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  • From: "TradingPostPaul" <tradingpost@riseup.net>
  • To: livingontheland@lists.ibiblio.org
  • Subject: [Livingontheland] MAIZE OF DECEPTION
  • Date: Thu, 05 Jul 2007 10:55:11 -0600


MAIZE OF DECEPTION
http://www.precaution.org/lib/07/prn_dhn070628.htm
[Rachel's introduction: Ethanol fuels are not necessarily the universal
cure.]

By Eliana Monteforte, COHA Research Associate

As the Bush administration continues to push its alternative fuels agenda,
it has become increasingly evident that corn-based ethanol could be as much
the global villain as a boon to society. Instead of improving the
environment and moderating oil prices, corn-based ethanol could result in
mass deforestation, strained land and water resources, increased food
prices, augmented poverty and swarms of farmers uprooted from the land.
While the negative effects of corn- based biofuels are obvious, Washington
continues to emphasize their importance, while increasing the size and
number of subventions to the ethanol industry. This is being done despite
the adverse ramifications that its cultivation is having on the sites where
it already is being produced, with the situation likely to further
deteriorate in the near future.

The Emergence of Ethanol

Ethanol is a substance created by the fermentation of simple sugars. In the
United States, corn is the main source for ethanol production, while other
countries like Brazil rely on a sugar cane process as well as other plants
and byproducts to be used in making alternative energy sources. Typically,
ethanol is mixed into gasoline creating "gasohol," resulting in higher
octane ratings, improved combustion, and is viewed as more environmentally
friendly. Currently, around 30% of gasoline in the United States contains
some ethanol, and US initiatives indicate the possibility for much larger
concentrations in coming years.

Before corn-based ethanol became prominent in US industries, lead was used
as a performance enhancer when added to gasoline. It was not until the
1970s and 1980s that corn-based ethanol began to replace lead -- a very
toxic substance -- mostly due to the oil embargo that the Oil and Petroleum
Exporting Countries (OPEC) imposed in 1974. Amid the clamor of American
voices calling out for energy independence, President Jimmy Carter gave his
memorable speech on April 18, 1977, ushering in a new era in US economic
history. From this point on the US would try to cater to its high energy
demand from its own domestic resources. To Carter, this decision was the
"moral equivalent of war" between the US and OPEC. Thirty years later, it
seems that America is losing its own self-designated "war" and is likely to
continue to suffer unnecessary losses in this conflict unless it pursues a
fundamental change in its economic policy.

An Economic Giant

Over the past few years, a combination of increasing oil prices and
generous government subsidies has resulted in the continued expansion of
the US ethanol industry. According to the Council on Foreign Relations, as
of 2006, 110 ethanol refineries have been built in the US, with 73 more
under construction. It is estimated that by the end of 2008, ethanol
production will have reached 11.4 billion gallons a year. In his 2007 State
of the Union address, President George W. Bush set out goals to produce
over 35 billion gallons of ethanol fuel by the year 2017. He added that the
US also plans to cut petroleum consumption by 20% over a ten year time
span.

The tumultuous ethanol industry receives Midas-like support as a result of
direct government subventions which equaled about $8.9 billion in 2005.
These include tax cuts, grants, and government loans in order to encourage
production and remain economically competitive with conventional gasoline.
The federal government for example already has established a tax credit of
51 cents for every gallon the industry produces. Although accompanied by
severe consequences, with continued government support at such a high
level, it is quite possible that Bush's consumption goals could be
fulfilled within the stipulated time period.

Feeding Cars and Starving the Poor

On March 29, 2007, Cuban leader Fidel Castro berated Bush's economic
initiatives for ethanol production in the Cuban Communist party newspaper
Granma, stating that using corn, or any food source, to produce ethanol
could result in the "premature death" of upwards of three billion people.
He explained that the drive to produce corn- based ethanol would hike up
food prices around the world, adversely effecting poverty in developing
countries. Castro then restated his beliefs in a second article, also
published in Granma, on April 3. Although the ailing Cuban president is
known for adamantly and automatically opposing US foreign policy
initiatives, it would be foolhardy for the US to ignore his foreboding
message on this subject.

As a result of the Washington-backed initiatives, an enormous volume of
corn is being consumed for ethanol production. Consequently, the decreasing
availability of it as a food crop and for livestock has contributed to the
rise of corn futures from $2.80 to $4.38 a bushel. This recent price hike
occurred over the course of several months and is said to be the sharpest
increase in the past ten years. Thus, fewer low income consumers are able
to purchase corn-based products, which is a very serious detriment to
countries where corn is a staple of a population's diet.

Mexico already has been significantly affected by the rising costs of corn.
Because 107 million Mexicans rely on corn as their main source of
sustenance, its soaring increase has sent shockwaves throughout the
country's corn-related industries. The price of tortillas in Mexico has
risen by 100%, resulting in mass protests by tens of thousands of enraged
consumers last January. Recently inaugurated Mexican President Felipe
Calderon stated that the price increase of corn is unjustifiable and
"threatens the economy and millions of families." In response to the
strike, Calderon signed an accord that limited the price of tortillas to
8.50 pesos per kilogram, and increased the quota of duty-free corn products
imported from the United States. Despite Calderon's efforts to regulate
corn prices, the situation remains unresolved, since the accord expired in
May.

The rapidly changing international corn market also has affected the prices
of other produce. Due to the high demand for corn, farmers in the US are
now planting more acres of the commodity. This has decreased the production
of other crops, such as wheat, soy and rice, making them more expensive and
less available. Beer prices also have risen due to the substitution of
barley for corn. Even the price of meats and poultry such as turkey,
chicken, pork, beef as well as eggs and dairy products are beginning
increase due to the high cost of feeding farm animals. Fidel Castro may
have a point; current US economic policy seems to indicate greater interest
in fueling cars than feeding people.

Is Ethanol Really Better For The Environment?

In May of 2007, the United Nations issued a report warning the world
against the production of ethanol. The report stated that thus far, the
production of ethanol has resulted in "the destruction of endangered
rainforests, contamination of soil, air and water and the expulsion of
rural populations from their homes." Because more acreage needs to be
cultivated in order to produce the amount of corn, sugarcane and other
foodstock needed for ethanol production, farmers around the world are
wantonly cutting down forests to make way for new plantations. In the long
term, the Amazon Rainforest, for example, will experience vast
deforestation due to Brazil's increased sugarcane production in order to
meet its ethanol export goals. This inevitably will result in the slow
degradation of one of the Americas most precious and fragile ecosystems.

The UN also added that "where crops are grown for energy purposes, the use
of large scale cropping could lead to significant biodiversity loss, soil
erosion, and nutrient leaching." Fidel Castro warned the US that corn-based
ethanol production will not only damage the environment, but will also put
increasing pressure on the world's already dwindling water supplies,
possibly resulting in future water wars.

In a COHA interview with Boston University's International Relations
professor Kevin P. Gallagher, he asserted that we have found ourselves in a
"climate constrained insecure world," where we must shift our dependence
away from fossil fuels and have a more climate friendly energy policy.
Moreover, Gallagher stresses that "corn-based ethanol is not a panacea to
solve a country's climate and security problems." He emphasized that
currently the US has the opportunity to develop a more efficient energy
path, but with its present, poorly managed corn- based energy policy, the
US is "taking one step forward and two steps backward."

Gallagher also pointed out that the corn, wheat and soy sectors are highly
concentrated, meaning that at times "only two or three firms can control
75% to 85% of the market." This raises possible concerns that these firms
are manipulating the price of their products, thereby artificially
impacting the commodity market to their advantage, but not necessarily to
society's benefit. Because these mega-firms face so little competition, it
is relatively easy for them to drive up the price of their products in
order to generate greater profits. At the present time, corn-based ethanol
production is benefiting mainly the larger firms.

In Mexico there are only a relatively small handful of tortilla makers
whose prices, as mentioned above, have rapidly shot up. Yet it is very
important to note that these tortilla prices increased somewhat faster than
the price of corn in general. While the situation in Mexico is currently
under investigation, its present fate illustrates the importance of rapidly
addressing this issue.

It is evident that while ethanol, as an alternative to fossil fuel, may be
beneficial to the general population by reducing and stabilizing fuel
prices, its consequences may far outweigh such advantages. As Food Rights
Coordinator Celso Marcatto at ActionAid in Brazil stated, "The benefits of
biofuels cannot be achieved at the expenses of increased food shortages,
environmental degradation and poverty." Unfortunately, that is what the US
is inadvertently setting itself up for in the future.

Alternatives To Corn-Based Ethanol

The US currently uses more energy per unit of GDP than do most other
countries in the world. Yet there are many ways the US could utilize its
energy more efficiently. For example, steel mills in the US use more energy
per dollar than their equivalent in Germany or Japan. The Japanese car
company Toyota is currently using its hybrid technology to manufacture more
fuel efficient cars. Germany uses energy efficient light bulbs from which
it derives huge savings. The US needs to use the eco-technology which now
exists to mirror these countries by adapting them to its own use.

Wind and solar energy, a function of geography, should be a key component
in the US's quest for energy efficiency. Professor Gallagher suggests that
former President Carter's energy policy had the US "perfectly positioned
to, by now, be the world leader." Yet because the succeeding
administrations strayed away from Carter's path, the US is now far behind.
"We have engineers and ingenuity but the current administration has locked
itself into a specific framework and is resistant to change," says
Gallagher. The US still has time to alter its course toward a more energy
efficient arrangement. Hopefully, the White House will acknowledge its
current unwise economic policy and join other governments that value the
use of eco-friendly energy.

==============

COHA, The Council on Hemispheric Affairs, founded in 1975, is an
independent, non-profit, non-partisan, tax-exempt research and information
organization. It has been described on the Senate floor as being "one of
the nation's most respected bodies of scholars and policy makers." For more
information, visit www.coha.org; or email coha@coha.org






  • [Livingontheland] MAIZE OF DECEPTION, TradingPostPaul, 07/05/2007

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