Nagging Biofuel Issues Linger
A hard look at biofuels:
The spring of 2008 will not be remembered fondly in Haiti. The small, troubled Caribbean island country is again experiencing wrenching civil unrest.
This time the cause is soaring food prices and widespread shortages. In a country where over 80 percent of the population lives in poverty, according to the World Bank, gnawing hunger is a way of life. One widely reported antidote on sale in Haitian markets is the dirt cookie – sun-baked patties of dirt, shortening and salt. These treats offer little nutritional value, but dull the pangs of hunger.
How did we get here?
If you read the U.S. press, much is made of the role of increased biofuels production siphoning maize away from food production and into ethanol plants. In fact, during a recent interview on National Public Radio, World Bank president Robert Zoellick called biofuels a “significant contributor” to global food price escalation.
Biofuels are not the entire cause, of course. Oxford Analytica, an international consulting firm, identifies several factors driving food prices higher including:
- High oil and gas prices make farming more expensive, from fueling tractors to purchasing fertilizer.
- Weather extremes, both droughts and flooding, result in variable crop yields.
- Speculation in the commodity markets creates upward price pressure.
- Increased meat and dairy consumption by rapidly developing economies, such as China, has boosted demand for feed grain.
- Government policies and subsidies divert crops to biofuel production.
One such U.S. policy is the Energy Independence and Security Act of 2007, discussed in our March 2008 column. The law includes a biofuels provision ramping up annual production to 36 billion gallons by 2022.
Biofuels are politically appealing because the farmer is a potent political symbol. In the United States, agriculture policy is defined less by partisanship than by geography. Do you represent a farm state or not?
And the United States is not unique; the European Union routinely wages fierce battles over agriculture policy, with each nation jealously guarding its farmers and their subsidies.
This inherent political support for farming combined with a fuzzy notion of energy independence using a homegrown renewable resource, such as maize, yields a political bonanza that few policy makers can resist.
It also has stimulated the entrepreneurial spirit. The New York Times (April 27, 2008) reports that later this year the E-Fuel Corporation, a Silicon Valley start-up, will begin shipping the “MicroFueler,” an ethanol still for your home. This is not your grandpappy’s still hidden in the woods. Rather, it is a stackable washer-dryer sized unit that produces ethanol from sugar, water and electricity.
Why bother with a gas station?
But for all the excitement about biofuels several nagging issues remain – starting with whether it takes more energy to produce ethanol than the fuel actually delivers.
This was true in the 1970s. But according to the U.S. National Renewable Energy Laboratory, today’s improved farming practices and ethanol production advancements have reduced those energy costs below breakeven. In fact, the lab reports “a 30 percent gain in fuel energy over the fossil energy inputs.”
But the volume of water required for ethanol production is a concern. This water is used both in the distillation process and for cooling – and the Minnesota-based Institute for Agriculture and Trade Policy fears that the dramatic expansion of ethanol facilities, particularly in the American Midwest, could exacerbate existing water supply problems and ultimately limit ethanol production.
Finally, is it a wise choice to burn food as transportation fuel? It is a choice with potentially grim consequences. Do the benefits outweigh the costs?
The National Petroleum Council’s 2007 study, “Facing the Hard Truths About Energy,” recommends increased biofuels production as a diversification strategy for the global energy mix. Even so, under business-as-usual conditions, biomass will only deliver 5 to 10 percent of global energy supply by 2030.
The report highlights the importance of moving beyond maize-based biofuel production to second generation – or advanced – biofuels using cellulosic material. Switchgrass, a hardy prairie grass that can grow on marginally productive land and is drought resistant, is often mentioned as a source of cellulosic material. However, the technology to commercially produce ethanol from such material is still in development.
Government policy is moving in this direction. The Energy Independence and Security Act of 2007 requires that nearly 60 percent of the 36 billion gallons mandated by 2022 be advanced biofuels.
The promise of advanced technologies and a strong political constituency ensure biofuels will remain part of the future global energy mix. But the consequences of our biofuels policy choices are clearly having global impact today.
High food prices, in part due to aggressive ethanol development, have given the developed world a mild case of indigestion.
In the less developed world, these same choices threaten unintentional tragedy.