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April 21, 2008

The Missing Link in the Food vs. Fuel Fight

Ethanol: Fact vs. Myth

Learn the truth about ethanol...

Where is the world’s impassioned plea to OPEC to lower the price of crude oil -- considering their production costs of $2-3 per barrel and record profits?

Instead, we are hearing an impassioned plea to the United States to return to an era of not  investing into energy security technologies and paying farmers not to produce -- while still being responsible for producing the world’s food, feeding the poor and stuck without an alternative to paying $117 per barrel of oil?

It's hard to believe we have a situation of the biofuels tail wagging the oil consuming dog.  This appears to be a public relations sequel to Wag the Dog movie (no intent other than to compare) where a media spin doctor is working to create a situation that will distract the public from the real issue (oil).  Is life imitating art? Is someone trying to convince the public, using media manipulation techniques, that America is really at war with biofuels – and not their addition to oil? The food fight over the price of food should be about the price of oil. The choice is not food vs. fuel it is fuel vs. food.

Here are a few points of context and comparison.

Total energy for a finished 4-oz serving of mashed potatoes was found to range from a low of about 1950 Btu for fresh to a high of 6950 Btu for frozen, with dehydrated models ranging from 2200 Btu for flaked to 5860 Btu for freeze dried. The broad differences between modes suggest a need for inclusion of energy accounting in decision making for food product development, processing, marketing and preparation. – Journal of Food Processing Engineering

For decades the United States has provided direct payments and food deliveries to lesser developed countries to help feed the poor and disadvantaged.  The federal government, with consumer tax dollars, has also subsidized farmers to keep food cheap, and as a result provide cattle ranchers and chicken producers and the rest of world with cheap feed to lower other food products. The federal government saved $6 billion just last year in farm payments because of ethanol production.  For the first time since electricity was brought to the farm in the 1950s, rural America is experiencing an economic renaissance from new demand for their products driven by the increasing demand for their products, a weak dollar, and many other factors. The sad news is that drought in some regions, stock market speculation, poor feed grain inventory planning in other countries, and problems with actual food staples like rice and wheat are also experiencing problems unrelated to biofuels and driving up the price of food -- beyond normal increases. However, if we don’t find alternatives to oil and increase the competition in the transportation fuel market place – things could get worse.

Why Our Food is So Dependent on Oil by Norman Church

"Concentrate on what cannot lie. The evidence..." -- Gil Grissom

Vast amounts of oil and gas are used as raw materials and energy in the manufacture of fertilizers and pesticides, and as cheap and readily available energy at all stages of food production: from planting, irrigation, feeding and harvesting, through to processing, distribution and packaging. In addition, fossil fuels are essential in the construction and the repair of equipment and infrastructure needed to facilitate this industry, including farm machinery, processing facilities, storage, ships, trucks and roads. The industrial food supply system is one of the biggest consumers of fossil fuels and one of the greatest producers of greenhouse gases.

The modern, commercial agricultural miracle that feeds all of us, and much of the rest of the world, is completely dependent on the flow, processing and distribution of oil, and technology is critical to maintaining that flow.

  • Oil refined for gasoline and diesel is critical to run the tractors, combines and other farm vehicles and equipment that plant, spray the herbicides and pesticides, and harvest/transport food and seed
  • Food processors rely on the just-in-time (gasoline-based) delivery of fresh or refrigerated food
  • Food processors rely on the production and delivery of food additives, including vitamins and minerals, emulsifiers, preservatives, coloring agents, etc. Many are oil-based. Delivery is oil-based
  • Food processors rely on the production and delivery of boxes, metal cans, printed paper labels, plastic trays, cellophane for microwave/convenience foods, glass jars, plastic and metal lids with sealing compounds. Many of these are essentially oil-based
  • Delivery of finished food products to distribution centers in refrigerated trucks. Oil-based, daily, just-in-time shipment of food to grocery stores, restaurants, hospitals, schools, etc., all oil-based; customer drives to grocery store to shop for supplies, often several times a week.
  • Oil is required for a lot more than just food, medicine, and transportation. It is also required for nearly every consumer item, water supply pumping, sewage disposal, garbage disposal, street/park maintenance, hospitals and health systems, police, fire services and national defense (the largest consumer of aviation fuel).

As you can see, the price of life is going up.  Additionally, as you are probably already aware, wars are often fought over strategic and limited resources.

What the United States is Thinking:

For many decades, the U.S. has worked with farmers and the scientific community to increase crop yields, reduce the intensity of pesticide and fertilizer use, improve water productivity and promote conservation tillage that reduces erosion and sequesters carbon. Substantial progress continues in all these areas and was not sufficiently addressed. Last year alone our agencies invested more than $1 billion in research, development and demonstration of next-generation-biofuels production from nonfood feedstocks, which remains the core U.S. strategy.  Our government is committed to advancing technological solutions to promote and increase the use of clean, secure, abundant, affordable and domestic alternative solutions.  — Ed Schafer, U.S. Department of Agriculture Secretary, and Samuel W. Bodman, U.S. Department of Energy Secretary April 21, 2008

What Brazil Is Thinking:

"Don't tell me, for the love of God, that food is expensive because of biodiesel. Food is expensive because the world wasn't prepared to see millions of Chinese, Indians, Africans, Brazilians and Latin Americans eat… We want to discuss this not with passion but rationality and not from the European point of view."  President Luiz Inacio Lula da Silva defended Brazil's production of biofuels rejecting criticism that they are furthering a surge in global food prices and harming the environment.

Lula, a former union leader, rebuffed accusations by Jean Ziegler, U.N. special reporter for the right to food. Ziegler this week called biofuels a "crime against humanity," though he referred mainly to U.S. ethanol derived from corn.  The real crime against humanity is to discredit biofuels a priori and condemn food-starved and energy-starved countries to dependence and insecurity," Lula said at a conference of the United Nation's Food and Agriculture Organization in Brasilia.  Some of Brazil's neighbors, led by oil-rich Venezuela, warned this week that biofuels could increase malnutrition in Latin America.  Lula said he was "shocked" that biofuel critics failed to mention the impact that high oil prices had on food production costs, such fertilizers. "It's always easier to hide economic and political interests behind supposed social and environmental interests," he said.

What Your Accountant is Thinking:

In 1949, the price of corn averaged $1.24 per bushel. On Wednesday [April 21, 2008 as of 9:05 a.m. Eastern Time), corn futures were going for $6.13 per bushel on the commodities market. That's an increase of 394 percent in 59 years.

Now compare that to oil.

In 1949, the price of oil averaged $2.54 per barrel. On Wednesday [April 21, 2008 as of 9:05 a.m. Eastern Time), it was going for $113.70 per barrel. That's an increase of 4,376 percent in the same 59 years.
Petroleum products figure prominently in the price of food -- for agricultural production, packaging and transportation. So, in case anyone doubted it, with food inflation, the price of oil is a big fat elephant in the room. Source: Ethanol Promotion and Information Council

What are you thinking?


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