Re: The fallout from our ethanol blunder
- From: Alan Lichtenstein <arl@xxxxxxxxxx>
- Date: Sun, 04 May 2008 14:54:41 -0400
California Poppy wrote:
On May 4, 9:10�am, Sordo <�sordo�@privacy.net�> wrote:
The fallout from our ethanol blunder
By JAMES H. WARNERhttp://www.herald-mail.com
It is a human failing to be susceptible to poor judgment. It is a sign
of maturity to recognize when our judgment has been bad and to correct
it when the evidence presents itself. Congress apparently lacks this
maturity.
Congress mandated the addition of ethanol to gasoline and provided large
subsidies to encourage this. This was supposed to reduce carbon
emissions and reduce dependence on foreign oil. It has not only failed
in its primary objectives, but is contributing to the threat of massive
starvation around the world. Do I exaggerate?
Corn is the primary source of ethanol in the United States. Demand for
corn has driven up the price. This has resulted in substitution, which
is driving up the prices of other commodities.
Overall, grain and soybean prices have gone up 180 percent in the last
two years. Prices are now so high that marginal lands are being cleared
in order to grow crops. The forest or grassland that must be cleared
absorbs far more carbon dioxide than the cropland that would appear in
its place.
Further, carbon dioxide is produced during the production and
transportation of the ethanol. Finally, there is some evidence that the
net energy in a gallon of ethanol is less than the energy that produced
it.
Given that ethanol increases carbon dioxide emissions and gasoline now
sells at $3.70 a gallon, it seems clear that the use of ethanol as fuel
accomplishes neither of the objectives set for it.
But, you may ask, what is the harm? Good question. First, as I write,
millions world wide face are experiencing hunger, and face the
possibility of starvation, because the cost of subsistence has risen
beyond their means.
It is estimated that as many as 1 billion people subsist on as little as
$1 a day. Most of these are at risk of undernourishment and some of
these risk starvation. There is unrest, and occasional food riots in
countries as widely separated as Haiti, Yemen, Peru, Ivory Coast,
Cameroon, Egypt and India. Several governments have placed restrictions
on the export of staples in order to assure that there is a sufficient
supply for their own population.
This is happening at a time when the world's stock of basic food stocks
is under an ominous threat. A strain of black wheat stem rust, first
found in Uganda in 1999, has traveled faster than expected, to Western
Iran.
By next year it could be in Pakistan and India. It is able to defeat the
rust resistant genes in almost all varieties of wheat. It will be
several years before a new variety of resistant wheat can be grown in
sufficient quantity to replenish the reserves that are currently
threatened. If this happens after corn reserves have been used for
ethanol, the number of hungry and starving people will be much larger
than it is at present.
A second harm, but one which may be of equal importance, is the harm
done by intensive cultivation. Think of the law of diminishing returns.
In a free market, farmers would use chemicals to reach the optimum level
of production.
The use of more chemicals, beyond this point, would cost more than it
would produce, so they stop here. However, agricultural subsidies,
whatever the method, almost always cover the variable cost to the
farmer, that is, it will pay for the extra chemicals to reach maximum
production.
For a slight increase in output, there is a much greater input of
chemicals. The excess chemicals are washed away and a large quantity
reaches the sea. Some biologists fear that in the near future these
chemicals will increase the dead zone in the Gulf of Mexico in which
little, if any, life can be found.
The irony is that we are sitting on an ocean of oil. If Congress,
instead of burning food for motorfuel, would allow the exploitation of
our own natural resources, the price of gasoline could be brought down
to $1.50 per gallon.
This would strengthen the dollar, strengthen the U.S. economy and would
bring down the price of food worldwide. A refusal to act, on the other
hand, could trigger angry motorists to bring on another tsunami of
public opinion such as the one that killed the immigration reform bill
last year. For members of Congress, this is a point to consider.
James H. Warner of Rohrersville is a retired attorney and former
domestic policy adviser to President Ronald Reagan.
There is a front page article in the Oakland Tribune about Brazil's
ethanol which is primarily made from sugar cane. They are quite
willing to sell it to the US except we put such a high tariff on it,
it rmeains unprofitable to import it. I don't agree that the US use
of corn as created the world food price increase. That is due to many
reasons and not just the US corn crop which is subsidized by our
demand for ethanol.
You're right that several variables contributed to the rise in food prices. However, you cannot discount the rise in flour prices in our country due to farmers planting corn rather than wheat. Obviously, this had a ripple effect on the wheat we export. The rice shortage also contributes to the rise in prices.
Brazil has so much ethanol that Ford has produced a car which sells in Brazil( and is its best seller, and one of the few things that makes a profit for Ford ), that runs on 100% ethanol. I'm not a supporter of tariffs, but their existence serves us in good stead in negotiating trade treaties, in particular, with South America. Unfortunately, the Bush Administrating isn't using that bargaining chip to negotiate free trade treaties which address the problems of free trade as they apply to our country. I don't think any of the present contenders will do much better.
.
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