July 5, 2008

The corn-fueled economy and the corn-fueled candidate [Karl]

The Guardian claims to have a confidential World Bank report which concludes that biofuels have forced global food prices up by 75% — more than the IMF estimate of 20-30%, and far more than the US government’s claims that biofuels contribute less than 3% to food-price rises. The Guardian and the New York Times suggest the World Bank report is being held back to avoid conflict with the US, though bank chief Robert Zoellick has been vocal about the problem.

The Guardian’s reporting on this is fairly shoddy, throwing around percentages without a time frame.  Nevertheless, it is fairly clear that if biofuels moderate energy prices, they tend to have the opposite effect on food prices.  Thus, you have groups like ActionAid calling on the G8 leaders to support a five-year moratorium on biofuel expansion and an end to subsidies and targets aimed at increasing the use of ethanol and biodiesel in the US and European Union.

As previously noted here, Barack Obama has many ties to the domestic ethanol racket and has backed extending subsideies for corn ethanol and tariffs on more efficient sugar cane ethanol.  These are precisely the sorts of policies that ActionAid predicts could cause an additional 850 million people to go hungry by 2009. 

This seems to be one of those are issues on which there seems to be no sign of an Obama flip-flop on the horizon.  Yesterday, the New York Times editorial board was decrying Obama’s current positions on public-financing limits for the general election, the terrorist surveillance program, funding faith-based groups, the death penalty and gun control.  The NYT has also gone on record as concerned with the way Congressional backing of corn ethanol has driven food prices and may contribute to global warming.  Perhaps the paper — or someone else in the media — will ask Obama sometime whether his domestic ethanol ties (or the votes of Iowa farmers) are more important than the poor starving people of Africa.

(h/t Memeorandum.)

Update: Insta-lanche!

Posted by Karl @ 8:00am

Comments (46)

  1. Ya know, when I think of the introduction of new technology that will radically alter how we heat, drive, and keep the lights on…

    It looks nothing like this.

  2. Americans using corn to fuel their cars is like, I dunno, the IRA using potatoes to make TNT.

  3. Just keep this hidden until the Ascendancy. Then all will be well.

  4. Comment by Jeff G. on 7/5 @ 8:36 am #

    Just keep this hidden until the Ascendancy. Then all will be well.

    And if all isn’t well, the fall back position of “blame it on George Bush” can be implemented.

  5. Wait, so converging 40% of our nation’s corn crop into faux-gasoline has an effect on the food supply?

    WHO KNEW???!?!?!

  6. Barry and the Don’t Drill Dems … America’s Loudest Band

    From their album Smell The Boot

    1. U’a fool for oil
    2. Give up the lawn
    3. Nasty McBu$h
    4. Never a nuke
    5. Clingin to religion
    6. Guns? Who needs ’em [I say]
    7. Makin’ you care

  7. Pingback: Starving for Biofuels | The Sundries Shack

  8. This, the rising oil prices, self-inflicted environmentalist policies, and the weak dollar are all pointing to a worldwide economic problem, if not disaster in the foreseeable future, should things not change soon. An Obama presidency and increased Democratic congress will almost certainly tip things over the edge.

  9. it is fairly clear that if biofuels moderate energy prices

    That’s not even an if. They don’t. Higher total cost, displaced onto non-participants in their “market” — that’s how government works. (Incorporated businesses are outposts of government, not businesses.)

    …more important than the poor starving people of Africa.

    By some crazy coincidence, environmentally justified market distortions beloved by Whitey tend to have the “unintended consequence” of killing a bunch of black people.

    Crazy, I say!

  10. Time to dig up Rachel Carson!

  11. Yes the consequences of the ‘billion mercury light bulbs in America’ voter; when you demand stupid ideas light the way you’ll end up looking foolish.

    Not for nothing however it’s not just O! when there is McCain, Schwarzennegger, Crist, Jeb Bush and every other David Brooks Centrist idiots with ‘moderate-independent’ energy and economic plans.

    Frankly, there a plenty of Americans willfully screwing themselves supporting idiotic dem mercury bulb ideas that it cannot be said ‘the other guy is worse’.

  12. – It will all resolve itself someday soon when the electorate have had enough of the partisan bullshit, and it won’t be as if the players weren’t warned.

    – The worst part is that the players club will just go back to business as usual, after sitting there the past year laughing at the Keystone cop administration, prez candidates, and Congress as the bucks rolled in, but at least the weasel politicians are going to feel it when the train goes over the cliff.

    – The “gang of twelve”, this time for the oil mess, will be hailed as hero’s, but a lot of others are going to have some answering to do, including
    Buah, Obama and McCain. If I and others can plainly see the situation for what it is, as well as the solution, I know damn well their advisor’s can. I hope they all pay dearly for this mess, because it was all totally unnecessary.

  13. Corn-fueled candidate? More like the shit-filled candidate.

  14. I fought the law (of supply and demand) and the law won…

  15. According to a June 24 article in the St. Petersburg Times, Jim Smith, president of the Florida Petroleum Marketers Association said without biofuels, a barrel of gasoline would cost $21 more than it does today. 25% of the corn crop fed the ethanol market and that drove up the price of corn by 25%. A blend of 90% gasoline and 10% ethanol will lower gags mileage by about 3%. A mix of 15% gasoline and 85% ethanol called E85 could reduce mileage by 25% to 30% and requires a special engine.

    Tied as farmers are to oil prices, they must continue to receive high prices for their crops, or they will go broke. Farms cannot exist with $2.00 a bushel corn they got several years ago. Each time a farmer fills a tractor tank with fuel he/she spends about a thousand dollars.

    We are caught in a trap, and for the short term, there is no way out. Wait until next fall when natural gas becomes too costly for poor families. Until we develop alternative fuels and nuclear energy which will reduce our dependence on foreign oil, we ought to drill and drill, even if it means an oil derrick on the White House lawn.

  16. we ought to drill and drill, even if it means an oil derrick on the White House lawn.

    And after that what we should do is drill. The oil is just sitting there. That doesn’t help M’chelle’s children not at all no not one bit.

  17. 4. Never a nuke

    Slight point of order: Obama has been somewhat positive about nuclear power.

    Illinois has more nukes than any other state, I believe, and Exelon has donated tons-o-cash to his campaign.

    Of course, he doesn’t stress this because it would anger his Luddite base.

  18. Anger his Luddite base?


    James Lileks at Tim Blair’s blog:

    I swear, you try to talk about nuclear energy with these people, and they look at you like someone who painted himself red, glued horns on his head, strapped on a three-headed phallus and walked naked into St. Peter’s in Rome shouting “WHO’S YOUR DADDY?”

  19. Spiny Norman, you can experience that on any given weekend in San Francisco.

  20. As performed by their Mayor.

  21. SBP,

    A little late for me to re-dig the links, but I could show you that Obama’s opinions of nukes change, depending on whether he’s campaigning in Nevada or in front of our nation’s governors.

    But you are right about the Exelon cash — I believe the NYT even did a piece on it.

  22. Ethanol promotion, along with pork-laden farm bills, are just an easy way to logroll votes from farm-staters.

  23. When you start putting food in your gas tank you don’t have an energy problem you have a priority problem. The reason we are using biojunk is because we won’t let in Brazilian sugarcane ethanol–8x more productive-and we have refused to develop our own oil resources. While we are hugging trees we have driven both fuel and food prices to a point where we are on the brink of a calamity in the third world, not to mention in our own country.

    Our stupidity appears to know no bounds.

  24. typical echo chamber in here I see. I guess you’re all going to be sending a nice donation to the “International Benevolent Organization of American non sweet pig-feed corn shippers to save Poor African Children” yeah those poor kids are starving because the price of corn went up a little – whatever you say guys.

    Here’s an idea – take away ethanol subsidies and thus lower the demand for and thus price of corn and then farmers will just continue to grow it at a personal loss (cause they’re good like that) – but wait, theres more – they’ll also pay for corn shipments to Africa out of the personal goodness of their hearts – cause they aren’t about money or anything. And they’re probably all Billionaires from those ethanol subsidies.

    Lets just oxygenate our gasoline with lead – hey it was good enough for gramps!

  25. There is $140+ dollar a barrel gas, massive flooding in the US bread basket, a drought in Australia, a dictator driven famine in Zimbawe. It’s all caused by ethonal, umm, sure it is.

  26. Re: #25
    Why yes, actually it is. The massive production of ethanol from food crops took has soaked up more than the elasticity in the supply. Thus when there is massive flooding in the Midwestor draught in Australia there is no excess supply to cover the shortfall. Consequence: supply decreases rapidly, prices rise rapidly.

    It is absolute insanity to be using food as feedstock for transportation fuel. But there is a very fine line between insanity and politics; in our case we have well and truly crossed it.

  27. Since the third worlders are not maximizing production of oil, why should we maximize production of food? Just a few years ago they were complaining about our agricultural subsidies.

  28. #24
    Except that it takes as much energy to make a gallon of ethanol from corn as it gives. It’s much more efficient to grow corn as food and use something less necessary as feedstock.

  29. Pingback: pettyfoggery » Blog Archive » Obama’s Pocket Lint

  30. Pingback: Ethanol Subsidies Starve the Poor | OpenMarket.org

  31. I know that is conventional wisdom that ethanol takes food from people and cattle. Yes, it would be better if garbage waste or switchgrass were used (http://www.trollhattansaab.net/archives/2008/01/gm-invests-in-experimental-waste-to-ethanol-process.html) but that is a process that is not now available. What is missed by the conventional wisdom view is that the protein rich corn residue from alcohol production is apparently not being widely used as feedstock as it could be (http://www.npr.org/templates/story/story.php?storyId=87782087). Had we started an early rational production of alcohol for ethanol and the needed realignment of our animal feed process/transportation system this would have been minimized. Such changes take time. But as usual with a rush of government interference, in this case the subsidizing of ethanol production, after ignoring the potential for fuel disruptions for over 30 years, is that the corn field to animal feed lot process is broken and farmers redirect their energies towards growing the new cash crop, corn. Corn residue could be used for human nourishment as well, but I doubt that will be done.

    Also since our genetically mutated (GM) corn is not acceptable for human consumption in the EU and most of Africa, the starvation from corn being used as fuel is a bit of a strawman.

  32. Oh. 100% all natural is way more better. For you and for them.

  33. Pingback: Lefty blogs got no lovin’ for AP’s Loven [Karl]

  34. #32
    It takes one unit of energy to produce one unit of ethanol from corn. 1 in 1 out. The whole scheme is a wash. Corn is not the answer. Sugar beets? maybe, but the most efficient crop so far is sugarcane at about 7 to 1. 7 units of ethanol for every unit of energy spent. I don’t have any figures, but I suspect that the economic break even point is 3 or 4 to one. After that the system starts paying for itself.

  35. My understanding is that because of the demand (artificial or not) for corn ethanol, our production of corn has increased tremendously.

    I’m not unenthusiastic about corn-based ethanol because it’s made out of “food”–after all, we can grow more corn, and that’s just what we did. I’m unenthusiastic about it because it seems less efficient than other types of biofuels, and we have to let the market figure out which ones will work. In the meantime:

    –all our vehicles should be flex-fuel, so we aren’t locked in to any particular type of fuel (we can do this at $100 a car);
    — we need to lift the tariff on Brazilian sugar ethanol;
    — we need to lift the military’s prohibition on gasoline made out of shale oil;
    — we need to keep looking at ALL our options for biofuels, including algae-based ones;
    — we need to start building nuclear power plants, stat;
    — we need to develop our domestic shale-oil reserves in Wyoming, Utah, and Colorado;
    — we need to drill off the the coasts, and in the Gulf;
    — we need to drill in ANWR. LIke, starting yesterday.

  36. But Little Miss Attila, all of those things are things we can do starting today. You can’t just be proposing change all willy-nilly. The keyword in any serious discussion of energy policy is “next-generation.” You’re jumping the gun here.

  37. we can grow more corn

    Up to a point, yes. But have you seen the charts indicating how much arable land would have to be given over to growing corn, before our ethanol production would overtake our petroleum consumption?

    The answer: More than there is. Not more than is currently in production. Not more than we have. More than there is.

  38. The next-generation corn will be more better. You’ll see. You’ll all see.

  39. New! Improved! 40% more HOPE! 80% more CHANGE!

  40. Water resources limit corn production, and don’t imagine corn only affects direct human consumption. Corn is a component of livestock resources to, and just watch the price of milk(for example) go through the roof.

  41. Oops, here’s an “o”, use where needed.

  42. We can’t have our economy held hostage to greedy gluttonous cows I don’t think. Let them forage if they’re hungry. The free ride is over. Chuck Grassley has my back on this.

  43. You ever see those commercials about happy California cows?

    Well, what the dairy farmers here in central California do is chop corn up, bulldoze it into giant piles, cover with a tarp, and leave to to start fermenting. It’s the equivalent of bovine Jello shots.

    The commercials are all true.

  44. Pingback: Tennesseefree.com » 100 Million people starving: Al Gore’s Biofuel boom forces global food prices up 75%

  45. “…ask Obama sometime whether his domestic ethanol ties (or the votes of Iowa farmers) are more important than the poor starving people of Africa”

    If you phrase the question a little more honestly, you’ll see that any politician would have to say yes, at least in their dirty little hearts: are the votes of farmers in Iowa more important to a man running for President of the United States than the non-existent votes of poor starving people in Africa?

    In a way, the answer to that should be absolutely yes. For better or worse, would you rather American politicians pander to Americans or to people in other countries?

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