supplying something like 45% of its energy needs with ethanol and only using 1% of its farmable land. We need to take a good look at what they are doing.
Clean Air Performance Professionals
written by Charlie Peters, May 23, 2008
What was the cause of death of Alexander Farrell, 46, expert on alternative fuels?

* Was Dr. Russell Long/REAP/Pavley 2002 CA tailpipe bill for corn fuel ethanol, Bill Jones’ Pacific Ethanol business?

* Clean Air Performance Professionals (CAPP) supports a Smog Check inspection & repair audit, gasoline ethanol fuel cap and elimination of dual fuel CAFÉ credit to cut car impact over 50% in 1 year.

* Some folks believe ethanol in gasoline increases oil use and oil profit

* Ethanol uses lots of water

* A Smog Check audit would cut toxic car impact in ½ in 1 year. Chief Sherry Mehl, CA/DCA/BAR, has never found out if what is broken on a Smog Check failed car gets fixed.

* An ethanol waiver would stop a $1 billion California oil refinery welfare program coming from the federal government @ $0.51 per gallon of ethanol used

* About 60,000 barrels per day of the oil used by cars is allowed by the "renewable fuel" CAFE credit
I second Bucky's thoughts, and...
written by George Vaccaro, May 23, 2008
I'd love for you to once in a while either react or revise your articles, or both.

Bucky has pointed out a major flaw in your first premise - which really does invalidate a large part of your point for the article.

Manu also points out another prospective problem - I don't have the stats so I cannot second that point - but I do find it compelling.

Between the two comments, much of the article's content is at least in question.

You do have quite a few readers, and are clearly having an impact on many people's opinions regarding renewable fuels, the environment etc. You have a responsibility to be as accurate as you can. I don't think I can find a clearer example than this.
Let's get educated here - not ALL Indian
written by Tania Rauth, May 23, 2008
Only 40% are strict vegetarians and the remainder are meat-eaters or "less-strict". Meaning that they still consume milk, eggs and cailis canadian farmacy poultry.

Additionally, not all Hindus are vegetarians.

I hope this adds to the validity of your case.

Loved your article by the way.
Do you even know what ethanol is?
written by Bobby Fontaine, May 23, 2008
I’ve been posting the comments below for quite a while now wherever I see it is relevant. I hope it has been having an impact. The thing I want to point out is that if ethanol is added to gasoline at 10 percent causing a ten percent loss in mileage, then it is not burning. So when the government tries to point out that it is good for air quality, you have to ask yourself how pumping millions of gallons of ethanol into the air we breathe is good for the environment. And if it is causing more than ten percent loss in mileage, then it is effecting gasoline so that it also isn’t burning which means it is coming out the tailpipe too.

In Brazil, they use hydrous ethanol in cars that have higher compression ratios, have been fitted with converters, or produced to use ethanol. They use ethanol with a high water content while experiencing no loss of mileage because the engines are made to burn ethanol. We use anhydrous ethanol so it can be added to gasoline. But gasoline and ethanol burn efficiently at different compression ratios so it is a failed policy. But if they let the cat out of the bag about the differences between hydrous and anhydrous ethanol, it won’t take long for good old American ingenuity to figure out that hydrous ethanol can be produced safely, easily cheaply at home which when talking about energy independence, I think that is a little too independent for the government and its political sponsors
Corn based ethanol is a positive gain
written by 4ethanol, May 23, 2008
Why is it absent from articles that ethanol production only takes out the starch from corn? Roughly 35% remaining is protein that goes back into feed stock. At least one ethanol plant utilizes dry frac. to separate the kernel to maintain food grade. We are a starch rich country, I myself am proof of that. As for ecomony, there is no noticeable mileage loss with E10 but as the blend reaches E85 there is 15 to 20 percent. If GM and others would use 2003 technology or that of the 09 Cadillac, we would not have to defend ethanol when discussing mileage. As for Brazil doing it cheaper with sugar cane, cheap labor and no EPA looking over their shoulder paved their way to succeed.
Bust those myths!
written by Nathan, May 23, 2008
I enjoyed your post. It's refreshing to see a "green" blog that actually takes some time to analyze ethanol rather than simply spout the link for you online levitra uk knee-jerk line about it being bad like you see on Grist and other green blogs. Many of the arguments against ethanol are myths that exist out there and you see them in the comments to this post.

For the corn-ethanol industry to expand in this country, it will NOT need additional land. The seed biotech companies have said that there will be a 40 percent increase in crop yields over the next decade. That means that we can fulfill the 15 billion gallon Renewable Fuel Standard while using fewer acres for ethanol production than we use today. In other words: there will be no crop replacement and look there cialis canada generic ethanol doesn't need to lead to any land use change.

As for the return on energy invested like Bucky suggests above. It's amazing how long that piece of misinformation has lasted and how many times it has been shown that ethanol has a positive energy balance. It is NOT, as Bucky suggests, simply the conversion that gives a net energy gain. The GREET model developed by Argonne National Lab, which is widely recognized as the most authoritative in the industry, shows that the entire life cycle analysis of ethanol has a positive energy return. Their analysis includes all upstream and downstream activities from the conversion process.

Corn ethanol is good and keeps getting better. It's also paving the way for cellulosic ethanol which will further the amount of oil we can displace. At $135 per barrel, I would think that is something everyone could support.
Looking forward to the future
written by Anastasia, May 23, 2008
Thank you for having some individual thought! Corn ethanol is certainly not to blame for rising food prices. Of course it has some effect, but it would be disaster to ignore everything else. Population increase, weather, demand for meat... all of these and more have had much greater effects than ethanol.

One really great thing corn ethanol has done is to spur research into "2nd generation" biofuels such as from biomass, waste, and algae. Also being developed are processing methods that use less water and energy. Research takes money, and happily more grants were given in the wake of corn ethanol. If corn ethanol hadn't boomed, we could have waited decades instead of months for breakthroughs in how to turn cellulose into fuel. We have to crawl before we can run.

I just don't understand why otherwise perfectly reasonable people are so willing to use ethanol as the whipping boy.

James M., wheat harvests in the US are bigger than ever, while corn and rice aren't even grown on the same land.
written by leonardo kenji, May 23, 2008
oil and food prices are getting higher due to bubbles, not demand.

demand is increasing, but not that much. people are speculating. wait one year or two and you'll see
in re: speculation
written by John Voorheis, May 23, 2008
I'm not so sure if you can really make the case that speculation is driving up prices any more significantly than the lost opportunity costs from producing corn ethanol are. In a speculative price run-up, you generally see a surplus of commodities that is stockpiled in hopes of getting a higher price. That's not happening though - commodity brokers are keeping less foodstuffs on hand, not more.
Fundamental flaws in this
written by jungle, May 25, 2008
There are huge fundamental flaws in this argument.

Firstly, to say that biofuels are not affecting prices now is NOT the same as saying they never will. If all the world's cars used exclusively biofuel, that would involve burning an enormous proportion of the world's potential food supply. The level of potential demand is insane - and an American citizen can typically afford to pay dramatically more to drive than the average African citizen can afford to pay to eat.

Secondly, the article suggests that because the increases in prices are also for non-biofuel crops, these increases cannot be related to biofuels. Of course they can: if poorer people are priced out of one commodity they will buy another instead, inflating the price of that commodity. Farmers will also of course switch production to biofuels if they are more profitable.

Thirdly, I cannot believe that the 'wealth' of India and China could possibly be the primary cause of all this. For all their rapid growth, these are still poor countries. They still consume vastly less per head than western countries, and a large part of that consumption is still outside the world market - subsistence in India and the remnants of the communist system in China. The 'middle classes' in these countries are not big by comparison to their populations, certainly not anything approaching 'hundreds of millions' of people. Mumbai city centre may be full of impressive skyscrapers; but the slums of Mumbai are truly vast and candian pharmacies viagra full of shacks - and there are plenty of Indian cities without skyscrapers out there.

Finally, the article skates around the fact that most biofuel produces more carbon dioxide than it saves. Once you factor in the carbon impact of destroying rainforests (for Brazilian sugar cane) and even worse draining vast forested peat bogs (for East Asian palm oil) you have a very serious problem, despite these fuels' apparent efficiency rates.
written by James G., May 25, 2008
Interesting discussion. However, every person is stuck unquestioningly in the assumption that internal combustion engines, whatever the fuel, are inevitable. There is a growing technology using compressed air engines which are far lighter and require less maintenance. Since compressed air can be stored indefinitely and transported easily by pipeline or tank, all forms of renewable energy, intermittent or not, can be used for its production. The conversion rate efficiency is high also. Trucks can tow a tank trailer, and hook on a full one when needed: no waiting to fill up. Solar panels can power a small or large compressor, and regenerative braking may be possible. The technology is already developed enough to go into production immediately. Conversion of Gas stations to, er, gas stations, is simple and straightforward. There will come a time soon when the idea of a combustion engine will look silly. Kids of the future will be bewildered at the length of time the human race was addicted to burning liquid fuels. It is not just internal compression that looks poor by comparison, electric and fuel cell vehicles fare poorly as well. Consider the simplicity and economy of compressed air to the cost of batteries or fuel cells, and add in the service life and recycling complexities, and you get a compelling case for more immediate work on air technologies.
written by Joey Gladstone, May 27, 2008
Whatever happened to citing sources? The two links in the article do not seem very credible yet the buying propecia without a prescription author draws many conclusions. A lot of the comments do the same.
I suggest everybody look up the research of Timothy Searchinger, Joseph Fargione, C. Ford Runge and Benjamin Senauer, and Alex Farrell.
Clean Air Performance Professionals
written by Charlie Peters, May 31, 2008
Joey Gladstone ,

Can you share with us Alex Farrell's findings?

How about inflation?
written by Charles, June 02, 2008
You forgot to blame inflation!

When there's an increasing amount of currency in teh world all buying the same finite amount of goods, eventually producers push prices higher since they realize they can make more money.

That's a big trend that's pushing oil, food, and all commodities much higher in price.

As far as ethanol being a whipping boy, that isn't true at all.

It's all supply and demand. When farmers decide to plant corn for ethanol, they are deciding not to plant Soy, Wheat, etc...

If there is less Soy and Wheat being grown (while demand grows) prices move higher. Makes sense, right?

So while ethanol isn't solely to blame for higher food prices, it has certainly contributed.
It's the water, stupid.
written by tussock, June 06, 2008
Water, guys. The problem with ethanol production is water. The problem with growing more rice is water. The problem with growing more wheat is water.

The world is short of grain primarily because of extensive droughts in some major grain exporters. Droughts that we're predicted to get more of thanks to climate change. That'd be what they call a catch 22.
written by mokhtar mannan, July 08, 2008
Bravo for being right on the mark ! Finally, an intelligent "green" voice has defined the cause of rising food price issue exactly on the mark. Add to your reason the fact that corrupt governments never solve the issue of food distribution in their respective countries. On going civil wars are common reasons for starvation..Remember Ethiopia. Global weather changes has destroyed many high yielding crop areas-eg the tramadol for codeine addiction recent floods in Bangladesh, Myanmar etc. High marks for your comments !!
Refreshing logic and research
written by hullflyer, January 21, 2009
Thank you for the reality check. The UN, World Bank and Grocery Mfrs Assn have all gooten big headlines with their assumptions that ethanol demand is tied to corn price and corn cost is pushing food prices. There is zero evidence for it, though. I looked at latest USDA figures and corn is not taking land from anything. It's not a good substitute for wheat or rice, whose prices are rising faster than corn, btw. Corn to gold exchange rates show corn is actually cheaper in real terms than it was 8 years ago. We only export 15% of the corn crop, so it does not feed the world and FIELD CORN DOES NOT MAKE TORTILLAS. Do people realize what a tiny share corn has of the US food dollar? Oil and gas drive much more of our food cost, and the #1 determinant of food cost? Labor. Think minimum wage and the best choice purchase viagra in canada payroll taxes. Farm inputs are less than 20% of overall consumer food cost, and corn is a tiny slice of that. There is less than 8 cents worth of corn in a $5 box of corn flakes. Ethanol is here and now - it's not one of those "we should run everything on wind power" ideas. It's not the end but it's step we need to take. All this dithering over which cure-all we should wait for is one reason we're so late in doing anything at all about oil dependence.
written by Charlie Peters, December 29, 2009
"(Dr.) Jeffrey Williams. Looking at the very distant future, can we make it clearer how much air
pollution is costing people? I can envision cars with a meter on the dash that shows the health
care cost of the tailpipe emissions. The owner can then get repairs to reduce emissions (rather
than hit a cut point). We’re not using all the information we could (from OBD II for example) to
fix the pollution costs of the vehicle. How many miles has the car has driven with check engine
light? There should be a fine for driving with the check engine light on."

Is it time for CHANGE?

Clean Air Performance Professionals
Charlie Peters
(510) 537-1796
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