I'm the first to admit that the current round of 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 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 market, but I'm tired of hearing about the supposed evils of 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 Wall Street Journal and Vinod Khosla

written by Julian, May 22, 2008
However, if ethanol continues to be advertised as the 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 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
Because the dollar is so weak, investors and governments overseas seized on the 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
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
written by Bucky, May 22, 2008
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 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
written by Caleb, May 22, 2008
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
Regarding food prices, it's basically just that growing middle class all over the world. We can only grow so much food and 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 James K.T., May 23, 2008
written by Manu, May 23, 2008
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
written by Charlie Peters, May 23, 2008
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/04/18/BAOK1087DP.DTL
* 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
written by George Vaccaro, May 23, 2008
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.
written by Tania Rauth, May 23, 2008
Additionally, not all Hindus are vegetarians.
I hope this adds to the validity of your case.
Loved your article by the way.
written by Bobby Fontaine, May 23, 2008
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
written by 4ethanol, May 23, 2008
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 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 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.
written by Anastasia, May 23, 2008
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
demand is increasing, but not that much. people are speculating. wait one year or two and you'll see
written by John Voorheis, May 23, 2008
written by jungle, May 25, 2008
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 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
written by Joey Gladstone, May 28, 2008
I suggest everybody look up the research of Timothy Searchinger, Joseph Fargione, C. Ford Runge and Benjamin Senauer, and Alex Farrell.
written by Charlie Peters, May 31, 2008
Can you share with us Alex Farrell's findings?
written by Charles, June 02, 2008
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.
written by tussock, June 06, 2008
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
written by hullflyer, January 21, 2009
written by Charlie Peters, December 29, 2009
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."
http://www.aqmd.gov/TAO/ConferencesWorkshops/SmogCheckForum/SmogCheckSummary.pdf
Is it time for CHANGE?
Clean Air Performance Professionals
Charlie Peters
(510) 537-1796
This e-mail address is being protected from spambots. You need JavaScript enabled to view it
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The avg increase is slowing, but they are still expecting the world population to reach over 9 billion by 2048.