Comments Ron Steenblik has made

Word

What I meant to write was "But all any of us who dare say anything positive about international trade GET is shit."

These are only my personal opinions.

John (Amazing Dr. X)

You make many good comments on Gristmill, but this one is insulting and inane.

We have a serious problem, corporatists who pretend to be environmentalists.
They are mutually exclusive states of being. It seems certain individuals, craving the career status that comes from promoting and justifying "free" trade, will never see that.

The underlying assumption of their world view is that corporate power rules and governments are basically just figureheads for the expression of that power. They labor under the self delusion and mass delusion that this is a self fulfilling prophesy.

Some of us here are trying to be helpful -- to explain how international institutions work -- and all you do is snipe from the sidelines and attribute nefarious motives.

Thanks a lot.

These are only my personal opinions.

As usual, ditto to what Jason says ...

Jason points out something important: short of dictating where people live and what they buy, either we accept the movement of goods, or we accept the movement of people towards those goods.

If, for the sake of argument, Americans were forced to become localvores, the United States might see a massive relocation of people towards the more agriculturally fruitful parts of the country. And if any of you are worried about urban encroachment on good, arable land, then you ain't seen nothing yet.

That raises a related issue: many people who are skeptical of trade get much more agitated over inter-national than intra-national commerce, even though the energy and CO2 costs of transporting a particular good over land within a country (or customs union, like the EU) may be greater than transporting that good from a nearby country, or one accessible by efficient sea lanes.

These are only my personal opinions.

%#$@! lack of an editing function

What I meant to say was "Similar bilateral FTAs, such as between Australia and NZ, have been relatively uncontroversial."

These are only my personal opinions.

You are referring to NAFTA, Wiscidea

Which is a regional trade agreement (RTA), not a multilateral trade agreement, like the WTO.

One important difference between RTAs and the WTO Agreements is that RTAs hardly ever attempt to discipline subsidies. The reason they do not is that, unlike tariffs, which can be lowered preferentially for your RTA partner(s), subsidies cannot be reduced preferentially. Eliminate your production subsidies as a favor to another country, and you eliminate the subsidies for all your trading partners.

So in the case of NAFTA and corn, tariffs were lowered but subsidies were not. In that kind of situation, the country with deeper pockets invariably "wins".

Nobody here claimed that all trade agreements are perfect.

These are only my personal opinions.

No, Vakibs

Further, as long as biofuels are not being imported, they will remain purely American and leave no footprint elsewhere in the world.

The issue of displacement has been hashed and rehashed on Gristmill for months if not years. It is the central premise of Tim Searchinger et al.'s (2008) analysis of the net GHG effects of devoting arable land to the production of biofuels.

You mentioned that "animal feed is being imported from other countries". Why do you think that is so? In part it is so because more and more grains (feedwheat, barley, oats) that would have otherwise gone into the production of animal feed are being displaced by corn and now have to be produced in other countries.

In 2007, U.S. farmers expanded their corn acreage by 19.5%, mainly at the expense of soybeans. Some of that reduced U.S. soybean production was displaced to formerly forested land in Latin America.

We live in an integrated world. We cannot expect that a massively inefficient import substitution policy will not have knock-on effects elsewhere.

These are only my personal opinions.

Moyesii

Even the European Commission has been frustrated with the German approach, which has been to automatically reduce the MRL to zero, simply because no local company has come along to defend it. That difference in practice from other EU countries was one of the reasons why the European Commission decided a few years ago to standardize procedures relating to the registration and re-registration of pesticides, and the setting of MRLs.

I wrote a case study on the tea case, among others. (See starting at page 67, here.) It was not "a matter of the type or class of pesticide found on the tea rather than the quantity." As I thought I made clear, we are talking about the exact same pesticide: Tetradifon (1,2,4-trichloro-5-(4-chlorophenyl)-sulfonyl benzene). The German authorities set a MRL of 0.500 mg/kg for bell peppers (paprikas), tomatoes and citrus fruit, but left it 0.050 mg/kg for all other crops and crop products -- i.e., including tea. As the tea producers pointed out, this discrimination did not make sense, as more of the pesticide was likely to be consumed eating peppers and tomatoes than through drinking tea, as most of the pesticide in tea stays in the leaf, which is discarded after the tea is steeped.

This was not a case necessarily of an environmental measure being used for trade protection (Germany is not a tea producer), but it does show that some environmental policies can be implemented in a ham-handed way that creates unnecessary barriers to trade. Hence the foresight of the drafters of GATT Article XX in including the proviso, "Subject to the requirement that such measures are not applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination between countries where the same conditions prevail, or a disguised restriction on international trade, ... "

By the way, you accuse Jason of not having "substantiated your thesis that the WTO contributes to sustainable agriculture", but I cannot see that you have substantiated your antitheses. As I have written, promoting sustainable agriculture is not a mission that has been given to the WTO, nor should it be. That is the job of the FAO and other bodies. But, indirectly, the rules it has set (such as the provisions in the "Green Box" of its Agreement on Agriculture) have given countries wide latitude to promote sustainable agriculture, including organic agriculture.

These are only my personal opinions.

Jon: re-read Jonas' posts

I think he is making your point.

However, in answer to your concluding remark:

... there has to be a way, particularly as the price of oil increases, of planning for the day -- as the Cubans did -- when it will be necessary to grow most food locally.

One of the most important ways of doing that is to ensure that the resource base -- the soils and local agricultural know-how -- is not destroyed. (See other articles in Grist on, for example, the readiness of some politicians to allow land enrolled in the Conservation Reserve Program to be plowed up for the purpose of growing crops for biofuels.)

But instead of paying to improve the soil (or at least let it rest), and to keep up research, most governments continue to spend most of their farm budgets simply boosting farm income, especially the income of the richest quartile of farmers.

These are only my personal opinions.

I'm depressed

This press release just arrived in my e-mail in-box:

EPA Denies the RFS Waiver Request

On August 7, 2008, U.S. Environmental Protection Agency (EPA) Administrator Stephen L. Johnson announced that EPA would deny a request submitted by the State of Texas to reduce the nationwide Renewable Fuels Standard (RFS).

Working with the Departments of Energy and Agriculture, EPA considered more than 15,000 public comments and determined that the RFS is not causing "severe harm" to the economy. This means that the total volume of renewable fuels mandated by law to be blended into the fuel supply will remain at 9 billion gallons in 2008 and 11.1 billion gallons in 2009.

Jetta Wong, EESI's [Environmental and Energy Study Institute's] Senior Policy Associate for the Sustainable Biomass and Energy Program, said this about EPA's decision, "EESI is glad to see that EPA denied the waiver. It is reassuring that EPA's analysis confirmed what many universities and experts have been staying, which is that the RFS was NOT causing severe harm to the US or the Texas economy."

The Energy Policy Act of 2005, which established the RFS program, includes provisions to enable the EPA Administrator to suspend part of the RFS if its implementation would severely harm the economy or environment of a state, region, or the entire country. In a letter sent to EPA on April 25, 2008, Governor Rick Perry of Texas requested that the EPA cut the RFS mandate for ethanol production in half [noted above], citing recent economic impacts in Texas.

I'm speechless. (I'm even surprised at the EEI's glee. I thought they were backing away in their support for biofuels made from crops.)

Fortunately, another e-mail contained a link to this article, slightly cheering me up:

Peters announces new approach for US transportation

A clean and historic break with the past is needed to encourage the future vitality of our country's transportation network, said US Transportation Secretary Mary E. Peters, who unveiled the Bush Administration's new plan to refocus, reform and renew the national approach to highway and transit systems in America.

"Without a doubt, our federal approach to transportation is broken. And no amount of tweaking, adjusting or adding new layers on top will make things better," Peters said. "It is time for a new, a different and a better approach."

The Secretary said the plan sets a course for reforming the nation's transportation programmes by outlining a renewed federal focus on maintaining and improving the Interstate highway system, instead of diverting funds for wasteful pet projects and for programmes clearly not federal priority areas like restoring lighthouses.

Addressing urban congestion and giving greater flexibility to state and local leaders to invest in their most needed transit and highway priorities is another key focus of the reform plan, said Peters. Local leaders will have greater freedom and significantly more resources to fund new subways, bus routes or highways as they choose, based on the needs of local commuters instead of the dictates of Washington.

As part of this focus on congestion, the plan would create a Metropolitan Innovation Fund that rewards cities willing to combine a mix of effective transit investments, dynamic pricing of highways and new traffic technologies, the Secretary said.

The reform plan also calls for greatly reducing over 102 federal transportation programmes which have proliferated over the last two decades, replacing them with eight comprehensive, intermodal programmes that will help focus instead of dilute investments, and cut the dizzying red-tape forced upon local planners, she said.

Does anybody know what Transportation Secretary Mary E. Peters's views are on biofuels?

These are only my personal opinions.

Please be specific

You speak of "multinational grain and chemical companies and their lackeys at the World Bank and the WTO". Are you speaking of the WTO Secretariat? If so, please name names.

These are only my personal opinions.

OK, let me rephrase that

Let's at least give McCain (and only McCain, not his handlers) for acknowledging that Obama was right to begin with.

By the way, what do you think of "Save money and gasoline: stick to the legal speed limit" idea?

These are only my personal opinions.

Question for Russ

In economics, politics, society, far from being a value, large size is a pure evil, the source of all man-made evils.

So, can we assume that you would be in favor of breaking up Canada, China, India, Brazil, the European Union, Russia and the United States into their constituent states or provinces, and making each of those sub-national units into independent nations?

These are only my personal opinions.

Then we might as well abolish Congress

I have been trying here to draw a distinction between the WTO as an institution, and the results of what its Members come up with.

The WTO is a human-created institution, and therefore imperfect. The same could be said for the U.S. Congress. Yet when people complain about stupid or unfair laws enacted by Congress, or by any Parliamentary body, they don't normally can for the abolition of the institution, but rather -- and rightfully -- blame the people who voted for the laws.

The main differences between the WTO and a parliament is that: (a) the Members are countries themselves, ultimately represented by Trade Ministers (or, in the U.S. case, by the U.S. Trade Representative), not elected representatives; and (b) the WTO Agreements have to be ratified by real parliaments to have any force. In the U.S. case, that means the U.S. Senate (a body which, for many years after the country was founded was elected by state representatives, not the general public). Another difference is that WTO Agreements (their "laws") are approved through consensus, not by majority voting. That is why, as the Membership of the WTO has swelled, embracing more and more developing countries, the ability to reach consensus in negotiating rounds has become more difficult.

There is a quasi-judicial side to the WTO as well, and that comes in for equal or even more criticism (especially from environmental groups) than the WTO as a rule-making body. That quasi-judicial side works through the Dispute Settlement Mechanism (DSM), which involves a jury of peers (the bespoke dispute panels) and an appellate body. Like any court, the people who sit in judgement are human and therefore fallible. But, ultimately, they are bound by the international law.

Many environmentalists dislike the WTO because of rulings through the DSM that they have interpreted as antithetical to their views of how the world should work. But often forgotten are the rulings that have strengthened the environmental laws of countries, such as the 2000 ruling upholding France's ban on imports of asbestos and asbestos-containing products. The Appellate Body upheld the Panel's findings.

Those who are under the impression that the WTO is a creation of the Bush Administration need to read up on their history. The WTO was created out of the General Agreement on Tariffs and Trade (GATT) -- one of the so-called Breton Woods institutions created after the Second World War. Recall that a Democratic president (Truman) was in office then. The GATT and the WTO have continued to be supported by all U.S. Administrations since then -- albeit with varying degrees of enthusiasm.

Pangolin's impression of the WTO is, unfortunately a common one. S/he writes:

The WTO is telling us that we can't get local laws requiring labeling of GMOs, creating environmental protections or enforcing labor standards. They claim that all of this is so that we can have cheaper products.

The result seen around the world is more expensive food, job losses, labor standards racing for the bottom, increased pollution, environmental degradation and reduced food quality. The consent of the governed is being withdrawn; no mandate of heaven anymore.

I would be surprised that the WTO would prevent any country labelling products containing GMOs, as long as the regulation were applied consistently. But if somebody has better information on that, I'm all ears.

It certainly does not prevent the enactment of local laws requiring creating environmental protections or enforcing labor standards. What it frowns upon is countries imposing their own labor standards on other countries through trade laws. Why? Because doing so would bring trade to a halt. France has all kinds of labor laws, including relating to the employment of teenagers in even part-time jobs that would be unacceptable to most people in the United States. Should France be able to ban imports of U.S. maple syrup because U.S. laws allow 15-year olds to work part time after school to earn some extra pocket money?

In any case, the WTO is not the world's forum for establishing minimum labor standards. That is the International Labour Organization. A lot of countries that fear the incorporation of labor standards into trade agreements find it rather rich that some of the same countries that want to impose such standards are the very same ones that have an extremely poor record in ratifying the various ILO conventions. If they are so keen on the protection of workers, why do they eschew committing to those very same standards for themselves?

As for the WTO being responsible for "more expensive food, job losses, labor standards racing for the bottom, increased pollution, environmental degradation and reduced food quality", give me a break. The recent rise in the price of food is a result of lack of reform of individual countries' farm (and biofuel) policies, not the WTO's attempt to reform those same policies. Many job losses are more do to technological change than trade. And, in any case, it has long been a policy of most industrialized nations (including the United States) to apply low tariffs to manufactured goods -- WTO or no WTO. NAFTA, for example, is just one of the many bi-lateral or regional free-trade agreements to which the United States is a party. Regarding labor standards, see my comment above. Please provide some evidence of increased pollution and environmental degradation that can be attributed to something that the WTO did.

And as for reduced food quality, do you mean the tendency for food to become more standardized and less tasty? How much of that do you blame the WTO for, as opposed to the rise in power of large agri-food corporations, and the apathy of U.S. consumers. (The quality of food in Italy, where people still demand -- through their purchasing decisions -- food that is fresh and tasty is, by comparison, still of high quality.)

Finally, in answer to Moyesii ("Ron, I don't see any point to your tea story"), my point was that rules passed by countries in the name of protecting the health of consumers (or the environment) are not always applied according to scientific principles, nor even in this case a consistent notion of "precaution". The German minimum residue limit (MRL) for the pesticide that Indian tea growers use on their tea plants allowed for far lower concentrations (well below the U.S. EPA's limits) than the concentrations that they allowed in produce grown in their own country. And, to add insult to injury, for any given amount of residue (micrograms per kilogram), a consumer was likely to ingest more eating the treated vegetable than ingesting treated tea, as most of the pesticide residue stays with the tea leaves and is discarded, not ingested.

Fortunately, this case led eventually to the creation of a special group in the FAO tasked to create an international set of pesticide residue limits for tea. But it has been a long slog, and one that has left a bitter taste in the minds of Indians, who feel that the North has been applying a double standard.

These are only my personal opinions.

I should have added

The members of a WTO dispute panel are chosen for that panel only. They do not sit like judges, taking on multiple cases, and they definitely are not appointed for life!

These are only my personal opinions.

GATT Article XX

Article XX: General Exceptions:

Subject to the requirement that such measures are not applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination between countries where the same conditions prevail, or a disguised restriction on international trade, nothing in this Agreement shall be construed to prevent the adoption or enforcement by any contracting party of measures:

• (a) necessary to protect public morals;
• (b) necessary to protect human, animal or plant life or health;
• (c) relating to the importations or exportations of gold or silver;
• (d) necessary to secure compliance with laws or regulations which are not inconsistent with the provisions of this Agreement, including those relating to customs enforcement, the enforcement of monopolies operated under paragraph 4 of Article II and Article XVII, the protection of patents, trade marks and copyrights, and the prevention of deceptive practices;
• (e) relating to the products of prison labour;
• (f) imposed for the protection of national treasures of artistic, historic or archaeological value;
• (g) relating to the conservation of exhaustible natural resources if such measures are made effective in conjunction with restrictions on domestic production or consumption;
• (h) undertaken in pursuance of obligations under any intergovernmental commodity agreement which conforms to criteria submitted to the CONTRACTING PARTIES and not disapproved by them or which is itself so submitted and not so disapproved;*
• (i) involving restrictions on exports of domestic materials necessary to ensure essential quantities of such materials to a domestic processing industry during periods when the domestic price of such materials is held below the world price as part of a governmental stabilization plan; Provided that such restrictions shall not operate to increase the exports of or the protection afforded to such domestic industry, and shall not depart from the provisions of this Agreement relating to non-discrimination;
• (j) essential to the acquisition or distribution of products in general or local short supply; Provided that any such measures shall be consistent with the principle that all contracting parties are entitled to an equitable share of the international supply of such products, and that any such measures, which are inconsistent with the other provisions of the Agreement shall be discontinued as soon as the conditions giving rise to them have ceased to exist. The CONTRACTING PARTIES shall review the need for this sub-paragraph not later than 30 June 1960.

The sub-paragraphs for the environment are (b) and (g).

CONTRACTING PARTIES = WTO Member economies.

These are only my personal opinions.

Reply to Moyesii

You write:

Similarly, the WTO restricts testing and regulation of GMO technology, since it deems those as barriers to free trade, ...

The WTO certainly does not restrict countries from testing for GMO markers. And plenty of countries regulate GMO technology. What the WTO Panel and Appellate Body has ruled on is what it considered to be the inconsistent application of the European Commission's rules. One may disagree with the way that the Panel reached its decision (and here is a good article summarizing some of the legal objections), but a sweeping statement such as "the WTO restricts testing and regulation of GMO technology" is an exaggeration.

You then conclude

Does the WTO -- in practice -- contribute to sustainable agriculture? There is no evidence to support that it has or that it will.

In answer to your first question, only indirectly. After all, it is not a body charged with agricultural extension, nor does it fund development projects. It is a rule-making body concerned with activities of governments that affect trade. But, indirectly, the rules it has adopted -- such as those relating to the subsidization of "green box" payments under the Agreement on Agriculture -- have given governments wide latitude to promote sustainable agriculture.

On the other hand, it is tempting but wrong to equate total isolation from the world market as equivalent to promoting sustainable agriculture. In 1993 and 1994 I worked on a study of Turkey's agricultural policies. I was astonished at how much damage they were causing to the country's own environment. For example, it had a self-sufficiency policy for all major food grains. That, combined with the way it was subsidizing production, encouraged its farmers to plow up highly erodible grasslands on steep slopes. The result was attrocious levels of soil erosion.

More open trade has meant that it could ease off from such unsustainable production and produce crops more suited to its topography and climate, and import more of its wheat from countries with an environmental as well as an economic comparative advantage.

These are only my personal opinions.

Did they forget the RFA?

I'm surprised that the Renewable Fuels Association (RFA) -- the association of ethanol producers -- did not make it onto the list. And while Poet (the new name what used to be called Broin) makes it onto the list, Archer Danniels Midland (ADM) -- with Poet, one of the top ethanol producers in the United States -- does not.

I'd like to know more about what criteria was used for selecting what lobbying groups appeared on the CRP's list.

As for coal, I'm not surprised. After the 1973-74 oil crisis, all alternatives to oil were given the label "alternative energy". I once worked for the Alternative Energy Division on the International Energy Agency (IEA). The industries it analyzes (and still analyzes) included all electricity-producing sources of energy, plus natural gas and coal.

These are only my personal opinions.

John (Dr. X) and Vakibs

This is not a war, so let's not speak of "allies". I happened to agree with Mad Mac's most recent comment, especially his last paragraph. That is all.

That is what I am trying to support here: debating the points that people make, not their presumed world views.

These are only my personal opinions.

To add to what MAD MAC says

Wolverine,

If you are trying to make amends, I suggest you be less ambiguous:

For those I've upset by supposed name-calling, though I see it more as being legitimate descriptions and/or analogies, I'm sorry.

By that I read that you still consider that you were right to label some of us "pigs" and "Nazis". If so, why do you then say "I'm sorry"? That sorry does not seem genuine to me. You might as well have said, "Gee, I'm sorry I called you a pig, but that's only because you are one!"

Stop being presumptuous about from where you think people are coming. I am tempted to cite my own environmental bona fides, but will resist because I do not think it should be necessary. But as Mad Mac points out, people develop their world views like diners at a smorgasbord. Outside the United States you will find plenty of people who hold what in America would be considered inconsistent views: socially liberal, supportive of socialized medicine, for free (but well-regulated) trade among nations, and against corporate welfare. And deeply committed to protecting the natural environment.

Judging people by what you assume is their world view, having never met them in person, is the mark of somebody who is quick to stereotype. If there is one thing I appreciate about the diversity of views on Grist it is that the people here (normally) are resistant to stereotyping.

These are only my personal opinions.

Then I guess that means we're all Nazis

For voting for the people who create, finance and appoint the top managers of international institutions.

It's sooooo easy to insult people from behind a pseudonym. I bet you enjoy it, too.

These are only my personal opinions.

Can we return to the original topic?

Which was about the World Bank study, not the World Bank.

I am not an expert on the World Bank. I know nothing about the lending side of the World Bank, and all the criticisms levied at those activities may well be justified, for all I know.

But the research people work in a different world. They are, essentially, academics -- albeit ones who get a bit more exposure to developing countries than most. They are professionals, and generally concerned about what happens to the world's poor.

Many of the people in the Research Department have been working there for years. World Bank presidents, meanwhile come and go. The WB has more than 10,000 employees. That suggests that their direct influence on the staff selection process is going to be rather limited.

These are only my personal opinions.

Well, RBright

There was an article in the Financial Times that ran shortly after the release of the Gallagher Review that discussed the reaction of environmental groups, but unfortunately I can no longer locate it.

Here is one from Biofuelwatch:

Gallagher's Support of Second Generation Biofuels will Still Compete with Food and will Destroy the World's Forests

...

"If the Gallagher review triggers a re-examination of EU and British policy, that's good, but anything less than a complete halt to agrofuel production and government targets, incentives and subsidies which support it, will still have devastating effects on the food crisis, biodiversity and climate change", stated Almuth Ernsting from the UK's Biofuelwatch. ...

Friends of the Earth Europe has also called for "A moratorium on European financial subsidies and targets that encourage the development and production of large-scale agrofuels."

Otherwise, my main evidence is the conversations I've had with environmentally minded people working for NGOs and academia. They are glad that the Gallagher Review was blunt in its criticisms of diverting food crops to biofuels, but were surprised (only slightly, actually) that, despite all the problems that the Review identified, it still advocated increasing the use of biofuels, and maintaining the subsidies.

Obviously I disagree that the Gallagher Review's sentence on subsidies "is just stating the obvious -- that a reduced financial incentive to biofuel producers (regardless of 1st/2nd gen techs) would act as a signal to potential investors in general that government is withdrawing support -- a signal that creates biofuel investment skepticism which acts as a sort of market entry barrier to would-be 2nd gen. investors so to speak."

You are glossing over important differences among support mechanisms, for one. If they had said that support for R&D was still needed, I would have agreed. But their justification defends current subsidies as necessary to enable the industry "to respond to the challenges of transforming its supply chain and investing in advanced technologies".

Neither they nor you have shown how continuing fuel-tax exemptions for 1st-generation biofuels does that, except in a very untargeted way. To get companies to invest in advanced technologies governments normally provide incentives for investment, not incentives for production from current technologies. In the 1960s we had an adage for that kind of logic: "Bombing for peace is like fucking for virginity." Subsidizing unsustainable activities to encourage something more sustainable makes about as much sense.

Governments could decide to stop supporting 1st-generation biofuels while still sending signals that they will look upon 2nd-generation biofuels more favorably. I do not see how backing away from the former would put an investment chill on the latter.

These are only my personal opinions.

I repeat

Wolverine, you sure are quick to prove Godwin's law ... on almost every article you comment on.

Don Mitchell works for the Research Division. Those people are not the same people who go out and negotiate deals with countries. They do not set the Bank's policy.

I have met Don Mitchell. (You might notice that I figure among the people he acknowledged for comments.) You could not hope to meet a nicer, more gentle person.

On his behalf, I resent your insinuations.

These are only my personal opinions.

Goodbye to WTO? I hope not

Colin,

Just because an Indonesian NGO says that "a terrible mode of production and consumption" was "promoted by developed countries--and also by international regime like the WTO" doesn't mean it is true.

The WTO does not promote any mode of production, much less mode of consumption, of agriculture. That is the job of the FAO, regional and multilateral development banks, and national overseas development agencies.

What the WTO does (through its collective membership) is to set rules relating to trade. That means, primarily, import tariffs and subsidies. The Agreement on Agriculture sets targets for reductions only of the most production-distorting subsidies. It gives a full green light to (i.e., does not constrain) income payments for farmers, expenditure on infrastructure for agriculture, payments for environmental stewardship, and so forth.

Again, all I can say is that I agree with Jason. The WTO at least provides developing countries with some leverage. In the absence of the WTO, developing countries wanting access for their products in the North would find themselves in a much weaker bargaining position.

These are only my personal opinions.

Interesting post, Jonas

But I think that this comment needs a caveat:

The problem is that first generation liquid biofuels are not an efficient technology route, but definitely an economically sound one. [My emphasis]

Economically sound only if you have the growing conditions of Brazil. Otherwise, biodiesel is not economic in any place (if you cost the feedstock vegetable oil at the opportunity cost of the oil), and most ethanol production is uneconomic without subsidies -- either to ethanol production itself, or for agricultural inputs (like irrigation in India).

These are only my personal opinions.

Still disagree

Gar, I respect your opinions on a lot of matters, but if President Obama invites you to become his Secretary of Agriculture, please try to talk him into making you Secretary of Energy or Transport instead.

Perhaps it is because you chose the poster child of agricultural policy reformers, Japan's protected rice industry, as your illustrative example, but what you are advocating in many cases are old-style policies that have proved to be failures, and highly prone to unintended consequences.

Please provide a source for your claim that Japanese consumers "are paying less right now than if they had eliminated most domestic production and were buying suddenly double price rice from the U.S." At the beginning of implementation of the WTO Agreement on Agriculture, Japanese consumers were paying not double the world pice, but eight times the world price for rice. That gap has since narrowed, but not by so much that they have now become more efficient than the U.S., much less Thailand.

Don't forget, especially in a country like Japan, available arable land is very limited. Because the Parliament (like the USA's, disproportionally represented by farm-growing regions) has pushed rice culture so strongly, less of other foods, like fresh fruits vegetables get produced, and have to be imported.

This article is a few years old, but it provides a good overview of the huge cost to the Japanese economy of its policies, and the manifold distortions created in the international markets more generally.

Your other policy suggestions beg a lot of questions.

Where I think we could put the money with net benefit is giving a subsidy to any farmer who switched to low-input agriculture - low pesticide, low energy, low water.

Do you mean cost-sharing payments for conservation improvements? If so, those payments already exist. If you mean income-support payments, how big and for how long? Are such farmers more deserving than, for example, normal citizens who try to live their lives more sustainably? Or do you have in mind product-specific support?

That would include organic farming, but not be limited to it, though non-organic methods would have to really close to organic to qualify.

Again, for how long. Just for the transition, or all organic farmers? If the result was simply to flood the market with organic produce, and drive down prices, would organic farmers be better off?

Secondly we would want to subsidize farmers who built top soil rather than eroding it. So we should offer a subsidy on staples (grains, pulses and fresh fruits and vegetables) that could be qualified for only by growing them via low-input, soil-building means.

OK, so we compensate people for sequestering carbon. But why restrict the payments to farmers, and especially only farmers of particular crops?

Lastly I would offer people who grew fresh fruits and veggies more than their share, since these have risen in price even more than grains and pulses.

What is "their share"? Wouldn't it be better to treat the root causes of those rising prices (which includes competition for land from more highly subsidized crops) first? In any case, most economists would argue that it is more equitable and efficient to provide the poor with income support (or Food Stamps) than to tax everybody to subsidize food for everybody, which is what a policy to subsidize the production of fruits and vegetables amounts to.

You conclude that once these were in place, then we could some time later refine the policies to come up with better ones. Lots of luck. People have been trying to reform the agricultural policies for decades. Once subsidies for particular products (as opposed for services performed by farmers) become entrenched (mainly through raising the price of farmland), the farm sector (and many gullible people) treats the subsidies as entitlements.

These are only my personal opinions.

And don't fires also help control insect pests?

These are only my personal opinions.

Thanks, John

I hear you, and I sympathize. But, as much as we might be tempted to lash back at the insults of others, we should keep to the high road, and criticize their ideas, not what we think is their personalities. Peace.

These are only my personal opinions.

You're out of line, John (a.k.a. Amazing Dr. X)

I am left to conclude from this that you simply want to be left to apply the "backcut" over and over with no interference, leaving the same mess you and your logging friends have made for over a century.

You really enjoy the kill don't you, the sound of a 300 hundred year old tree hitting the ground to be turned into throw away furniture or cardboard boxes in China. It makes you happy, or what passes for happiness in your living ecosystem hating, miserable existence. Your life is your punishment, hell right here on earth.

You don't know that, John. It sounds as if you are simply transferring your views on foresters generally to this forester in particular. Such comments are inappropriate, and unfair.

These are only my personal opinions.

Good post, Gar

An obvious point -- that policy makers should always pull back and look at the big picture -- but not one I've seen put in concrete terms like this. Yes, the most effective way to address the impact on people's wallets of higher energy prices may lie, in part, in reducing costs elsewhere.

But my advice is to not succumb to the temptation to be too prescriptive, to "pick winners". It is fun to play at being the omnipotent Chancellor of the Exchequer (i.e., spending czar), but any real debate over public spending is going to be messy.

I sympathize with stopgreenpath in this respect. The last thing policy makers should do is force large-scale anything on the public if ultimately all they are trying to do is sustain the iconic "McMansions crammed full of plasma TVs." Spending priorities should always think of helping the least well-off first.

An important starting point is to avoid treating current expenditure on any industry as an entitlement. Budgets are limited, and priorities change over time. There is no economic sense, only political tradition, for example, to think of a fixed-sized envelope for spending on agriculture. Perhaps even more needs to be spent on agriculture than at present; but it could very well be that less needs to be spent. There is no doubt a public good in funding R&D related to horticultural crops, for instance, but simply supporting the price of horticultural crops (for example) will do nothing in the end but provide a windfall to current owners of arable land.

I look forward to much more discussion on this proposal.

These are only my personal opinions.

Matt

Could comment, and good blog. I don't know if you can, but if you could somehow explain the Sierra Club's position on agro-fuels, and the "food to fuel mandate", that would be much appreciated. Given the diverse views I've seen expressed by different people in the Sierra Club on this topic, it is hard to see where the organization as a whole stands on the issue (besides in a circular firing squad).

These are only my personal opinions.

Response to OhioPaul

Food prices are going up because it's the energy, stupid. Come on. Get on biofuels for legit reasons I can respect.

I depends on at what point in the supply chain you measure the price of "food". When the USDA speaks of food, it is referring to the consumer price index for food, which is based on movements in estimated total expenditure on food and non-alcoholic beverages -- some $1.14 trillion (with a "t" a year). Forty-five percent of the weighting in that index is expenditure on meals eaten outside the home. And, as we all know, the cost of the grain and other foodstuffs in the price of a meal is a tiny fraction. When one looks at expenditure on food at that level, the contribution of rising grain and oilseed prices is bound to be moderate, while the contribution of the cost of energy (used not only for farming, but also for processing, transporting and refrigerating the final products) will be significant.

When one looks at the international prices for food commodities (corn, wheat, barley, soybeans, etc.), supply and demand factors dominate, not production costs. According to the USDA's latest "Cost of production forecasts", the costs of fuel, lubricants and electricity for corn growers is expected to be around $47 per acre this year. At a projected average yield of 134 bushels per acre, that comes to $0.35 per bushel -- a rise of $0.20 per bushel compared with 2002. The cost of fertilizer (which is strongly linked to the price of energy) is expected to be around $167 per acre, or $1.25 per bushel -- up $0.95 per bushel since 2002. Altogether that represents a rise in energy-related costs of $1.15 per bushel since 2002 (when corn was selling for closer to $2 per bushel at the farm gate). Seed costs have doubled, but a large part of that rise is due to the overall increase in the price of corn. Other costs have increased by about 10%.

In short, only about one-quarter of the increase in the price of corn can be attributed to rising energy and fertilizer costs. Most of the rest is due to supply and demand factors. And by far the largest component of the increase in demand for corn is corn used for ethanol.

These are only my personal opinions.

Evidence?

RD,

Sorry to keep coming back to this, but you still have not answered my question why, in February 2007, when crude oil was selling at $70 per barrel and the tax credit was $0.51/gallon, these plants went ahaead, but in May 2008, when crude oil was selling at above $120 per barrel, Congress thought it necessary to boost that subsidy by an additional $0.50, to a total of $1.01/gallon.

That is pertinent to your comment that:

Once one or two processes are shown to work well, I believe the subsidies should be (and will be) phased out fairly quickly. [My emphasis]

Where is your evidence to provide us with any degree of confidence that will be the case?

Again, I offer as counter-evidence: corn ethanol has been subsidized for 30 years. In 2006, when the price of oil was $60/barrel, the industry was crowing that it didn't need subsidies and could in fact compete with gasoline at $40/barrel. Now we are at $130/barrel, evidence is everywhere that biofuels are a major, if not the main factor contributing to the rise in the prices of food grains and oilseeds, and at the most Congress was willing to do was reduce the subsidy (starting next year) from $0.51 to $0.46 per gallon, and then only so that it could find money to boost the subsidy for cellulosic ethanol.

With a track record like that, can you blame people for being skeptical?

These are only my personal opinions.

Thanks for the links on bio-char, Jonas

May I make a friendly suggestion, though? Use "bio-energy" when you are referring to anything but liquid biofuels. I think it would eliminate a lot of confusion in the debate, and unnecessary disagreement. Perhaps people should not use "biofuels" as short for "liquid fuels made from biomass", but must understand that as such. So when you speak of biofuels, but actually mean fuel for power generation, or for producing a combustible gas, people may not actually get where you are coming from.

And in answer to your question, "Is anyone still talking about liquid biofuels, really? I thought that debate was over." Hardly! For one, that is the focus of this string. Second, countries and states such as Louisiana, Massachusetts and Pennsylvania are still enacting mandates for liquid biofuels. The interest groups behind these fuels are still very strong!

These are only my personal opinions.

It's not just costs, but opportunity costs

Thank you for the more measured and circumspect response. But I'd appreciate your thoughts on why, if cellulosic ethanol is so economically viable, that it will require a $1.01/gallon federal subsidy (plus generous subsidies provided by many states), that its use needs to be mandated, and that the industry is not willing to see the $0.54/gallon import tariff on Brazilian ethanol expire.

Also, it is not just production costs that matters, but the opportunity costs of the factors used in production. Studies at Iowa State University have shown that cost of growing switchgrass in the corn belt is low. But, as they convincingly argue, farmers in that region will never grow switchgrass if they can grow corn, because the net returns are higher -- i.e., growing corn and soybeans is the highest-value use of that land.

Similarly, it may be cheap to grow trees and turn them into woodchips. But there is a growing demand on wood resources, including for wood-fired electricity, and only so much land available (unless you are advocating encroaching on national parks and other protected areas). I do not think it can be automatically assumed that the price of biomass today is going to remain constant no matter how large a demand is placed on those resources.

These are only my personal opinions.

Then chew on it

R.D. Miller writes:

In the 2nd quarter, venture capitalists poured funds into cellulosic ethanol development at a rate faster than was put into Internet tech or genetic research companies. New CE facilities are being built at an increasingly faster pace to demonstrate both advancements in the technology, as well as commercial viability

That's all fine and dandy. But there is something missing from RD Miller's note: economics.

The fact is, government grants, loans and loan guarantees have played a big role in stimulating the investments in cellulosic ethanol so far, as have the mandated volumes (federal, as well as in Pennsylvania and Massachusetts), the expectations of continued protection from imports and, above all, blending and production subsidies -- federal and state.

Let's look at the case of Range Fuels -- Vinod Khosla's much-trumpeted project -- for example.

Range Fuels (formerly Kergy Inc.) of Broomfield, Colorado, will be granted up to $76 million by the federal government for their plant being constructed in Soperton (Treutlen County), Georgia. So a large amount of the capital cost of the plant ($1.55 per annual gallon, based on the original proposal for 40 million gallons of ethanol per year and 9 million gallons per year of methanol) will have been underwritten by the federal government.

In addition, according to an article in the Atlanta Constitution, Treutlen County offered tax abatements and a 97-acre tract in its industrial park worth $350,000. And the state's OneGeorgia Authority, which uses tobacco settlement money for rural economic development, was (in February 2007) likely to approve a $6 million grant for Treutlen County to help Range Fuels buy production equipment. The company has also benefited from a 4 percent sales tax exemption for materials and equipment used to construct biofuel facilities.

Now, let's look at the economic viability of the plant once it is operating. To start off, at the time of his investment, Mr. Khosla knew that the plant would benefit from the federal volumetric ethanol excise tax credit (VEETC), which at the time was 51¢ per gallon. In addition, because during Phase I the plant will produce only about 20 million gallons of ethanol and methanol per year, it will qualify for the additional 10¢ per gallon small ethanol producer tax credit on the first 15 million gallons a year it produces.

Whether at the time he committed to his investment Mr. Khosla knew about plans by Congress to provide an additional 50¢ per gallon tax credit for each gallon of qualified cellulosic fuel production is anybody's guess. But in the latest Farm Bill, that additional subsidy was included, bringing the total volumetric subsidy for cellulosic ethanol to $1.01 per gallon (or $1.50 per gallon of gasoline equivalent).

(The creation of this additional incentive itself begs the question as to why an even larger subsidy was needed when, at the time the grant for the Range Fuels plant was made, in February 2007, when crude oil was selling for $50/barrel less than it was at the time that the Farm Bill was passed. That is to say, if the plant was expecting to make money when the the price of crude was much lower than it is today, why was a doubling of the volumetric subsidy needed?)

The industry wants it both ways: they boast about how production costs for cellulosic ethanol will soon be below $1.00 per gallon, and at the same time push for -- and obtain -- subsidies that suggest that the real cost will be much, much higher. Could it be that the investors know something we don't -- e.g., that assumptions about bountiful, cheap supplies of cellulosic feedstock could have been wrong?

No, Mr. Miller, people are not sceptics of cellulosic ethanol simply because they fear the competition, but because past, exaggerated claims about biofuels have made people justifiably wary. Once bitten, twice shy and all that.

These are only my personal opinions.

Liquid fuels vs. biomass to heat or electric power

I wonder how the biomass to biofuel logistics, yield and efficiencies compare with direct combustion as as source of heat or electric generation in small scale, local facilities?

Poorly, in all the studies I have seen. But for policy-makers who are strong motivated by notions of energy independence, that difference in cost and efficiency doesn't matter very much. What matters is finding substitutes for (imported) petroleum

These are only my personal opinions.

Thanks for the informative comment, Justlou

Yes, I have wondered about the effects of soil compaction as well. I assume (perhaps naively) that somebody in one of the USDA-ARS units or land-grant universities is looking into that.

The way you describe the harvesting, it would be carried out as a separate, additional operation, conducted about 40 days after harvesting the grain. That was certainly the thinking a decade ago. (See this good summary of a 1995 investigation into harvesting corn stover for a proposed corn-based pulp mill in northwest Indiana, for example.) That method creates all kinds of challenges, not least to the problem of contaminating the residues with dirt.

I would have assumed that what the industry has in mind these days is harvesting the residues at the same time that the grain or oilseeds are harvested -- in the case of corn, what some call "Whole Stalk Harvest". That, in the least, would require either replacing or modifying existing harvesters, and towing or driving additional wagons to collect the residues. But I am not an expert in such matters.

In either case, I think your vision of the service being largely contracted out seems likely.

These are only my personal opinions.

Yes, but

The Fugitive (1993)
Presumed Innocent (1990)
The Mosquito Coast (1986)
Witness (1985)
Star Wars (various years)
Apocalypse Now (1979)
American Graffiti (1973)

Especially Witness.

These are only my personal opinions.

Update on GM and E85

According to DTN Ethanol Center:

In addition to the push for cellulosic ethanol production, the NGA [National Governors Association] announced they will work with General Motors Corp. to help build demand for non-grain fuels by increasing the distribution of E85 ethanol by making more E85 pumps available at U.S. gas retailers.* Bloomberg reported that there currently there are fewer than 1,700 E85 pumps in the U.S. out of a total of about 170,000 gasoline stations, numbers that some believe are keeping E85 from more widespread us. The NGA will assist GM in finding locations to install E85 pumps, giving American drivers better access to E85 fuel and helping boost GM's goal of making half of its vehicles flex-fuel capable by 2012. GM is also offering to help gas retailers in securing grant money to help cover the cost of installation.

*My question is, how does increasing the number of E85 pumps increase the demand for cellulosic ethanol in particular, and not ethanol generally, including ethanol derived from other sources, such as corn?

These are only my personal opinions.

Wow!

Truly joyful. Nice touch, filming a segment in No Man's Land.

These are only my personal opinions.

Not ethanol, catman, but biodiesel

The idea of harvesting the fat from cadavers was already floated in my first article for Gristmill, back in December 2006.On USDA pessimistic on hunger outlook posted 1 year, 4 months ago 11 Responses

Dittto to what Sean says and asks

I was reading this and asking myself the same question. As with him, I wouldn't want a smelter in my back yard either (especially if I lived in bleak but beautiful Iceland), but I don't see the big concern with CO2 emissions. After whatever is associated with generating the electricity itself (not a problem in this case), I think the next-largest source of CO2 emissions results from deterioration of the carbon anode.

But there are technological solutions to that, through using an inert, non-carbon anode or coating it to make it more resistant to being consumed during the conversion process. One would assume that any new smelter would use one of these technologies.

These are only my personal opinions.

The Dutch have been worrying about climate change

... since, oh, at least 1979.

I was a graduate student at the U. of Pennsylvania at the time. One day in February I came down to Washington and called in on the Dutch embassy's economic counselor to talk about their energy policy. I mentioned the problem of SO2 emissions (they were then increasing their coal use), and I was taken aback when the guy said, "In The Netherlands, we're not so worried about SO2 emissions, but CO2 emissions. We are, after all, highly vulnerable to rising sea levels."

These are only my personal opinions.

WB redux

From Malaysia New.Net:

         G8 discussion centers on biofuel
                      Malaysia News.Net
                  Tuesday 8th July, 2008

The biofuel policies of wealthy countries have been on the agenda at the G8 conference in Japan.

World Bank President Robert Zoellick has called for reform of food resources, urging countries to grow more food to feed the hungry.

Speaking on the sidelines of the summit on Hokkaido island, Mr. Zoellick said biofuels had largely caused massive food price rises.

He laid particular blame on fuels made from corn and rapeseed and said both the US and Europe need to take action to reduce tariffs that benefit grain and oil seed biofuels but take food off the table of millions. [My emphasis]

If the above is an accurate reflection of what Mr. Zoellick said, it doesn't sound like much of a refutation to me!

These are only my personal opinions.

More on land values

There are something like 31.5 million acres of farmland in Iowa. That means that in the course of two years, some $30 billion (in dollars of 2005) was added to the value of farmland in that one state alone. (Illinois, another corn-producing state, has almost as much farmland as Iowa.) Very little of that increase has anything to do with improvements to the land (e.g., grading, drainage, irrigation) or in roads or other infrastructure providing access to it.

If you need an explanation for why farm subsidies, and biofuel support policies in particular, can so easily become entrenched, all you have to do is cite that one figure.

These are only my personal opinions.

John Bailo

To what does your comment relate in this string, pray tell?

These are only my personal opinions.

That's rich, Jonas

Ron and Rynn, some objectivity please

I'll leave it to other readers to judge my own objectivity, buy I fail to see what Jon Rynn said in this string that is the least bit subjective.

Regarding the Wageningen report, it is one among many. Had my post claimed to be a literature review, I might have been remiss in not referring to it. But my post was in response to the discussion of the so-called "secret World Bank report", not a general discussion of all the reports that have investigated the link between biofuels and food prices. I could equally demand of you that every time you write about biofuels that you mention, and include a link to, the studies by the Global Subsidies Initiative.

Objectivity, Jonas, in my view means judging work on its merits, and not claiming higher authority for the authors because they happen to work at Wageningen, or Moscow State University, or Universität Tübingen, or wherever. Similarly, it is highly subjective of you to dismiss out of hand a piece of analysis that you have not even seen simply because it was done by somebody who works for the World Bank, which you seem to regard as the institutionalization of all evil. You should learn to keep your feelings for an institution separate from the individuals who work for it.

As for the study by Martin Banse et al. (2008), a lot of it concerns long-term trends. Their analysis of short-term trends is written in a rather telegraphic style, and does not assign values to the individual factors.

I wonder, also, if they fully understand what drives the derived demand for biofuel feedstocks. They assert, for example, that:

"[I]ncreasing food and feedstock prices make biofuels less profitable and food more profitable. This shifts production back to food (in US is this already visible; Trostle 2008, p.17).

But since they don't provide a list of references, I cannot verify that. Do they understand the full extent of the subsidies for biofuels, and the fact that until mandated volumes are filled, biofuel producers can outbid other buyers of the feedstock? They also speak of the poor economics of producing biodiesel in the United States. Are they aware of the phenomenon of "splash and dash"?

The fundamental difference between Don Mitchell's analysis and that by others, which is what makes it interesting, is, as I mentioned earlier, that he asks what would have happened to prices in the absence of grain- and oilseed-based biofuels, and then considers biofuels as the residual factor. Others, essentially, take a particular starting date and then treat each factor contributing to rising demand for grains and oilseeds from then on as having a weight in the price rises proportional to their added volume.

These are only my personal opinions.

Back onto the subject of Tom's post ...

I have just taken a tour around the Vexin français (the western half of the Val-d'Oise), an area of rich farmland about 50 km northwest of Paris where I spend most of my weekends. I have been shocked to see the amount of maize (corn) that has been planted already, this early in the season.

The Vexin has traditionally grown rotations of wheat, oilseed rape (colza), barley, and sugarbeets. Maize is often planted as a second crop (for sileage) after the harvest of winter wheat. This early-planted maize is, I assume, for grain. (I'll report back in September.)

What worries me is that the soil is much more exposed to the summer rains than when it is planted to wheat or barley.

In any case, it shows that events (policies and weather) in the United States have knock-on effects across the world.

These are only my personal opinions.

Dream on

Dragutin Dimitrijevic writes:

Sagebrush could be harvested for biomass using the same techniques. The desert interiors of states like Nevada, Utah, Arizona, New Mexico and west Texas are short of water and the soil and climate are poor for raising food crops. Those areas have supported very little food agriculture throughout the history of the United States. A large scale planting of biomass for ethanol production in those areas would not impose on traditonal farmland.

If it was economical to plant crops -- sagebrush or otherwise -- on desert lands, it would have been done already, either for fodder or for other uses of biomass. You cannot get high yields of biomass without water!!

It is precisely this kind of unrealistic dreaming of magic solutions that is distracting people from the real task that confronts us.

These are only my personal opinions.

Was Malthus anticipating biofuels?

We shall, hopefully, soon see a report from the World Bank confirming (as most of us suspected) that growing population was much less a factor in the recent run-up in the prices of grains than the diversion of crops to biofuels. According to a report in the UK's Guardian newspaper:

Biofuels have forced global food prices up by 75% - far more than previously estimated - according to a confidential World Bank report obtained by the Guardian.

The damning unpublished assessment is based on the most detailed analysis of the crisis so far, carried out by an internationally-respected economist at global financial body.

The figure emphatically contradicts the US government's claims that plant-derived fuels contribute less than 3% to food-price rises. It will add to pressure on governments in Washington and across Europe, which have turned to plant-derived fuels to reduce emissions of greenhouse gases and reduce their dependence on imported oil.

Senior development sources believe the report, completed in April, has not been published to avoid embarrassing President George Bush. "It would put the World Bank in a political hot-spot with the White House," said one yesterday.

A word of explanation: I presume that the World Bank's point of measurement is farm-gate or wholesale prices for foods, which is closer to the cost actually born by hungry people in low-income countries. The Administration's point of measurement is final consumer expenditure, which includes the cost of meals eaten in restaurants (45% of the weighting in the case of the United States).

These are only my personal opinions.

Wolverine

You can experience autarky easily: go live in North Korea. Enjoy. And drop us a postcard from time to time.

As for Brazilian farmers being pushed into the Amazon by growers of sugarcane used for ethanol, that contention is debatable. There is equally strong, or stronger evidence that the 16% decline in area planted to soybeans (and 19% reduction in the amount harvested) in the United States last year, thanks to a big expansion in area planted to corn for ethanol, led to a boom in soybean production in Latin America, including the Amazon.

In other words: federal mandates support ethanol use; tariffs reduce the portion of the ethanol that comes from more-efficient sources, like cane grown in Brazil; more corn is planted in the United States at the expense of soybeans; other countries, including Brazil, make up for some of that shortfall by increasing their own production.

First-best solution? Eliminate the mandates and tax credits for biofuels AND eliminate the secondary ($0.54/gallon) tariff on ethanol. Second-best solution? Eliminate the secondary ($0.54/gallon) tariff on ethanol. Nth-best solution? Maintain the mandates and tax credits for biofuels and ban any imports of ethanol.

These are only my personal opinions.

Vakib

But I think you are misunderstanding the problem a bit. Ideally, the price and demand are strongly coupled. But in reality, the purchasing power of people could be so low that they cannot buy food even if it is available.

Millions of tonnes of grain can be stocked in warehouses, but people can still die out of hunger. This is the reason US and Europe have to constantly bail out populations through food aid. This reality will sink in if you live in a poor country.

From what evidence did you reach your conclusion that we do not understand that?

A question I have is, would decrease in US bio-fuel consumption create further demand for oil and push up the prices?

This is a hotly debated question. At least one set of respected researchers contend that the current support policies are providing little if any incentive to reduce consumption of petroleum (at least in the United States). Basically, because they are subsidized so that they can sell at a price competitive with gasoline, what they have done is expanded the supply available at a given cost.

Freeing ourselves from oil is not an easy process. Each of the promising technologies that help this transition produce results in different time-frames. Fortunately or unfortunately, the thing that helps the most immediately is biofuels.

That is a highly contestable assertion. During the 1970s oil crises in the United States, they tried a different way to reduce demand immediately: reducing the maximum speed limit to 55 miles (around 90 km) per hour. According to this New York Times article:

Roland Hwang, the vehicles policy director at the Natural Resources Defense Council in San Francisco, estimated the savings of the speed limit in 1983 at 2.5 billion gallons [9.5 billion litres per year] of gasoline and diesel fuel, or 2.2 percent of the total use for these types of fuels.

You then observe that the numbers I supplied tell us is that biofuels accounted for a 2.5% increase in demand (out of a 5% total increase) between 2005 and 2007.

But in the poorest parts of the world, the increase in food prices is a lot higher than 5% (at some places, the prices  increased by more than 100%).  What is the reason for this? For how much should biofuels be held accountable?

Demand for staples like wheat and maize are highly inelastic. That means that if demand increases, and supply is declining (or at least not keeping pace), prices can increase sharply. The price increases recently have been exacerbated by some countries (starting in 2007) placing bans or taxes on key commodity exports. Such policies can increase market nervousness, and encourage some sellers to hold onto stocks in the hope that prices will rise further -- a self-fulfilling prophesy.

So, in that sense, you can blame other factors. But countries and traders are not operating in a vacuum. They can see a rise in the (mandated) demand for biofuels, and a strong likelihood of a reduced maize harvest. How do you think that will affect their behaviour? Would they behave differently if biofuels were no longer mandated?

Can the 2.5% damage of bio-fuels be compensated by investing in poor countries and increasing food production there?

Yes, but over the longer term.

I am not accusing you of something as simple as being an oil agent. You could be just one of the people who ate their propaganda. It could be anyone, including guys from FAO.

Unsubstantiated conspiracy theories do not carry much weight here, Vakibs, and I would strongly suggest that you refrain from suggesting that prople who you hardly know have "eaten" anybody's propoganda. Some of us like to imagine we have brains of our own.

These are only my personal opinions.

Vakibs

Now, it is true that inflation is soaring in India. And food costs have exploded out of bounds. But the fault lies squarely with the speculators who teamed up increasing oil and commodity prices.

Uh-huh. Please provide evidence to support that claim.

Hijacking the world food prices issue towards condemning bio-fuels is cheap politics. Bio-fuels can be good or bad. It is primarily an American issue. It's about your priorities on energy security and economics. The ball is in your court.

I don't see any hijackers around here. Not too long ago, both the industry and the U.S. government were crediting demand for biofuels for driving up the prices of grains and oilseeds above the trigger prices for commodity payments, thus saving the federal government money that it otherwise would have had to pay for crop subsidies. (Of course, the increase in costs to consumers, and the costs of biofuel subsidies themselves, were usually glossed over.)

Since then, the volume of grains and oilseeds diverted to the production of biofuels has increased dramatically. Now what we are witnessing is an even higher mandated volume at a time when the area planted to maize was already expected to drop by 8%. And, because of heavy rains, the total harvest could fall by a much greater percentage than that.

No serious agricultural economist that I know of would ever claim that demand for biofuels has NOTHING to do with the rise in the prices of crops. Experts may respectively disgree on how big its contribution has been, but nobody would say it is anywhere close to zero.

These are only my personal opinions.

"He voted against biofuels"

Gee, what a damning indictment of McCain! (Others might have said the Senator from Arizona was prescient.) In any case, McCain didn't vote against biofuels, he voted against biofuel subsidies and mandates. That's the problem with speaking in such simplistic terms.

Note also, at 5 minutes and 30 seconds into his speech, Obama ridicules McCain's "$3 million prize" for a better car battery, when in fact what McCain proposed was a "$300 million prize." Obama then credits big government for putting men on the moon, but forgets to mention that the $10 million X-Prize proved to be a powerful incentive for the creation of a non-governmental space ship (and that Charles Lindbergh was inspired by the Orteig Prize to make the first solo transatlantic airplane flight).

Interesting that Obama also says (at 7'45) that what the American people need is something that "will help them fill up their tanks and put food on their table." I wonder how is he going to square that promise with his unstinting support for corn ethanol?

Like Sean, I see also some positive ideas coming out of the Obama camp, and some silly ones coming out of the McCain camp. But I think you're exaggerating by calling the speech a TKO, David.

For some of us, policy details DO matter, especially given what we know about how each of the presidential candidates have voted.

These are only my personal opinions.

Floor price?

Thomas L. Friedman writes:

[H]ere is how we're going to break our addiction: We're going to set a floor price of $4.50 a gallon for gasoline and $100 a barrel for oil.

So, creating a massive bureaucracy to monitor and administor adherence to a floor price -- ensuring that huge amounts of money are transfered to the oil industry (and to biofuel producers, if their costs manage to come down) should the world price of oil drop below $100 per barrel -- is preferable to simply raising the federal excise taxes on transport fuels to something closer to what we have here in Europe?

Please explain, Mr. Friedman.

These are only my personal opinions.

I'm not advocating farming nutria either ...

... but part of the reason they are not farmed is that nutria farming proved to be unprofitable. Moreover, it sounds as if the original farmers of nutria in North America were unregulated, and so:

[N]utria were imported to the United States in the 1930s for their fur, and showed up in Virginia in the early 1950s. When the fur-farming experiments went bust, most nutria were set free.

Perhaps had they been required to post a bond against letting them free, they might not have done that.

Indeed, your comment about Australia, Gar, is not true, and shows that with careful controls, even Australia, which is highly cautious when it comes to invasive species, now allows rabbit farming (PDF) under strict controls:

Rabbit farming was prohibited throughout Australia until 1987 because of the pest status of wild rabbits. Prohibition was first lifted in Western Australia, though strict controls on commercial rabbit farming were applied. Over the last 5-6 years state legislation has been changed to allow commercial rabbit farming in NSW, Victoria, South Australia and Tasmania.

Finally, the Wikipedia article doesn't talk about harvesting the roots (why would you?), but notes that the kudzu vine can be killed by cutting off the crown of the root. Clearly, nobody would even attempt farming kudzu on a large scale unless they had all the bugs worked out.

In short, this may still be a stupid idea, but none of your arguments against it so far are convincing, Gar.

These are only my personal opinions.

Cool it, Jonas

Please, common [sic], if you are writing about this type of sensitive topics, at least get the bottom basics right. You're making yourselves look like fools here really.

Um, citing numbers on the percentage of food consumed in the country of production without recognizing that what matters is the effects of changes in supply and demand on international prices looks pretty foolish to me. Yes, the transmission of prices from the world market to local markets is not perfect, especially in countries that have imposed export restrictions or are trying to keep down domestic prices through subsidies. But the global economy is becoming more and more integrated, and developments that affect commodities in one country do eventually affect prices and supplies elsewhere in the world.

Your persistent remarks on the alleged ignorance of the contributors here is poorly targeted. Moreover, you yourself have been caught out expressing personal views that you have tried to pass off as hard facts, or that are at least debatable.

Tom did not say "the majority of the 850 million people most at risk of hunger" lived in cities, he said "many of whom have been essentially evicted from productive farmland and pushed into cities over the past few decades." Many does not necessarily mean most. But he is right also about the general trend of rural-urban migration, and the wretched conditions facing the millions of people now living in urban slums.

Take the high road, Jonas, and cut the gratuitous personal attacks.On As corn and soy fields drown in rainwater, the food crisis deepens posted 1 year, 5 months ago 19 Responses

Run, don't walk

To buy a copy (only used ones now available) of Keith Bradsher's, High and Mighty: The Dangerous Rise of the SUV. It is a must read for anybody with an interest in the environment, and the power of entrenched interests.

These are only my personal opinions.

You forgot three words, Almir

The developed world appears purposely myopic in relation to the opportunities Brazil presents, maybe it's because that would upset wealthy US and European farmers ...

... and venture capitalists.

These are only my personal opinions.

Depends on the mineral, Eli

Generally, the lower the grade, the more abundant are the deposits at that grade. And, in the area of metals, scientific breakthroughs keep coming. Recently, for example, Oak Ridge National Laboratory (ORNL) claims to have discovered a way to cut titanium production costs in half:

ORNL says it can cut titanium production cost in half

By Wolfgang Gruener    

Tuesday, May 20, 2008 17:47  

Scientists from the Oak Ridge National Laboratory said they have found a way to produce titanium in a much cheaper way: The new processing technique could reduce the amount of energy required and the cost to make titanium parts from powders by up to 50%, they claim. This advance could make it feasible to use titanium alloys for brake rotors, artificial joint replacements, armor for military vehicles and possibly lots of high-end gadgets.  

"Instead of using conventional melt processing to produce products from titanium powder, with the new method the powders remain in their solid form during the entire procedure," Bill Peter, a researcher in ORNL's Materials Science and Technology Division, said. "This saves a tremendous amount of energy required for processing, greatly reduces the amount of scrap and allows for new alloys and engineered composites."

These are only my personal opinions.

Tell that to Congress, Rich

we can still use ethanol from sugar cane, even if we have to buy it from Brazil.  In terms of geopolitics, it would be nice to have the alternative of buying our fuel from Brazil as opposed to buying it from OPEC.  At the very least, it would diversify our fuel sources and give OPEC a little competition ....

Just one little problem: there is an ad valorem tariff of 2.5% plus a specific-rate tariff of $0.54 per gallon levied on undenatured ethanol from Brazil. And Congress keeps extending the tariff, most recently (in the Farm Bill) for another two years.

In the past, there was a duty-drawback scheme which allowed importers to get back the duty they paid on imported ethanol for every gallon of jet fuel they exported. (Fuelling a jet flying off to another country counted as an export.) But that loophole was closed in the Farm Bill, effective 1 October 2008, which will make it even more costly to import Brazilian ethanol in the future.

These are only my personal opinions.

Don't forget the economics

Even with removal of all subsidies, these fuels will likely persist going forward, just not at the grand scale that the industry had hoped for.

Going forward? Soon as the refineries start paying the prices for feedstock we're seeing, it would be hard for them to compete with petroleum fuels (except perhaps to the extent that ethanol commands a premium as an oxygenate).

At $7 per bushel of corn (recent futures prices are higher than that), and assuming a (slightly generous) 2.7 gallons of ethanol per bushel, the cost just for the feedstock comes to $2.60 per gallon. To that, add labor and processing costs, especially the energy for distillation and dewatering. According to Robert Rapier, those operating costs come to around $0.70 per gallon. Subtract credits for sales of distillers grains (around $0.80 per gallon, assuming a 30% yield by weight and that DDGs sell at the same price as corn), and you end up with a net production cost of around $2.50 per gallon -- excluding any return on investment. That is at the plant. Add in at least $0.20 per gallon distribution and marketing costs (probably more), and the pre-tax retail cost is $2.70 -- before taxes. If ethanol were charged at the same volumetric tax rate as gasoline, that would add another $0.38 per gallon, bringing the total expected retail price (with no return to profit) of $3.08 per gallon. But let's say taxes would be proportional to its energy content, then that brings it to a retail price of $2.95.

But ethanol has an energy value of around 67% of gasoline. Let's boost its effective energy value up to 70% because of its higher octane rating. That brings the price up to $4.21 per gallon of gasoline equivalent, compared with an average retail price for gasoline of $4.04 per gallon on 9 June 2008.

But don't necessarily take my word for it. Here is what Rick Kment, an analyst for DTN wrote today:

Ethanol plant profit levels continue to spiral downward like a plane shot out of the air. Corn futures prices increased another 5 3/4 cents per bushel, which decreased overall net profit levels by nearly 6 cents per gallon Thursday afternoon. Neeley Biofuels Inc [their hypothetical plant] is currently posting a net loss of 56.9 cents per gallon of ethanol produced, and if corn prices continue to move higher, these losses are likely to increase.

Now let's look at biodiesel. Soybean Oil Futures are currently trading at $0.66 per pound. It takes approximately 7.6 pounds of soybean oil to produce a gallon of biodiesel. That makes the feedstock cost $5.02 per gallon. According to a recent study by Iowa State University's Miguel Carriquiry and Bruce Babcock, operating costs other than the cost of feedstock currently average around $0.59 per gallon. By-products of biodiesel production (glycerin, fatty acids, and filter cakes) provide revenues of perhaps $0.08 per gallon. That brings the production cost to $5.53 per gallon -- before taxes, and before distribution and marketing costs, which would add another $0.73 per gallon, or let's say a total cost at the point of retail sales of approximately $6.25 per gallon.

By comparison, the national average retail price for a gallon of diesel on 9 June 2008 was $4.69 per gallon.

Obviously, averages hide local differences. So if the ethanol or biodiesel plant is far from a competing petroleum refinery, its economics will look better.

But to conclude that "with removal of all subsidies, these fuels will likely persist going forward" seems highly dependent on the assumptions one makes about future, highly volatile feedstock and petroleum prices. The above calculations suggest that, at the moment, the $0.51 per gallon blenders credit for ethanol, and the $1.00 per gallon blenders credit for biodiesel, are what are helping to push up the prices of biofuels enough so that producers can cover their costs. Without those subsidies ...

These are only my personal opinions.

Nice retort, Erik

But it would be helpful to know what assumptions lie behind a statement like biofuels are "a small and important part of our energy mix and will be going forward."

Are you assuming the continuation of subsidies ($1.00 per gallon, minimum, from the feds, plus up to another $1.00 per gallon from the states in the case of biodiesel) and mandates? If so, then I suppose any energy source will be "a small and important part of our energy mix" if the government requires you use it and throws lots of money at it.

If not, how much biofuel production (e.g., as a fraction of current consumption of transport fuels) do you think would exist in the absence of subsidies and mandates?

These are only my personal opinions.

Orfintain

The life-cycle studies that come up with slight increases in net GHG emissions for biofuels are outliers among those that have only looked at GHG emissions associated with farming the crop and transforming the crop into a fuel.

I assume that amazingdrx is referring to recent studies (like those published in Science) that also consider GHG emissions associated with the conversion of grasslands and forest land to make up for the crops diverted to fuel-making.

Even if all the growth in demand for food and feed could be met, AND biofuels produced, simply from improving yield on existing lands, it still begs the question whether it might be more cost-effective to pay land-oweners to sequester carbon rather than to grow feedstocks for biofuels. The answer will, of course, depend on the feedstock.

These are only my personal opinions.

Thanks amazingdrx

For the comments on push polls. That is why I asked for anybody to post a link to the actual survey questionnaire used by the RFA, and its numerical results.

The National Center for Public Policy Research web page (see the link at the beginning of my article) contains the original survey questions, and statistics on the answers and the demographics of the sample.

These are only my personal opinions.

On non-contingent subsidies

Jon, I don't know anything about the Berkeley program to which you prefer. If the city is helping to finance the installation of PV units on home-owners' rooftops (i.e., the consumption of a good, not its production), and does not make the subsidy contingent on the purchase of a PV unit from a domestic supplier (though note: many such programs insist that the supplier be certified by a domestic certification body), then the subsidy is probably neither prohibited nor actionable. (I couldn't say for sure without looking at the fine print.)

And, yes, a large part of government expenditure -- almost assuredly the majority -- around the world is neither prohibited nor actionable (i.e., it is "WTO legal") because it is for general infrastructure and is not contingent on the use of domestic goods or services.

By the way, even actionable subsidies -- e.g., investment grants to domestic producers of a particular technology -- are, by default, "WTO legal". It's just that they may be challenged by another country if that country can make a convincing case that their economic interests are being adversely affected as a result of the subsidy. A successful challenge will typically lead to the imposition of a countervailing duty by the complainant, or (occasionally) the withdrawal of the offending subsidy.

These are only my personal opinions.

WTO definition of a subsidy

From Part 1, Article 1 of the Agreement on Subsidies and Countervailing Measures:

Article 1: Definition of a Subsidy

1.1  For the purpose of this Agreement, a subsidy shall be deemed to exist if:

     (a)(1) there is a financial contribution by a government or any public body within the territory of a Member (referred to in this Agreement as "government"), i.e. where:

        (i) a government practice involves a direct transfer of funds (e.g. grants, loans,  and equity infusion), potential direct transfers of funds or liabilities (e.g. loan guarantees);

        (ii) government revenue that is otherwise due is foregone or not collected (e.g. fiscal incentives such as tax credits)(1);

        (iii) a government provides goods or services other than general infrastructure, or purchases goods;

        (iv) a government makes payments to a funding mechanism, or entrusts or directs a private body to carry out one or more of the type of functions illustrated in (i) to (iii) above which would normally be vested in the government and the practice, in no real sense, differs from practices normally followed by governments;

         or

     (a)(2) there is any form of income or price support in the sense of Article XVI of GATT 1994;

         and

     (b) a benefit is thereby conferred.

All the types of transfers you describe above sound like they would fit the definition of "subsidy" to me.

So, say everybody in the US read Makansi's "Lights Out" (makes a great gift), and counter to his recommendations actually, there was a hue and cry to nationalize the grid. And there was domestic content legislation for rebuilding the grid. Would that be against WTO rules?

First, nationalization of the electricty grid ain't going to happen: apart from the political opposition it would encounter, the government doesn't have the cash. Second, even assuming such a fantasy is possible, whether or not local-content obligations would be against WTO rules would depend on whether the associated expenditure was considered a subsidy or government procurement. The rules relating to the latter are covered under the plurilateral Agreement on Government Procurement, which is less stringent on local-content preferences than is the ASCM.

I have a hard time believing that China, Japan, Europe, and oh, just about everybody does not have some sort of domestic content (could manifest itself as trade restrictions) for some of the goods in the country, particularly those bought by the government.

In a paper I wrote a couple of years ago (sorry, I don't have time at the moment to find a link), I pointed out that China did indeed have domestic-content requirements for its wind industry. That revelation came as quite a surprise to many OECD countries, and I presume led to them asking some hard questions. China is a member of the WTO, so it may have been flouting the prohibition.

I know of no remaining subsidies contingent on domestic content obligations in Japan or Europe, though it is always possible that some have gone unnoticed. But you are right, when it comes to government procurement (e.g., police cars and fire engines), preference is often given for local suppliers, though within bounds set by the Agreement on Government Procurement (especially relating to transparency in bidding procedures).

I assume we agree that it's absurd to exempt agricultural goods from these rules. So why were agricultural sectors able to get out of them but not manufacturing ones?

There is a long and convoluted history for the treatment of agricultural products under the GATT, and the WTO Agreements. It would take too long for me to go into that now. But the decision to keep the negotiations on liberalizing trade in environmental goods in the negotiating group on non-agricultural market access (NAMA) was one of those "administrative decisions" taken early on in the negotiations, which started in 2002. Naturally, Brazil and some other Latin American countries have a different opinion on the interpretation of the negotiating mandate.

These are only my personal opinions.

Not all green jobs are America's jobs

I have skimmed the study referred to here, and it seems to follow the same approach taken by other ones I have seen that make the case for the job-creation benefits of renewable energy: it pretends that the United States exists in isolation from the rest of the world. That is to say, the study does not take into consideration that some of the wind turbines, solar cells, ethanol, energy-efficient cars and so forth might be imported. (Of course, some might be exported also.)

Importing some of the country's renewable energy technology is not in and of itself a bad thing. California's first boom in wind power in the 1980s was built largely around imported wind turbines. Nowadays the country has a larger wind-turbine manufacturing capacity.

But exaggerating job benefits by assuming that all the manufacturing stimulated by growth in "green technologies" would take place within U.S. borders is not helpful to anybody.

These are only my personal opinions.

Colin

Nobody is suggesting throwing people into poverty. What the five nations have in mind, and economists, is switching to more targetted support. The transfer efficiency (roughly, the ratio between expenditure and benefits) of broad-based subsidies that simply keep down the domestic price of fuels consumed by everybody, is usually meagre, especially in respect of the target group (poor people). You say that phasing out subsidies will destabilize the economies of developing countries. Many others would argue that trying to resist the tide of rising oil prices is destabilizing these economies ... to the financial breaking point.

These are only my personal opinions.

Hapa

I agree about the PV potential, and have written on it myself. See, for example "Liberalisation of Trade in Renewable-Energy Products and Associated Goods: Charcoal, Solar
Photovoltaic Systems, and Wind Pumps and Turbines".

I cannot answer your question of how much household, local, regional, and national replacement could be done how soon. Anybody else care to answer?

These are only my personal opinions.

You think there isn't waste from fuel subsidies?

Jonas, numerous case studies have shown that subsidizing fuel prices generally (as opposed to more targetted support for the poor, or at least poor consumers) is an inefficient way to help the poor, and typically benefits most those who have the capacity to take most advantage of the fuels. And if the prices are lower than neighbouring countries, some of the benefit leaks out through smuggling.

These are only my personal opinions.

A gem of a comment, John B

And I really mean it.

These are only my personal opinions.

What, no more flex-fuel Hummers?

Gee, what a shame: no more flex-fuel Hummers. Those people who sell the "ethanol guzzler" bumper stickers (not to mention ethanol producers) are going to be disappointed!On GM considers selling Hummer brand posted 1 year, 5 months ago 5 Responses

Why does Detroit deserve a big bail-out ... again?

The big U.S. automakers knew what they were doing when they cultivated and pursued the market for SUVs and big pick-up trucks. And, as documented in Keith Bradsher's monumental study, High and Mighty -- SUVs: The World's Most Dangerous Vehicles and How They Got That Way, they (along with the unions) fought tooth and nail to maintain all the special regulations (including the "dual-fuel loophole") and import protection that advantaged production of those vehicles.

That was their gamble. They lost.

These are only my personal opinions.

Black Wallaby

It would be helpful if you could itemize what questions you feel have remained unanswered.

These are only my personal opinions.

Huh?

Java Earth, you write:

Of course we should use animal poo for their high Nutrient content - but that does not mean we need to kill the animals for it. In, fact it would be better to not kill them, so they can make more Nutrient.

Please explain. For any area of grassland, or area dedicated to growing crops to feed herbivores, there is a maximum carrying capacity. In conventional livestock farming systems, animals are born, eat, poop, grow, poop, breed (perhaps), poop, and are killed before they die of old age. If one simply let them instead live until they die of old age, once that maximum carrying capacity is reached the farmer would be faced with two choices: (a) do something to keep them from over-breeding; or (b) eat them or let them be eaten. Either way, the amount of food they eat and turn into manure would be no more than under a conventional system.

These are only my personal opinions.

Indeed, Tom

As you write:

Yes, Ron, we can recycle nutrients through composting -- though wouldn't the human waste now going into sewers have to come into play? Ehhh. We can and must also use "green manure" -- legumes, which have the magical power to fix free nitrogen from the air into the soil.

William Vogt, in his 1948 best-seller, Road to Survival, pointed out repeatedly that we were flushing away vast amounts of nitrogen down the toilet. Vogt's solution was to return human dung to the soil. But to paraphrase Wendell Berry, the genius of modern households was to take a solution and create two problems. Because our feces and household chemicals end up in the same place, applying sewage sludge to soils over an extended period can lead to the build-up of some undesirable chemicals and heavy metals in the soil.

Perhaps one thing we need to do urgently is to make composting toilets cool?

These are only my personal opinions.

Canis

The "Covenant of the Wild" thesis says nothing about HOW the animals are treated (apart from the idea that the trade-off for the animals is to accept human protection from other predators in "exchange" for eventually being killed and eaten by their protectors). The thesis, at least as propounded by Budiansky, is that this relationship evolved without conscious fore-thought. That is to say, humans did not set out from the beginning to domesticate sheep or cattle. The relationship evolved through symbiosis.

The (I gether in your view, ugly) fact is, our human ancestors evolved as omnivors. Raising livestock (or fish) was an alternative to hunting (and fishing). Many cultures -- both hunters and herders -- have stressed the importance of treating animals kindly or with reverence while they are still alive, even though in the end they may kill them and eat them. You may feel that humans should now move beyond that, but we cannot deny that livestock raising has been an integral part of agriculture from the dawn of civilization.

My understanding is that crop nutrients CAN be recycled without manure -- e.g., through composting -- but moving to that model will require training a lot of farmers in how to do it optimally.

These are only my personal opinions.

And the ethanol gravy train keeps on chugging

Gosh, BioD, that was a magnum opus! And thank you, JMG, for your response to 1-2-3.

VK putting major money at risk? Let's look at that. As I explained in a comment I wrote in response to an interview with Khosla published on these pages on 22 April, there is not very much risk in Khosla's investments in ethanol. (Links to sources can be found in my original comment.)

VK's best-known investment, Range Fuels (formerly Kergy Inc.) of Broomfield, Colorado, will be granted up to $76 million by the federal government for their plant being constructed in Soperton (Treutlen County), Georgia. So a large amount of the capital cost of the plant ($1.55 per annual gallon, based on the original proposal for 40 million gallons of ethanol per year and 9 million gallons per year of methanol) will have been underwritten by the federal government.

In addition, according to an article in the Atlanta Constitution, Treutlen County offered tax abatements and a 97-acre tract in its industrial park worth $350,000. And the state's OneGeorgia Authority, which uses tobacco settlement money for rural economic development, was (in February 2007) likely to approve a $6 million grant for Treutlen County to help Range Fuels buy production equipment. The company has also benefited from a 4 percent sales tax exemption for materials and equipment used to construct biofuel facilities.

Now, let's look at the economic viability of the plant once it is operating. At the time construction commenced, Range Fuels could count on the price of ethanol being elevated by a combination of the 51¢ per gallon federal volumetric ethanol excise tax credit (VEETC), an import tariff of 2.5% plus 54¢ per gallon, and a renewable fuels standard that kept growing every year. In addition, because during Phase I the plant will produce only about 20 million gallons of ethanol and methanol per year, it would have qualified for the additional 10¢ per gallon small ethanol producer tax credit on the first 15 million gallons a year it produces.

But Range Fuels was no doubt hoping Congress would increase the subsidies for its product even higher. Congress obliged, creating a new, $1.01 per gallon producer tax credit for each gallon of qualified cellulosic biofuel production, in the latest Farm Bill (SEC. 15321 -- CREDIT FOR PRODUCTION OF CELLULOSIC BIOFUEL: page 590 of H.R. 2419 [PDF], the Food, Conservation, and Energy Act of 2008).

Unlike the the VEETC, which is paid to blenders (and benefits foreign producers), the cellulosic biofuel producer credit is available only for biofuel produced in the United States and used as a fuel in the United States. (Note to Tom Philpott: it would appear that the per-gallon amount is reduced by the VEETC and Small Ethanol Producer Credit as long as these remain available.) And cellulosic ethanol producers received a waiver from the 15 million gallons per year limit in respect of the small ethanol producer credit.

Nice work if you can get it ...

These are only my personal opinions.

Global production of biodiesel, oils & fats

According to the prospectus for a study by Emerging Markets Online, global production of biodiesel has grown from around 2.5 million metric tons to 9 million metric tons (around 10 billion litres) in 2007, mainly from edible oils, and a smaller amount from animal fats and used cooking oil. EMO forecasts global biodiesel production to be 11.1 million metric tons (around 12.6 billion litres) in 2008. Actual production capacity is three times that.

Total production of edible oils was around 125 million metric tons (142 billion litres) in 2007, and could rise to 129 million metric tons (147 billion litres) in 2008. One-third of that is palm oil.

I cannot find recent figures for rendered animal fats and greases, but this source estimates that production was around 15.6 million metric tons in 2005. Let's assume that increased to 17 million metric tons (around 19 billion litres) in 2007 and will be at about the same level in 2008. That would put total global production of vegetable oils and rendered animal fats and greases at around 146 million metric tons (166 billion litres) in 2008.

Biodiesel would thus account for 7.6% of total global production of vegetable oils and rendered animal fats and greases. Round up for straight vegetable oils (SVO) used as a fuel, and let's say the total use for fuel comes to roughly 8%.

It would appear, therefore, from USDA-FAS statistics, therefore that biodiesel production has accounted for some 1/3 of the 25-30 million tonnes (approximately 25%) increase in demand for vegetable oils and rendered animal fats and greases since 2003/04.

That may not sound like much, but at a time when demand for competing crops for land is also growing, it is significant.

These are only my personal opinions.

Subsidies are being phased out?

Jonas,

Thank you for a constructive comment. But I am would challenge your statement that farm subsidies are being phased out in the North. As Tom Philpott has been pointing out in his blogs, the latest Farm Bill passed by the U.S. Congress essentially maintains the status quo. Meanwhile, the cost to the U.S. Treasury of the volumetric ethanol excise tax credit (and a similar one for biodiesel), because it increases in proportion to volumes blended, will continue rising. If one considers the total cost of farm payments AND the VEETC (not to mention state-level subsidies), subsidies to agriculture in the USA are on a trajectory to INCREASE, not decline.

Yet just 18 months ago, some people in the U.S. Administration (e.g., the U.S. Ambassador to the EU) were saying confidently that rising commodity prices (for which at the time he and the industry were giving full credit to biofuel demand) would enable deep cuts to be made in agricultural subsidies. It didn't happen that way. (Surprise, surprise!)

The European Commission is talking about (gradually) reducing its subsidies, but is already running into opposition from the usual quarters. I would be reluctant to forecast the outcome before the dust settles.

Solar photovoltaics is one of the few technologies for which clear provisions for their phase-out after certain objectives have been achieved were included in several countries' policies (e.g., Japan's for roof-top PV).

But the nature of agriculure is that once subsidies are introduced, especially production-related subsidies, rents get generated that raise the price of land, which then makes it difficult to phase out the subsidies.

That is not to deny that temporary subsidies for crucial inputs, like the example you mention of Malawi's fertilizer and seed vouchers for small farmers, may nevertheless have a place.

These are only my personal opinions.

Yes, why isn't BSE more talked about as an issue?

The BSE (Bovine Spongiform Encephalopathy) and Creutzfeldt-Jakob Disease (Variant) break-out here in Europe started with including "downers" in the food chain. Doesn't America ever learn from what goes on outside its borders?

These are only my personal opinions.

Jonas, are you two people?

Or do you have a split personality?

Apart from your claim that "the more you drive, the more you would be solving climate change..." (though I guess what you're saying is that it takes a market demand for the electricity to encourage the building of biomass electricity plants), I wouldn't disagree with what you've written here.

If you are one person, why do you so often jump to the defense of people promoting liquid biofuels and the internal combustion engine?

These are only my personal opinions.

Mom & Pop cellulosic ethanol plants?

Maverick envisions Mom & Pop cellulosic ethanol plants popping up all around the countryside, based on switchgrass planted on "marginal" land, like CRP land and roadsides.

I think we need a good discussion on the likelihood of that happening. For the moment, at least, the economies of scale for cellulosic-ethanol plants are even greater than for corn-ethanol plants. You need all the fermentation, distillation and dehydration equipment of the conventional plant, plus a lot of fancy, up-front equipment to prepare the cellulose and hemi-cellulose (and separate out the lignin) to boot.

Then you need a place to store tons and tons of the feedstock in a way that won't let it get wet or catch on fire.

Harvesting is also governed by economies of scale, and consolodation. The more dispersed the harvested area, the more costly it is to harvest the required amount to feed the plant.

Look at maps of CRP land (that which is not quickly reverting back to the production of food or feed crops) and you will notice that a lot of it is in relatively narrow strips, and some of it is on relatively steep slopes.

And does anybody know what the policies of the Highway Departments of the various states are with respect to growing and harvesting switchgrass on the road margins? There is a reason why they prefer short grasses: drivers can see across them, and can pull their vehicles off onto them in an emergency.

Yes, we can overcome all of these problems through big enough subsidies. But shouldn't the country stop and take a collective breath and ask what alternatives one could procure for $1.50 or $2.00 per gallon of gasoline equivalent?

These are only my personal opinions.

Beer a bad example

No oil means no more beer -- ever.

Not true. Beer has been brewed since the time of the Egyptians. I agree with Matt G: there will always be beer.

These are only my personal opinions.

Well put, John Bailo

It amazes me that bicycle riders should be so scorned in this day and age. We are using the least energy of all modes of transportation. Drivers should only honk at us to say "yes, thank you for doing that...I wish I could...maybe someday..."

I spend a lot of time talking with policy wonks from many countries. Whenever the topic of ways to deal with "the transport problem" comes up, and I or somebody else mention bicycles, that suggestion is typically met with a snort of derision and a shake of the head -- as if the person making the suggestion is some sort of green loony with his or her head in the clouds.

Yet one can point to numerous countries and cities wherein bicycles have made a real difference -- The Netherlands, Copenhagen, Geneva, Zurich, Bogota and Portland, for a start. Even though the potential for reducing fuel consumption through greater urban bicycle use is real and tangible, it gets far less attention than biofuels.

Good, therefore, to see a major Presidential contender acknowledging the potential offered by that simple, yet elegant technology.

These are only my personal opinions.

Who's the slippery one?

Jonas,

You deny saying that the articles in Science concluded that "all biofuels have a big carbon debt."

I said the media concluded this.

No you didn't. You left who was saying it vague, leaving an impression that it was the authors of the articles that reached that conclusion.

Then you write:

The authors represent speculative thinking that cannot be expressed in scientific terms. ... Nobody can empirically pinpoint the extent of the land-use changes induced by the price pressures resulting from changes in biofuel output.

Um, Searchinger et al. used the Iowa State model, other results from which have been treated with respect. And I would call modelling the effects not merely speculative thinking but working through their thinking in scientific terms. True, nobody can exactly quantify the extent of the land-use changes induced by the price pressures resulting from changes in biofuel output, but that caveat should apply equally to the people that you like to quote who produce estimates of enormous untapped land for biofuels. (How many of them factor in water as a limiting factor?)

That the media draws its own conclusions from scientific studies is nothing new. At least it -- and we -- now have those scientific studies to debate. Two years ago, when all reporters had to go on was statements from biofuel advocates, the mainstream media was falling all over itself in adulation, repeating any exaggerated claim the biofuel industry cared to make. So for those of us who have been following this debate for some time, what we see is just the usual and predictable swing of the media's pendulum, not some conspiracy by the oil industry.

But to return to the topic, pointing to indirect effects is NOT the same as saying you "could" grow potatos in Greenland to make biofuels. You then defend this reasoning by claiming that "the vast bulk of biofuels is produced on low-carbon land, and actually may even act like carbon sinks."

Again, you miss Searchinger et al.'s point. It is not just the direct land-use effects that count, but the indirect. One may indeed produce corn or canola on low-carbon land. But if new, high-carbon land is cleared to make up for those displaced crops, that should be a cause for concern.

Also, Searchinger et al. and others are, properly, looking at what is coming down the pipeline, which are much, much larger mandated levels of use and (because of trade barriers) probably production in the north. It is proper to ask what would happen under those scenarios, and not simply point to the land use patterns of 2005.

These are only my personal opinions.

Ah Jonas, where to begin?

You hardly do yourself justice, using falacious arguments to try to debunk the critics.

Let's just start with the two articles in Science. Neither the Fargione et al. nor the Searchinger et al. articles concluded that "all biofuels have a big carbon debt." What they concluded was that the biofuels they examined could have a big carbon debt -- a finding with which I had thought (up until now) you would agree with.

Second,you have clearly missed their point, especially in the article by Searchinger et al., which was that the distinction between direct and indirect land-use effects is largely irrelevant: biofuels have an effect on land conversion through pressure on prices. We have seen that most strongly in the market for vegetable oils. Already, around half of the EU's rapeseed crop is used for the production of biodiesel, and in the U.S., increased planting of corn (largely at the expense of soybeans) in the 2006/07 season, combined with increased use of soybeans for biodiesel in the USA, has helped in the doubling of the price of all vegetable oils over the last two years, and an expansion of soybean area in Latin America and palm oil in south-east Asia -- some on previously forested land.

Finally, yes the Argonne scientists have posted a critique. But according to one of the authors of the Searchinger et al. article (with whom I have been in correspondence), after Searchinger provided Science with a rebuttal of their points, Science decided not to publish the Argonne letter, as they thought it did not meet their standards for publication.

These are only my personal opinions.

Jonas, be more precise

Without getting into the debate over how much potential there is for cellulosic ethanol to substitute for gasoline, even if one believes that there are great breakthroughs waiting to be made in bringing down the cost of producing cellulosic ethanol, those breakthroughs will come through R&D.

What this bill does is, effectively, subsidize consumption of cellulosic ethanol, through a tax break to blenders (which, in the presence of trade barriers, essentially ensures that most of the production will take place domestically). It also gives more than double the tax break to cellulosic ethanol as to cane-based ethanol from Brazil, which has an energy balance and carbon footprint similar to that of cellulosic ethanol.

It is legitimate to ask whether a blender's credit is a cost-effective way of encouraging R&D on cellulosic ethanol. Look at the one that has been benefitting corn ethanol: it, in one form or another, has been around in the USA since 1978 -- i.e., for 30 years. The cellulosic-ethanol tax credit may be scheduled to end after "only" seven years, but given the history of policy in this area, why should anybody assume that it won't be extended?

Yet if production costs really do come down, the industry will still benefit from a $1.01/gallon tax credit.

Now, multiply $1.01/gallon times your chosen share of an annual gasoline demand of around 140 billion gallons a year, and you can readily see how much this one subsidy will cost the U.S. treasury after a few years.

Despite what Jonas says, it is not simply a case of tax credits or nothing. No country can afford to subsidize itself off of oil by simply subsidizing an alternative to be sold at the same price as the fuel it is replacing.

These are only my personal opinions.

Wish list

1. Ability to edit comments after hitting the "Post" button.

2. RSS notifications of comments (not just new blog articles) by other commentators on the same article.

These are only my personal opinions.

Simply ...

...amazing. But I'm glad to hear that Mike is still in the race!

These are only my personal opinions.

Subjunctive, please

"... if it weren't for you meddling kids!"

(Somebody has to maintain standards around here.)

These are only my personal opinions.

Um, don't forget cancer

Nuclear buddy, you must be using a very narrow definition of "injuries" when you say that "Even the Chernobyl accident, which was worse in many ways than any meltdown that can be envisioned for an American reactor, caused no injuries outside the plant." [My emphasis]

According to this BBC report (sorry, I can't quickly find the original source):

The nuclear disaster at Chernobyl has produced the biggest group of cancers ever from a single incident, according to UK and US scientists. Almost 2,000 cases of thyroid cancer have resulted from the reactor explosion at the Ukrainian power station 15 years ago.

The elevated risk of thyroid cancer appears to continue throughout life. Researchers predict that the number of cancers is sure to rise further in years to come.

Granted, cancer of the thyroid is easier to treat than many other cancers, and one's chance of recovery is good. Perhaps even the rate of cancers induced from radiation eminating from normally operating coal-fired plants in Europe has been higher than that (I have no idea). But it makes you look as if you are being highly selective in your facts to say that there were no injuries outside the Chernobyl plant.

These are only my personal opinions.

Energy content is a less contentious basis

Screw the theoretical values for energy content

I know that transport economists prefer well-to-wheel comparisons (per km driven) to well-to-tank analyses (per MJ), but the latter are not "theoretical" -- they can be measured precisely. (The differences among the values seem to be whether they are being expressed in terms of higher or lower heating value).

By contrast, for a well-to-wheel comparison, one has to assume a particular vehicle model; moreover, keeping "all else equal" when comparing the fuel economy of a vehicle powered by a spark-ignition engine (gasoline, ethanol) with one powered by a compression-ignition engine (diesel, biodiesel, straight vegetable oil) as well as with different fuels, can be tricky.

That's why I suggest keeping it simple and comparing fuels on the basis of their energy contents.

These are only my personal opinions.

Making the calculation simpler

Great post, BioD. And you make the point, at least to me. Don't know how many readers understood, it is Jimmie Powell, national energy expert for The Nature Conservancy, who concludes that "it [i.e., biodiesel] could turn out to be a good story", not that dirty hippie, Duff Badgley.

I've seen this time and time again: reporters cannot resist ending on a smiley-face note. And that usually involves a quote either from a spokesperson for the industry, or a sympathetic voice within the NGO community.

In this New York Times article, published in January, for example, I was the first of the "experts" quoted. But the journalist could not help but conclude with an upbeat ending, quoting from Jean-Philippe Denruyter, global bioenergy coordinator at the World Wide Fund for Nature in Brussels:

"In general Europe and the U.S. will have to move away from vegetable oils," Mr. Denruyter said. "But even with these crops, if you have the right incentives you can improve the greenhouse gas profile a lot."

I always love that phrase: "with the right incentives you can ... ". With the right incentives -- i.e., enough of other people's money -- somebody, I'm sure, could breed pigs that will fly.

One simplification, BioD, if you want to run your calculation again, or elsewhere. Why not just use the different (lower) heating values of ethanol and biodiesel? Oak Ridge National Laboratory shows, respectively, 23.4 MJ/liter and 33.3 - 35.7 MJ/liter. The values for biodiesel vary, according to feedstock. (Another source I have, for which I can't find a link at the moment, shows 21.15 MJ/litre for ethanol and 32.36 MJ/litre for soy methyl ester.) Either way, the usable energy in ethanol is about 66% that of biodiesel. So your equation becomes:

0.66*413.1/61.95 = 4.4 times more land than corn to produce a gallon of soy methyl ester (soy biodiesel), assuming a gallon of SME per gallon of soy oil.

If you want to round down to 4 (up from 3.64 in your results), you'd still have the same order of magnitude.

These are only my personal opinions.

In what county and state do you live, Russ?

The places I know in the USA impose all manner of zoning restrictions and anti-nuisance ordinances on land-owners. Yes, there are exeptions like Houston, with its lack of a formal zoning code, but even it places restrictions on land use.

Note to Tom: Sorry, I realize we've now REALLY gone off topic!

These are only my personal opinions.

Whoa, hold on there, Canis!

Methinks your imagination is getting carried away! First, there are plenty of sovereign investors in U.S. assets -- notably, investments by the Saudi Royal family in the US oil, transport and financial industry -- including, I feel fairly certain (but cannot quickly provide a reference to back it up), in farmland.

Just because a company is state-owned doesn't automatically give it diplomatic or other special privileges. Such privileges must be given in the first place by the host government, and normally pertain only to diplomatic missions and military bases. I would imagine that the investments referred to by Tom, Jonas and the ones I mentioned would be treated like foreign investments by private entities: subject to taxes, and subject (at least in law) to environmental regulations.

Many of the answers to the questions you raise -- e.g., whether the companies could they be sued by their Brazilian or Indonesian workers or business partners, in Brazilian or Indonesian courts -- are typically set out in bilateral investment treaties (BITs), of which a quick search on UNCTAD's "Investment Instruments Online" web page shows already exists between China and Indonesia (but not yet, it appears, between China and Brazil).

No, entry onto their land would not be equivalent to a border crossing. And I think I've explained why, unless the Brazilians or Indonesians confer such status, the status of the land would not be the same as that of the land on which Chinese embassies and consulates are built.

These are only my personal opinions.

Correction

I meant to say, of course, that comparative advantage is "... one of the most venerable, and most misunderstood, concepts in economics."

These are only my personal opinions.

I see 6.66 x 10^9

That's 6.66 billion in American English. In the British, French, and German systems, one trillion equals 10^18. However you cut it, I don't see a trillion.

These are only my personal opinions.

Sorry, n

I hadn't seen it among the displayed links.

These are only my personal opinions.

The details are what matter

I suggest that you all have a look at this excellent analysis undertaken by leading energy-subsidy authority, Doug Koplow.

His PowerPoint presentation (PDF file) starts off with a comparison of the rhetoric and the actual outcomes of government support policies for the two industries, and then turns to a discection of the planned new 1600-MW nuclear power plant at Calvert Cliffs, Maryland.

These are only my personal opinions.

Interruptible power

Joseph, years ago I suggested to the (then) IEA's expert on electricity that one way to shave peak demand would be to allow not just industrial but also residential consumers to pay a lower electricity charge for putting up with interruptible power. She dismissed the idea as unworkable, but in this day and age, with sophisticated communication networks and control devices, is it such a dumb idea?

Here in France, in order to increase the capacity utilization of their nuclear-based power grid, consumers are encouraged to use appliances at night. (EDF charges about 60% more for electricity consumed between 7 AM and 11 PM.) Electric water heaters are on a switch that gets turned on at 11 PM and then goes off at 7 AM (these can be over-ridden by the home-owner, if they so desire). And many dish-washing and clothes-washing machines have built-in timers, so that the owner can program them to turn on in the middle of the night, to take advantage of the lower electricity tariff.

That is not the same as signing up for unpredictable, interruptible power, but I would imagine the signal technologies would be similar. Presumably, different packages would be offered. For people worried about food spoilage from having refrigerators or freezers turned off for too long, they might (for example) sign up for a plan that guarantees no more than 1 hour of interruptibility at any one time -- say, for no more than 10 days a month. I could imagine that devices could be created that would ring a bell in the home to let the consumer know that an outage was imminent.

Do you know whether any electric utility has ever tried this? If not, have you ever heard anybody discuss the idea?

These are only my personal opinions.

Horse sense

Jonas, you really can't believe we'd let this response by without comment:

Sometimes I don't understand what all the fuzz about biofuels is about.

In the past, we fed huge amounts of biofuels to horses. I once read that up to a quarter of all agricultural output went to feeding inefficient traction animals (both for use in agriculture and for transport).

If you don't understand what the fuss about biofuels is all about, then you clearly have absorbed nothing of what people have been saying here. First and foremost, the fuss is about current biofuel policies, especially in the industrialized countries -- how they have been designed and implemented.

Second, when people in the industrialized north were last growing feed for work horses, the populations of North America and Europe were much smaller than they are today. And horses were usually given pasture to graze in. Pasture = grass, which is a good land use from a carbon-balance perspective (not a concern a century ago).

But, for what it is worth, the Land Institute did an interesting analysis a few years ago that included a comparison of traditional Amish and conventional agricultural systems in the United States.

Towards the end of the article the authors compare two "sustainable" sources of farm power: horses and biofuel-fueled tractors. They conclude that:

"corn-based ethanol and horse feed would require roughly the same area of cropland for traction to farm the nation's cropland, but on a net energy basis, the former area [i.e., for ethanol] would be more than twice the latter."

These are only my personal opinions.

Horses for courses

Jonas, could you be more precise about the "waste palm oil" to which you are referring? If you mean waste cooking oil from palm, that's great, and more power to them. But I imagine the volume of waste cooking oil that country, as elsewhere, is pretty limited. Still, the point is valid: locally produced biofuels are most likely to find a local market first in remote, land-locked countries, where the cost of importing and transporting petroleum products is expensive.

Brazil is a special case, meriting a longer response. But let's not forget that: (a) Brazil's sugar cane industry is, and has long been, by far the most efficient in the world (it truly is the Saudia Arabia of sugar); (b) even so, ethanol benefits from significant excise-tax preference compared with gasoline; (c) the blending of ethanol is mandated by the government (between 20% and 25%); (d) private diesel cars are prohibited; (e) the production of biodiesel in Brazil is subsidized, and its consumption is mandated; the program is a nicely designed social program, but most of the vegetable oils being converted into biodiesel there come from big soybean producers, or imports.

These are only my personal opinions.

Huh??

green8659 writes:

Maybe we can use this ethanol to make US a superpower with corn.

Last year -- a record year -- the United States produced 13 billion bushels of corn. Current analyses assume (gross) yields of about 2.6 gallons per bushel of corn. Let's be generous and assume that can be boosted to an average of 2.8 gallons/bushel. That means that, if all of the nation's corn kernels were to be turned into ethanol, the total yield would be 36 billion gallons per year.

In 2007, the U.S. consumed 142 billion gallons (3.39 billion barrels) of finished gasoline. Its consumption of all finished petroleum products was 283 billion gallons.

Thus, on a gallon-for-gallon basis, 36 billion gallons of ethanol would displace 25% of domestic consumption of gasoline, or 13% of total finished petroleum products.

A more appropriate comparison, however, is on an energy-equivalent basis, since ethanol has about 67% the energy content of gasoline. But let's assume, because of ethanol's higher octane content, that the effective energy penalty is just 25% and not 33%. That still means that converting all of the current corn crop to ethanol would displace only 19% of domestic gasoline consumption, or 10% of total finished petroleum products.

At some point in the future, some of the cellulose and hemi-cellulose in corn stover could be turned into ethanol as well. But the amount that could be harvested sustainably is not as large as some people imagine:

To quote a USDA report from 2007:

[W]hen you add soil organic matter concerns to erosion concerns, it slashes the amount of cornstalks available for conversion to ethanol. For example, 213-bushel-per-acre corn yields leave farmers an average four tons per acre of cornstalks after harvest. Farmers could then harvest about two tons of cornstalks per acre for conversion to ethanol--but only from land with low erosion risks, using little or no tillage.

If the same farmers rotate with soybeans as recommended, they can only remove half again as much biomass for ethanol production, or just one ton per acre, to compensate for the lower biomass left by soybeans.

So, say that in the future, ALL corn farmers sell (on average) one ton of corn stover per acre for ethanol production. At a theoretical yield of 113 gallons per ton, and (let's be generous), an assumed 90 million acres planted to corn, the theoretical production of that would be around an additional 10 billion gallons a year.

I must remind readers that that is a GROSS, theoretical yield. Some of the biomass harvested for the cellulosic ethanol production would be needed to provide the process heat for the plants. And, of course, some fuel would be needed to power the tractors that plant and harvest the corn, and transport the corn kernels and stover to the processing plants. And, of course, I'm not allowing for the possibility of wide-spread drought or pestilence.

But ignoring all that, what we are left with is a maximum ethanol yield from corn (including its stover) of around 12% (= 0.75 * [36 + 10] / 283) of domestic consumption of finished petroleum products, on an energy-equivalent basis --  significant, but hardly enough to turn the United States into an energy superpower.

Oh, and I forgot to mention: with all the corn going into ethanol production, there would be none left for exports, animal feed, or for processing into products for human consumption.

These are only my personal opinions.

Try $8 per gallon

That's what we're paying already now in France. Prices for gasoline have long been higher in Europe and Australia than in North America, thanks to much higher gasoline taxes. And the efficiency of the car fleet is, no surprise, much better.

These are only my personal opinions.

An important point is

The federal tax on gasoline is not just an excise tax, like the ones in Europe and Australia, which raise significant funds for the government's general use: it is a hypothecated (earmarked) tax that funds the Highway Trust Fund. That is to say, it is essentially a user fee to help cover the wear and tear on the nation's highways. (A small portion of the funds also go to help finance mass transit.)

Even with those revenues (and others, coming from truck-related taxes on truck tires, sales of trucks and trailers, and heavy vehicle use), every several years the U.S. Congress has to find additional money to finance the building of new roads, and to repair infrastructure, like bridges.

So giving a tax holiday would be tantamount to robbing Peter (general taxpayers) to pay Paul (disproportionally, people who drive gas guzzlers, or commute from distant suburbs, often both).

These are only my personal opinions.

Whoops!

Here's the link for the Stiglitz interview.

These are only my personal opinions.

On transport, electricity and picking winners

Obviously, for some people, private, long-distance transport will be what is most important. But many people manage to get along OK on a combination of short-distance private transport (walking, canoes, bicycles) and communal transport.

For others, the small luxuries that electricity can offer -- lighting (especially for school children),a water pump, a radio -- are paramount.

I'm surprised, Jonas, that you talk here as if solar power is an all or nothing proposition. There are small industries already emerging in the poorer areas of Asia producing affordable, single solar cell units tied to a small storage battery and LED lights -- enough for a child to illuminate a book at night.

But back to transport. To the extent that the demand for private motorized transport may increase in countries like Africa, why will it necessarily be based on a heavy internal combustion engine? The alternative is not just electric vehicles carrying large batteries.

There is also compressed air.

I kid you not. There are now several companies around the world that are working passionately to produce small (and in some cases not so small) private vehicles that run on compressed air. One of the better known ones is MDI International. It still seems to be struggling (as are many technology start-ups, including those working on cellulosic ethanol), but it has already negotiated an agreement with India's Tata Motors (nice photos), and talks about going into production within the next couple of years.

The idea of using compressed air to power vehicles is not new. People began looking into it in the 1970s. The big breakthroughs have been mainly in: (1) the development of stronger, lighter materials; (2) the development of lighter, more-efficient engines; and (3) the development of carbon-fibre air storage tanks -- which have to be able to hold compressed air at very high pressure -- that merely split and do not explode when they are damaged.

The company has claimed that it can produce the car for a price that is a lot, lot less expensive than a Prius or Chevy Volt. And filling up the tank costs a $2 or $3 of dollars, not $20 or $30. Or so they claim. (The air would normally be compressed by an electric pump, but presumably could also be done by a wind-powered pump.) Whether that will come to pass or not, I have no idea.

The point is that there are people working on all kinds of alternatives, and some of them involve technologies that would mark a radical departure from the internal combustion engine. Let's not encourage governments to place all of their bets on something that perpetuates the ICE over all others.

As for your specific question, I would not agree with your assessment. Costs of solar PV cells have been coming down (see this chart from the U.S. Dept. of Energy), and efficiencies going up. And though big amounts of private money have been flowing into cellulosic ethanol only within the last half-decade, governments and university labs have been doing research on the topic since the 1970s.

Finally, you seem to use the term "biofuels" in reference not only to liquid fuels made from biological materials, but also charcoal. I think that may be at the root of some of the confusion in this discussion.

These are only my personal opinions.

I agree with Jon

It is silly to dismiss solar technologies out of hand in developing countries. Solar water heating is pretty low tech. And (at least until subsidies in Germany helped drive the price of high-grade silicon used to make solar cells from $25 per kilogram in 2003 to around $400 today), developing countries were among the fastest growing markets for PV systems. These systems have, naturally, found their use first in remote areas where other alternatives would be costly.

Jonas, you started out with a typical knee-jerk defense of Vinod Khosla and the bio-energy industry writ large. If you would count to 10 and listen to what people here are saying, which is not (for he most part) to automatically condemn appropriate biomass technologies for developing countries, like biogas, or even some liquid biofuels where they make sense, you might find that we are not as far apart as you make us out to be.

None of us know for sure what technologies will win the race at the end of the day, nor do we know what the price of oil will be in 2012. (Some think it will fall.) Let's keep options open, agreed. But that is not the same as defending every last policy supporting anything remotely related to your chosen solution, Jonas.

These are only my personal opinions.

I wish people would stop referring to ...

... "the free market" in agricultural products. There is an international market, and there are domestic markets, and there is a varying degree of price transmission between them. But the world is far from having a free market in food or any other agriculture-derived products.

So why repeat the phrase, "the allegedly free market", Tom? Alleged by whom? Certainly not by any economists I know! If the market were already free (which does NOT mean without environmental, health and safety standards and safeguards), the Doha multilateral trade negotiations would have finished a long time ago!

These are only my personal opinions.

David

Um, these numbers say nothing about relative production costs. (And Journey to Forever has a longer list of oilseed yields.)

One of the reasons (besides subsidies) that soy biodiesel exists is that the oil was initially a by-product of the much more abundant and valuable meal. And soy is what farmers in the Midwest are accustomed to growing in rotation with corn.

Lester Brown seems to love sugar beets. But he clearly has not studied its economics, which are poor. The industry survives here in Europe only thanks to government support. (Unlike cane, for example, there is no bagasse that can be used to co-generate electricity.) A couple of years ago, the USDA's Economic Research Service looked once again at sugar-based ethanol in the United States, and declared it uneconomic (even with the $0.51/gallon blenders' credit).

And don't forget, sugar beets are a row crop, which means they exert a heavy toll on the soil. A lot of soil is displaced when it is harvested, also. Here in France, the highway authorities have to erect signs out in the northern French countryside every autumn, warning motorists to watch out for slippery patches of mud (and squashed beets) that cover the road in places.

Finally, the net (non-fossil) energy yield for switchgrass -- still only produced in pilot-scale plants -- may be much higher than for corn, and half as good as sugarcane, but the process is much more capital-intensive, which drives up its unit costs considerably.

These are only my personal opinions.

What I find interesting

Is how during the biofuel industry's salad days of 2005 and 2006, one of the strongest arguments proffered by its boosters (like Vinod Khosla) was that its demand for crops would eliminate surpluses and increase prices, thus obviating the need for subsidies. Ted Turner, benefactor of the UN Foundation, even made a keynote speech to the World Trade Organization (in September 2006), asserting that the higher prices thus generated would break the impasse at the WTO, enabling a new deal for agriculture to be hammered out, and a new trade round concluded.

Of course, the industry failed to point out that its own subsidies would in a few years surpass those that it obviated (in the United States, that point could be reached by the middle of the next decade), but on the claim that biofuels would boost crop prices, they were certainly right.

The problem, of course, is that the industry got greedy, over built, and started pushing for even LARGER mandates. Meanwhile, apart from sugar, prices for starch-based biofuel feedstocks (corn) and oil-based feedstocks (soy, canola), and crops displaced by the expansion of those feedstocks, kept rising. But governments in the north saw that as a GOOD THING, so did nothing to slow it down.

As we now see, that train came crashing into a set of other converging factors -- like rising oil prices, like increasing taste for meat in Asia -- that were also helping to drive up commodity prices.

But now that those prices are spiraling out of control, the industry is running for cover and shouting -- "Nope, not us! It's that other guy's fault!" It was taking credit for rising crop prices just two years ago. It should stand up and admit that it is part of the problem now.

These are only my personal opinions.

Interesting that Jonas cites Rabbinge

According to this report:

Rudy Rabbinge, professor in sustainable development and food security at the Wageningen University, concluded in his presentation on 18 December 2006 for the Koninklijke Landbouwkundige Vereniging that current biofuel crops are not efficient energy producers and require vast surfaces of arable land that will not be available for other purposes, such as food production. He strongly pleaded for the development of C4 crops (trees and biomass producers) that are more efficient energy converters, limited production of crops such as Jathropha in developing countries, and the valorization of waste. [My emphasis]

More recently, Prof. Rabbinge has had this to say about biofuels:

"Fuel for the rich or food for the poor?" was how Rudy Rabbinge, professor of sustainable development at Wageningen University, put this dilemma at a debate on biomass from developing countries in The Hague in March 2007. Rabbinge believes that biofuel and food are incompatible. In his opinion, only unused plant remains should be used to generate energy, provided that it meets the sustainability criteria set out by the Cramer Commission, chaired by Professor Jacqueline Cramer of the University of Utrecht, now the Dutch environment minister. In other words, biofuel production must not involve the loss of agricultural land, and it must not threaten food production, biodiversity, or the welfare of workers. Above all, it must have a positive impact on CO2 emissions, according to a life-cycle analysis.

Rabbinge believes that biofuels are unlikely to help reduce CO2 emissions to a significant extent. "You need artificial fertilizer to grow potatoes", he explained in a telephone interview, "and it takes energy to grow and transport the elements of the fertilizer. So the net reduction in CO2 emissions from converting starch to ethanol is very small." [My emphasis.]

Even I wouldn't go so far as to say that biofuel and food are incompatible. (Perhaps he was quoted out of context.) But I'm not the probable next head of the FAO, either.

These are only my personal opinions.

I'll bite this off one point at a time

Jonas writes:

The war against biofuels - if successful - will kill hundreds of millions people, who saw biofuels as their only shot at tapping new agricultural opportunities. They have tried cotton for your jeans, but your government cheated; they have tried baby maize for your birthday parties, but prices collapsed; they have tried flowers for your granny, but the Dutch cheated. Biofuels, at last, bring hope to the world's farmers in the South, because here they have a clear competitive advantage, based solely on agroecological factors.

War against biofuels? You are conflating criticisms of current policies with criticisms of biofuels full stop. If biofuels were competing with other means of providing propulsion, without the government mandates, then the discussion we would be having would be very different. No government (except perhaps in a developing country, mirroring the recent export restrictions on grains) is going to prevent farmers selling their cane or corn to biofuel processors. So any notion that you have of criticism of biofuels leading to bans on biofuels is just plain silly.

There are some people who can never imagine any good biofuel, but that is not from where most people are coming.

Many are rightly concerned about the collateral damage, including for the environment, from over-exuberant promotion of biofuels, however. Some importing nations are trying to allay those fears by promising that they are developing sustainability standards for biofuels. But that is almost tantamount to closing the door after the horse has bolted -- adding sustainability standards AFTER they had instituted subsidies and mandates, instead of the other way around. They know, and we know, that it will be many years before those standards take effect. And they are going to have a devil of a time trying to deal with indirect effects caused by the displacement of food production.

By citing the past experiences of developing countries in producing cotton, baby maize and tulips for the North, you are only providing further evidence for the sceptics. If Big Ag and northern protectionist policies were the order of the day for those other product, what gives you so much confidence that the same model won't be repeated in the case of biofuels? Look at the foreign investments in biofuels in Brazil and Indonesia, for example: they are dominated by some of the biggest players in the business.

Sorry, but I'm not persuaded by your reverse Murphy's Law: If anything can go right (with biofuels), it will.

These are only my personal opinions.

Ditto to what "In the belly" says

I read Jonas's reply earlier, and was girding myself to spend at least an hour responding point by point to his comments. You have done a public service, BioD, and saved me a lot of time. Thank you, sir.

Just one additional comment, on rice. A couple of weeks ago, U.S. News & World Report provided a good analysis of the current situation:

Since the first of the year, additional jumps in food prices [i.e., beyond those caused by "record fuel prices, ethanol production, unprecedented demand, the effects of climate change"] have bred not only uneasiness and widespread fear but also, in recent weeks, extreme responses. Countries in Asia and South America are clamping down on exports or banning them, often at the behest of panic-stricken leaders worried about inflation. Further down the supply chain, savvy farmers and producers are hoarding food to delay its sale. In a sense, the unfolding scene is a sort of "prisoner's dilemma" known in game theory: Individuals (and individual countries) are moving to protect their own interests--"defecting" rather than cooperating--as supplies become more precious.

The effect, some analysts say, has been to drive the market cost of food--rice and wheat, in particular--even higher and to further destabilize countries at risk of violence and hunger. "A lot of these countries [with bans] have poor populations, and they're worried about inflation, and they know that if they keep supplies high, they can lower costs," said U.S. Department of Agriculture economist Andy Aaronson. "That's just supply-and-demand economics, but it's a psychology that's going to have to break."

...

Rice, which is the staple food for roughly half of the world's population, or more than 3 billion people, has been particularly affected. China, Vietnam, and Egypt have imposed limits on the amount of rice they will export. India, at the end of March, banned "non-basmati" rice shipments outright and has continued to ratchet up the minimum price of basmati exports, which are known for their higher quality. Thailand, the world's largest rice exporter, is reportedly flirting with the idea of doing the same, even as its farmers toil to plant a third crop of rice this year, one more than usual. Wheat, too, has seen the scythe of political maneuvering: Last week, Russia extended for 60 days a ban on wheat exports. China and Argentina have adopted restrictions; in Pakistan, where farmers have just begun to harvest the annual wheat crop, officials yesterday said the country most likely will fall millions of acres below the expected goal, prompting the government to dispatch soldiers to guard grain elevators. "Now that the market is so nervous, governments get more nervous," said Joachim von Braun, director general at the International Food Policy Research Institute. "In addition to export bans, they try to build up storage to be on the safe side, and governments become part of the speculators."

A correspondent who follows commodity markets wrote to me, "Most countries in Asia intervene in rice markets to one degree or another, including protecting domestic production, so it is a very thinly traded commodity, which in turn makes the "world" price highly volatile to any shock. The link to wheat is apparently that India had a bad harvest and so restricted rice exports to substitute rice for wheat in domestic food aid programs."

So, in short, as BioD says. There are factors other than biofuels that explain the particular case of rice. Still, the general tightness of the food market is a contributing psychological factor to the panicy, "beggar thy neighbour" policies being adopted by a growing list of countries.

These are only my personal opinions.

Reality check

Somebody needs to remind people like VK that the world does not stop at the U.S. border. Whereas oil and labour costs may account for a significant share of food costs in the USA, where the diet consists of highly packaged, highly processed, and highly advertised foods, the biggest share of food costs when your diet consists of basic grains is the price of the commodity.

VK should (everybody should) study Slide # 32 of Joachim von Braun's PowerPoint presentation (500kb PDF warning) from February. Here are the price-effects for a Bangladesh five-person household living on one dollar-a-day per person:

First, this is how they spend their $5:

$3.00 on food
$0.50 on household energy
$1.50 on non-food items

A 50% increase in food and energy prices requires them to cut $1.75 of their expenditures

Cuts will be made most in food expenditures:

�� Reduced diet quality, and
�� Increased micronutrient malnutrition
�� Delay in wage rate adjustments

----------------------------------------------

Now let's consider his claim of imminent commercial viability of cellulosic ethanol. His best-known investment, Range Fuels (formerly Kergy Inc.) of Broomfield, Colorado, will be granted up to $76 million by the federal government for their plant being constructed in Soperton (Treutlen County), Georgia. So a large amount of the capital cost of the plant ($1.55 per annual gallon, based on the original proposal for 40 million gallons of ethanol per year and 9 million gallons per year of methanol) will have been underwritten by the federal government.

In addition, according to an article in the Atlanta Constitution, Treutlen County offered tax abatements and a 97-acre tract in its industrial park worth $350,000. And the state's OneGeorgia Authority, which uses tobacco settlement money for rural economic development, was (in February 2007) likely to approve a $6 million grant for Treutlen County to help Range Fuels buy production equipment. The company has also benefited from a 4 percent sales tax exemption for materials and equipment used to construct biofuel facilities.

Now, let's look at the economic viability of the plant once it is operating. To start off, it will benefit from the federal volumetric ethanol excise tax credit (VEETC) of 51¢ per gallon. In addition, because during Phase I the plant will produce only about 20 million gallons of ethanol and methanol per year, it will qualify for the additional 10¢ per gallon small ethanol producer tax credit on the first 15 million gallons a year it produces.

Range Fuels is also no doubt hoping on passage of H.R. 5351, which would provide an additional 50¢ per gallon tax credit for each gallon of qualified cellulosic fuel production -- in addition to the other tax credits mentioned above. This bill has already been passed in the House. It now goes on to be voted on in the Senate.

These are only my personal opinions.

Idea for a new photo-montage

These gave me an idea: what would the amount of corn used to produce ethanol in the United States looks like? The visual would look best expressed in cobs. I estimate that current production is running at 500,000 cobs per minute!

Here are my calculations and sources:

Number of cobs of dent corn per 100 kilograms of kernels = 364

Weight of a bushel of corn kernels, in kilograms: 25.22

Number of cobs to make one bushel of corn kernels = 364 x (25.22/100) = ~ 92

Number of gallons of ethanol per bushel = 2.7

Number of cobs per gallon = 92 cobs per bushel / 2.7 gallons per bushel = 34

Average daily rate of production of ethanol in the United States during the first quarter of 2008: approximately 21.4 million gallons per day

No. of cobs to supply 21.4 million gallons per day = 21.4 million x 34 = 727.6 million

No. of cobs consumed every hour to produce ethanol in the United States = 30.3 million

No. of cobs consumed every minute to produce ethanol in the United States = ~ 500,000

These are only my personal opinions.

Nor me, either

It used to work for me, perhaps a year ago. But has not since then. Perhaps that coincides with switching to the newer version of Explorer (with tabs).

These are only my personal opinions.

RE: smoking

Here, here! Eliminate the import ban on Cuban cigars. Light up and enjoy ... you're reducing your chance of contracting the West Nile virus (avian encephalitis), or dengue fever, or malaria  ...

These are only my personal opinions.

Let's not forget the possible down-side of DDGS

John Galt writes:

Processing these feedstocks to extract sugars or oils to make biofuels, makes the byproduct 'seed cake' and 'spent mash' more digestible as animal feed. Thus the animals get more nutrition from the byproduct than the original feedstock, and less is crapped out as waste.

In the case of dried distillers grains with solubles (DDGS) -- Mr. Galt's "spent mash" co-product from ethanol production -- the claim that it is "more digestible as animal feed" is debatable. First off, it is certainly LESS digestible for poultry and hogs. Cattle like it, and it may be as good or better for them than straight corn. But let's not forget that cattle have evolved to eat grass, not DDGS.

Moreover, there is growing suspicion that the increased use of DDGS in cattle feed is leading to increased incidence of E. coli 0157:H7 -- a a strain of bacterium that is responsible for sickening 73,000 people in the United States (among whom around 60 die from the infection), every year. As documented in this recent article:

In the past several years, the production of ethanol has increased sharply, as the US looks for ways to become more oil independent. But once grains like corn have been turned into ethanol, producers are left with distiller's grain. This has resulted in a symbiotic relationship between ethanol producers and cattle ranchers. Ethanol plants need a way to dispose of the grain left over from the manufacturing process, and cattle ranchers need an inexpensive  source of feed for their livestock. The arrangement has proved so mutually beneficial to ethanol producers and ranchers that often, ethanol factories are built next to feed lots.

This arrangement, however, could be having unintended consequences. Through three rounds of testing, researches at Kansas State found that  the prevalence of E. coli 0157:H7 was about twice as high in cattle fed distiller's grain compared with those cattle that were on a diet lacking the ethanol byproduct. No one knows why this is so, but what is clear is that as ethanol production has grown, more and more cattle are being fed with distiller's grains. This could account, in part, for last year's record recalls of E. coli tainted meat.

Grist's own Tom Philpott has written extensively on this problem. See here, for example.

These are only my personal opinions.

Tom is right, Pollan is not

I, too, very much respect Michael Pollan. (I'm not so familiar with the works of Alice Waters, though it sounds as if she's doing good stuff, too.) But I fail to see why high commodity prices help producers of sustainable agriculture.

Sure, high prices means that, all else equal, higher-cost producers have more of a chance of covering their cost. But, as sindark puts it, "don't forget about the land". Prices for commodities (especially wheat, corn and soybeans) that more than cover costs generate what economists call "rents", which then are reflected in the price and rental charges of farmland. (In Iowa, for example, average land values for farmland have more than doubled since 2000, and approached $4,000 per acre in 2007.) And, since sustainable or organic agriculture is land-intensive, as opposed to chemically intensive, that drives up their costs disproportionally.

Several months ago, I posted a link to an article about a group of Hmong farmers who were finding it increasingly difficult to be able to make the rental payments on land they had rented from a local corn farmer, and which they were using to grow organic vegetables for sale to local markets. The article is no longer available, but here is an exerpt from my posting:

Hmong farmers, who immigrated to the U.S. after the Vietnam War, grow vegetables using organic and biodynamic techniques on rented land in Minnesota. With the ethanol boom driving up demand for corn, the landowners are pushing the Hmong out, even though their farms are three times more profitable than a typical Minnesota farm.

(I presume the writer meant, "even though, prior to the ethanol boom, their farms WERE three times more profitable than a typical Minnesota farm.")

Partially offsetting the rising cost of land, perhaps, is the rising cost for synthetic fertilizers. But the markets for all fertilizers are connected, so any organic farmer looking for horse manure, say, is also facing higher input prices.

Finally, as illustrated by Tom's example, rising food prices eat into household disposable incomes. Many, if not most, people put calories first, taste and the sustainability of how their food has been produced second. All else equal, thus, sharply higher food prices favour consumption of the cheapest food items.

These are only my personal opinions.

Thanks, BioD

There's a nice explanation of the role of biofuel policies in this article, "Mass Starvation in a World of Plenty". Following an analysis of other factors (growing population, demand for meat), the article continues:

As we have described, the food market [in the middle part of this decade] was at the critical point of a cyclical re-adjustment. Food stocks were falling, demand was rising, and prices were trending upwards. Farmers got busier and supply started to react, trending upwards. Then came the rogue element. It entered the arena right at the critical moment. This rogue element dislocated the food market, moving what would have been a normal (and gradual) market adjustment of demand, supply, and price to a situation of severe dislocation, which can only be described as a global food shock --- as far as we know, the first in human history.

In the past, severe dislocations to the world food markets have occurred due to extreme weather --- and they have been relatively short lived. Not this time. Western governments, particularly the EU, the US and Canada have now adopted the view that the world was getting warmer primarily because fossil fuels were being burnt. The world, if it were to be saved, had to move radically and quickly to renewable fuel sources. The age of biofuel had come.

The effect of this has been to turn vast swathes of grain producing land into production hubs for the raw material to produce ethanol. The most commonly used raw material is corn. Consequently, a huge amount of grain has been suddenly removed from the world's food supply. So the world food aid people are right: more food crops are being produced than ever before--and there is theoretically no shortage. That is only half right. Yes, food crops are being grown, but it is being diverted away into ethanol production. Food is no longer food; it is fuel.

At a time when global food supply and demand were tightly stretched anyway, suddenly the world food market has been distorted by a giant politician-cum-green monkey wrench. The result: huge market dislocation and a global food shock.

They then quote Lester Brown: "Since the budgets of international food agencies are set well in advance, a rise in food price shrinks food assistance. The UN World Food Programme (WFP), which is now supplying emergency food aid to 37 countries, is cutting shipments as prices soar. The WFP reports that 18,000 children are dying each day from hunger and related illnesses."

For a more up-to-date report on the WFP's problems, see this article in the Los Angeles Times, "Food aid costlier as need soars."

These are only my personal opinions.

Thanks, Grey

The way that the biofuel industry and its cheerleaders pooh-poohs the effects of higher grain and oilseed prices on the food budgets of poor people, particularly the urban poor, really burns me up.

Bear in mind, it is not biofuels, per se that they are defending, but government subsidies, mandates and border protection that they are defending. If none of that existed, they would not have to defend their business (nor would there be much of a business to defend). We may be concerned about what soy production is doing to tropical forests but nobody is telling people not to eat soy.

But trying to cut off debate about the effects of biofuel demand on prices -- because other factors are contributing to the price rises -- is like downplaying the effects of war because most people die of disease.

These are only my personal opinions.

... Unable to pull out the cork,

she asked if anybody had a sabre. Thinking the young lady had asked for a "razor", Hillary came running over, but slipped on the spilled baby oil ...

These are only my personal opinions.

Here are the lyrics to the reggae version

After transcribing the lyrics from listening to the song several times, I just found a web site with lyrics (and other information) provided by the original artist.

Bio Fuel, crazy idea (Lyrics)
by Livebroadkast

Ad-lib: Hey, forget the Supermarkets.
Let us use Corn and Sugarcane to make Bio Fuel.
This is more profitable! Ha, ha, ha, haaaaa!

Bio fuel... will make us more hungry... bio fuel... crazy idea.

Evil men, with that wicked intention...
Where is your plan... for the next generation?

Evil men, with that wicked intention...
I say, "Where is your plan... for the next generation?"

Bio fuel use... is gonna burn up all my food Deforestation... can only mash up our nation.

Evil men, with that wicked intention...
I say, "What is your plan... is it life or destruction?"

Interlude: Bio fuel ... will make us more hungry ... bio fuel ... crazy idea.

Sitting very passive ... will only make things more massive.
We have got to stop them ... from destroying all creation.

Evil men, you have a wicked intention ...
I say, "Where is your plan ... for the next generation?"

Bio fuel ... will make us more hungry ... bio fuel ... crazy idea.

Burning up the food ... is gonna make more people hungry.
Cutting down the trees ... will only poison our air.

Evil men, with that wicked intention ...
I say, "Where is your plan ... for the next generation?"

Bio fuel... will make us more hungry... bio fuel... stupid idea.

Bio fuel use ... is gonna make food more expensive.
Deforestation ... is gonna mash up our nation.

Evil men, you have a wicked intention ...
I say, "What is your plan ... is it life or destruction?"

Bio fuel ... will make us more hungry ... bio fuel... stupid idea.

Bio fuel... will make us more hungry... bio fuel... crazy idea.

Bio fuel... will make us more hungry... bio fuel ... stupid idea.

Bio fuel... will make us more hungry... bio fuel... stupid idea.

fade...........

These are only my personal opinions.

For what it's worth

From "Survey: Top Choice for Truly Green Brand is Nobody":

When readers of Brandchannel.com were asked what brand they think of as truly green or going green, the top answer was no brand at all. Almost 20 percent of the 2,000 survey respondents said no brand is serious about being green. "There are attempts at establishing green credentials-but these attempts are happening in silos within brands and companies," says one reader's answer. "Very often, the 'green' aspect of the business is far outweighed by the 'non-green' areas."

The next top four choices was Toyota at 9.4 percent, BP at 3.3 percent, The Body Shop at 3.1 percent and Honda with 2.7 percent. The remainder of the respondents chose a variety of other companies, including General Electric, Virgin, Patagonia, Greenpeace, Whole Foods Market, Marks & Spencer, Apple, Wal-Mart, Starbucks, Innocent, Shell, BMW, Seventh Generation, Aveda and Clorox.

These are only my personal opinions.

Errors in the Grauniad article

For one, The Guardian uses confusing terminology. In the linked article they seem to be using the term "splash and dash" to refer only to round-trip shipments of biodiesel from Europe to the USA and back. Actually, the term "splash and dash" previously has been used to include shipments of ANY biodiesel, from any (foreign) source to the USA involving the addition of a small amount of petroleum diesel so that the whole shipment of biodiesel can qualify for the $1.00/gallon blender's credit. This is how Biodiesel Magazine defines it:

Splash-and-dash, a variation of "touch-and-go" trade, is the name given to the practice of shipping large volumes of foreign biodiesel into U.S. ports, topping biofuel-laden tankers off with a "splash" of petroleum diesel and "dashing" off to Europe where more subsidies await. Adding just one-tenth of a percent of petroleum diesel allows the importer--acting as the blender--to qualify for the U.S. federal biodiesel excise tax credit of 1 cent per percentage of biodiesel blended with diesel.

That shipments are making round trips between Europe and the USA is, however, news. The Guardian writes:

It is estimated that 10% of the 1 million tonnes of biodiesel exported from the US to Europe is part of the splash and dash trade.

It would be hard to imagine that ANY exports of biodiesel from the United States to Europe DO NOT benefit from the $1.00/gallon tax credit. Besides the fact that biodiesel producers everywhere are operating on paper-thin margins (because of the record-high prices of feedstock vegetable oils), why would a U.S. exporter forgo the tax credit if he or she was entitled to one?

Note, also that 1 million tonnes corresponds to about 300 million gallons. That is a huge percentage of U.S. production, which according to the folks at Iowa State University, was less than 500 million gallons in 2007. Some of those exports probably were re-exports of biodiesel from places like Argentina that stopped off in the USA, officially changed hands there (i.e., was "imported"), earned the $1.00/gallon subsidy through a splash of diesel, and then dashed (i.e., was re-exported) to Europe, where prices for biodiesel are higher than anywhere else in the world because of the high fuel taxes on petroleum diesel, from which biodiesel is fully exempted in some countries.

Whichever way you look at it, it is a crazy policy -- a costly loophole kept open only to keep U.S. producers in business. (At one point last year, Congress was going to close the loophole. It hasn't happened.)

In another error, The Guardian refers to the $1.00/gallon tax credit as an "export subsidy". That term should not be invoked lightly, as a true export subsidy would be "contingent, in law or in fact ... upon export performance" (which the blender's tax credit is not), and true export subsidies are prohibited under Article 3 of the WTO's Agreement on Subsidies and Countervailing Methods.

These are only my personal opinions.

RE: In fairness

And now BioD has added some pithy remarks on the NRDC site!

These are only my personal opinions.

Not nitpicking

I think that wind turbines in urban locations, especially where there is already lots of concrete, makes some sense. And small wind power has lots going for it.

But I do not think that we should ignore the concrete "footprint" of wind power, especially large, on-shore wind power. For 700 MWe of rated capacity (i.e., not even reliable capacity) -- the size of two combined-cycle gas turbine power plants, or a few geothermal power plants -- the amount of concrete in the bases would cover an area equal to 20 football pitches to a depth of more than 6 feet. Just because there is already lots of concrete covering the earth does not mean we should not be concerned about more being poured, especially if not all of them are used again (see my previous comment). It may be difficult to find some of them from Google, but on top of former ridges and out in cow pastures, they -- and their service roads -- are plainly there.

These are only my personal opinions.

Less concrete

An added advantage of some small wind turbines is that they don't necessarily require a concrete pedestal. Large wind turbines, by contrast, require something like 0.3 cubic metres of concrete per kilowatt of rated capacity. That's a lot of concrete when you start adding it up.

And what happens to that concrete when a large wind turbine is decommissioned? Usually it stays in the ground.

These are only my personal opinions.

David, what's your point?

These are only my personal opinions.

Yikes, multifunctionality!!

Tom, MF -- rechristened "motherfunctionality" by one ag economist I know -- has been hashed and rehashed on this side of the Atlantic for years, and is now much less invoked than it was a decade ago.

The idea that any economic activity generates multiple external benefits (but let's not forget about costs) is nothing new. What was clever -- for awhile -- was to come up with a new "feel-good" term that provided Europeans who were afraid of farm-policy reforms a new justification for continued agricultural support. But unifying slogans rarely provide a sound basis for policy.

First, MF is hardly unique to farming. Look at almost any profession and you will find that they perform services that are often not recompensed -- taxi drivers who dispense helpful advice to tourists, fishers who rescue stranded boaters, land owners of all types who plant flowers. Encouraging civic behaviour is generally better done through social norms than through subsidies. (For more on that, I recommend highly Swiss professor Bruno Frey's book, Not Just for the Money [PDF file].)

At the end of the day, we cannot avoid the need to justify supporting each public good on its own merits, and without prejudice. If there is public value in leaving land in its natural state for the sake of wildlife, or in maintaining the rural landscape, ALL land-owners should be able to compete for that service. Simply paying farmers, and only farmers, is inefficient and arbitrary.

I am also skeptical about the need to pay farmers to diversify their crops. Let's first see what happens when we stop subsidizing farmers to produce a narrow range of monoculture commodities, like the "program crops" (now called "contract commodities": wheat, feed grains, oilseeds, cotton, rice, sugar cane and sugar beets) currently favoured by support policies. In many countries where commodity-linked programs have been withdrawn, more-diversified horticulture has thrived.

Finally, the idea of subsidizing any producer -- farmer, chemical plant or coal mine operator -- to clean up their act (in the case of farmers, to reduce fertilizer use or pesticides) should be approached with extreme caution. Besides violating the "polluter pays principle", it can ultimately be self-defeating, unless the money is mainly used for research, extension and demonstration projects.

These are only my personal opinions.

Next joke

Disenfranchised Enviro writes:

It takes a long time to get an industry that produces 200 billion gallons per year built up. 1st generation feedstocks helped get things started, and when the 2nd gen feedstocks - cellulosic ethanol, gasification, F-T, algal biodiesel - finish R&D (with money from the success of the 1st gen feedstocks, remember) then the industry will really take off.

Well, his first sentence is right: the corn-ethanol industry has been subsidized for the last 30 years, and still can't stand on its feet. Producing more will drive up the cost even higher, as land for producing fuel competes more and more with land for producing food, feed and fibre. At around $1.00 per gallon in subsidies for ethanol (counting state as well as federal subsidies), and even more for biodiesel, the country would go broke trying to displace 200 billion gallons a year with biofuels.

R&D for 2nd-generation biofuels being funded by "money from the success of the 1st gen feedstocks". If you call biodiesel plants going broke, and ethanol plants soon to follow them, that is a bit far-fetched. In any case, a good chunk of the money is coming from Uncle Sam.

These are only my personal opinions.

The U.S.-Europe biodiesel nexus

Thanks for the continued coverage on this issue, Tom.

The Atlanta Constitution does not get it exactly right, however, when they say that "cheaper soy and palm oil from Asia, Africa, and Latin America increasingly replace domestically grown soy oil."

Soy and palm oil may be less expensive to produce in Asia, Africa, and Latin America than in the United States, but all producers are selling into a global market, at global-market prices. If foreign-produced vegetable oil is cheaper, it is only marginally cheaper. That means that it may be more profitable for investors to establish farms producing soybeans outside the USA, but it does not mean that imported vegetable oils are likely to prove to be a huge bargain for biodiesel producers.

Here are some figures from the FAO: two years ago palm oil was selling for $450 per ton, versus $540 per ton for soya oil (both prices north-west Europe). Today the two are selling for, respectively, around $1160 and $1400 per ton. That makes palm-oil methyl ester (POME) look cheaper on paper, but palm-oil makes a biodiesel that is inferior (because it tends to become more viscous at cold temperatures) to soy-oil methyl ester.

Rapeseed (i.e., canola) oil -- the main feedstock for European producers, and the highest-grade oil for cooking -- was selling at $720/ton two years ago; today the price is almost exactly double: $1434. In short: the relative price gaps of palm oil and soya oil have narrowed considerably vis-a-vis that of rapeseed oil, and soya oil is now selling at almost the same price as rapeseed oil.

I don't know where the Atlanta Constitution gets the idea that it is an "environmentally conscious Europe" that takes most of the U.S.-produced fuel. Demand for biodiesel here in Europe is as artificial as it is in the USA, increasingly driven by government blending requirements and generous tax exemptions. It is the combination of blenders' tax credits in the USA, and the much higher price for biodiesel in Europe (because petroleum diesel is taxed at rates that are so much higher than those applied in the United States), as well as the weakening of the U.S. dollar against the euro, that is driving this crazy and costly trade.

Finally, don't forget that the $1.00 per gallon federal excise tax credit for biodiesel is only one of several forms of support given to U.S. producers. Most producers using virgin oils or tallow as feedstock also benefit from the $0.10 per gallon Small Agri-Biodiesel Producer Credit, as well as state-level subsidies (an additional $1.00 per gallon in Kentucky, for example), and various ad-hoc investment incentives provided by local and state governments. It all totals up, according to Doug Koplow ("Biofuels -- At What Cost? 2007 Update on the United States"), to between $2.10 and $2.60 per gallon.

These are only my personal opinions.

Er ...

... yup, I guess that's true.

These are only my personal opinions.

Sign of the times: Biopact embraces biochar

Some of the readers here may be familiar with the very useful news-and-editorial site that for a couple of years has been promoting a Biopact on energy between Europe and Africa. While more thoughtful and targeted in their support of biofuels than many other sites, they have nevertheless always seen the silver lining in the biofuels cloud.

Well, on Monday, 10 March, they posted their final posting on Biopact. It makes interesting reading. Basically, they have decided to leave reporting on biofuels to others and to concentrate on promoting biochar production, especially in the poorest countries in sub-Saharan Africa. Here is an excerpt:

Biopact creates the Biochar Fund

Ideas and people come and go, debates shift and opportunities change. Over the past years Biopact has been instrumental in getting a simple message across: if biofuels are going to produced, it would be interesting to take the potential of the Global South into account. The message has added a perspective to a debate that has kept growing more complex and controversial. Biofuels for transport offer certain social and environmental advantages when they are produced in a smart way. But their (indirect) effects can just as well become so problematic that they outweigh these benefits.

...

There is a new land use strategy that could make more sense. It is based on biochar -- charcoal obtained from the pyrolysis of biomass -- used as a soil amendment. Biochar cures unhealthy soils and makes them fertile. This way, slash-and-burn farmers can halt deforestation, and grow more food and biomass. Biochar also doubles as a carbon sink for which credits are available.

If biochar is used as the central ingredient of a holistic development approach, it offers an opportunity to help end hunger amongst communities at the forest margins, it can help slow deforestation, it may contribute in a significant way to reducing emissions from land use change and it can be coupled to renewable energy production amongst people currently without access to modern energy services.

The Biopact sees an interesting opportunity in the concept. This is why it has created the Biochar Fund, a small social profit organisation aimed at rethinking ways to tackle the interrelated issues of hunger, deforestation, energy poverty and climate change. ... [The article continues.]

I wish them luck.

These are only my personal opinions.

Question about treatment of biofuels

Very interesting development, indeed, Alan.

You say, that it excludes non-fossil carbon that comes from the atmosphere and ends up in wood, other biomass, and biofuels, and that this is logically consistent.

Is that because the carbon in the diesel fuel used to plow, sow and harvest any feedstock crops grown in BC is taxed, as well as any fossil fuels used in processing the feedstock into biofuel in BC? I presume, however, that any biofuel imported from outside B.C. will not be taxed?

These are only my personal opinions.

That's the spirit!

Who cares about the limits of nature, and of the fundamental laws of physics. Anything is possible. Yes we can!

These are only my personal opinions.

Does ethanol have anything to do with it?

The boom in ethanol plants has also diverted resources, some of which, I would think -- like construction workers, welders, installers of monitoring instruments, etc. -- they would share in common.

Has anybody looked at this possible link?

These are only my personal opinions.

Confusing goods and services

These job-creation claims need to be regarded with a pinch of salt. There seems to be a mantra among the renewable-electricity community -- part of their selling point to members of Congress -- that renewable-energy technologies equals jobs, jobs, jobs, and only American jobs.

The USA is part of a globalized world. While most of the labour to install wind turbines and solar cells will probably be locally procured, the same assumption does not hold for the hardware. There are several newly-industrialized countries that are entering the business of manufacturing solar cells, modules, associated electrical devices, and all sorts of components for wind turbines. In addition to selling to their own markets, they will be looking for opportunities to export.

That should be regarded (in my opinion) as a positive development. But it means, as well, that it is time to tone down the rhetoric that takes as its starting point that the renewable energy business is a strictly domestic affair.

These are only my personal opinions.

Don't get your knickers in a twist over this one

I note that the fabric is manufactured in France. That is appropriate, because rayon fiber -- originally marketed as "artificial silk" -- was first invented (by one Hilaire de Chardonnet) and then developed in that country in the 1880s and 1890s. (No, I did not transpose the "8" and the "9".) It was the original manufactured fiber.

Although most people consider rayon artificial, it is actually made from cellulose, unlike sythetic fibers made from petro-chemicals.

However, the mere fact that rayon is derived from trees does not necessarily make it "eco-friendly". As explained in this article:

Although rayon is made from wood pulp, a relatively inexpensive and renewable resource, processing requires high water and energy use, and has contributed to air and water pollution.

(Are they not confusing it with ethanol?)

I'm not a chemist, but I assume that the French manufacturer, g=9.8, uses a different process than one of the traditional ones used to make rayon.

The source article asks, "What will they think of next?"

Hmmm. Writing medium made from the pith of a wetland sedge?

These are only my personal opinions.

Thanks for the links, GreyFlcn

But the first one, of the graph comparing GREET with LEM, does not by itself explain anything about what assumptions were made about upstream emissions from petroleum. Neither does the source document.

What is interesting in the second link, however, is the very pertinent set of questions written in by the first commentator, who is identified only as Jer:

It would be interesting and informative, I think, if we could generate a world map of all 'abandoned agricultural lands planted with perennials' that create this so-called 'feedstock uptake credit' (greenhouse gas credit) that have the potential to be populated with the appropriate biomass. These techniques and approaches sound good in theory, but what is the overall potential when all areas are accounted for? Is there cost-effective access to each area? Does the ethanol produced in this way satisfy a significant portion of anticipated demand? What about the infrastructure to distribute?

Quite so. As I wrote earlier in this string, the term "abandoned farmland" is deceptive. Most of the land in the United States that was once farmed but no longer is, has since reverted to other uses, either rangeland or forest. (Much of that land was abandoned many decades ago precisely because it was unsuitable for farming on a sustainable basis.) And a reasonable amount has been gobbled up for homes, roads, golf courses, etc.

Jer in the above quote asks the right questions. Somebody needs to take a hard look at the remaining "abandoned farmland" and start winnowing down what of that could actually produce harvestable biomass on a sustainable basis ... and I mean economically as well as environmentally, even after accounting for differences in environmental externalities between bio-energy and its alternatives.

These are only my personal opinions.

Correction

The quote (the numbers in brackets have been added by me) should read:

... Our analysis permits the direct comparison of two different scenarios in the 2016 crop year: 55.84 billion liters [15 billion gallons] of U.S. ethanol from corn and 111.76 billion liters [30 billion gallons], a rise of 55.92 [billion] liters [15 billion gallons].

Note that although the total they model for 2016 is larger than mandated, the increase they model is only 2.5 bgy more than the growth in "Renewable Biofuel" (10 bgy) plus "Undifferentiated Advanced Biofuel" (2.5 bgy) -- basically, biodiesel -- between 2006 and 2016 mandated under the Energy Independence and Security Act of 2007.

These are only my personal opinions.

Sorry, I meant Erik, not Eric

These are only my personal opinions.

Is that a retraction, or a correction, RD Miller?

You have accused other readers of inaccuracies and pursuing hidden agendas. That obliges a high standard of evidence and accuracy on your part.

I repeat: you wrote

Switchgrass and other potential feedstock sources for cellulosic ethanol can be planted without negative impact on abandoned farmland (of which there is something like 200 million acres in the U.S.) [my emphasis]

The last time I looked, switchgrass is not a tree. But maybe what you really meant to say was:

Trees for cellulosic ethanol can be grown without negative impact on abandoned farmland (of which there is something like 200 million acres in the U.S.), much of which has since reverted back to forest.

Perhaps. But the trees growing in most of the nation's private forest land already have economic value. If they may some day have greater economic value as a feedstock for liquid fuels, and less is available for pulp, timber and fuel for power plants, so be it.

But the market has NOT been left to itself: Congress has passed legislation mandating minimum levels of biofuels, mainly ethanol, including specific minimum volumes for cellulosic ethanol. That skews the allocation of resources to that use. Moreover, both the federal government and many state governments subsidize the construction of cellulosic ethanol plants and the production of fuel -- at a combined rate of over $1.00 per gallon (over $1.40 per gallon of gasoline equivalent).

Given that is the case, any raitionale for both mandating cellulosic ethanol use and subsidizing it has to stand up to scrutiny.

Scrutiny is, I thought, what Gristmill was about.

These are only my personal opinions.

I agree with Sean

These are only my personal opinions.

An interesting perspective from Worldwatch

To quote from "Nano hypocrisy?:

One car gets 46 miles per gallon, features fancy accessories, and sports two engines with a combined 145 horsepower. The other car reportedly gets 54 miles per gallon, runs on a diminutive 30-horsepower engine, and is positively spartan in its interior trimmings. The first is a darling of the environmentally conscious. The latter is reviled as a climate wrecker. These two vehicles are the Toyota Prius and the newly unveiled Tata Nano, dubbed "the people's car." Is there a double standard?

As the article concludes, "The change needed is more than a matter of technology. It requires questioning shortsighted personal choices by consumers who buy unnecessarily large or powerful vehicles, as well as confronting the auto and oil companies that derive enormous profit from the status quo."

These are only my personal opinions.

Petroleum prices not driving market for biodiesel

I disagree with Patrick Mazza's assertion that the high price of crude petroleum is driving the demand for biofuels, at least as regards biodiesel made from virgin vegetable oils. The price of petroleum is indeed high, but so are the prices of vegetable oils. It is not absolute prices but relative prices that matter.

According to the U.N. Food and Agricultural Organization's (FAO) international commodity price reporter, the international price of crude palm oil (CPO) has more than doubled since January 2006, and now stands at $950 per metric ton. The latest prices for soya oil and rapeseed (canola) oil are, respectively, $1,164 and $1,386. Translating these prices into volumetric terms (at a specific density of around 0.88), we have the following:

Feedstock    $/litre    $/gallon

Palm oil ...   0.84      3.16
Soya oil ...   1.02      3.88
Rape oil ...   1.22      4.62

That is the price of feedstocks before processing into biodiesel, which step adds around 20% to costs.

Lets compare those prices with the latest spot price for crude petroleum (Brent): around $90 per barrel, or $2.14 per gallon ($0.57 per litre). That crude has to be processed also to turn it into diesel. Heating oil (which is similar to diesel fuel) futures are currently trading at $2.50, which is a 17% mark-up on the price of crude. So let's round that up to 20% so that we can make it simple and compare one feedstock (vegetable oil) with another (crude petroleum).*

At current international prices, the main feedstocks for biodiesel are 48% to 115% higher ($1.73/gallon higher in the case of soya oil, the main feedstock in the United States) on a volumetric basis than crude petroleum. But biodiesel has only about 92% of the energy density of petroleum diesel, so on an energy-equivalent basis they are around 60% to 135% higher than petroleum diesel ($2.07/gallon of diesel equivalent higher in the case of soya oil). Assuming a petroleum price of $100/barrel would only drop those numbers to 44% to 111% higher ($1.83/gallon of diesel equivalent higher in the case of soya oil).

So, if producing biodiesel from pure virgin vegetable oils is so expensive, why is it being produced at all?

The answer, in two words: subsidies and mandates.

From Brazil to the EU, from Indonesia to several states in the United States, governments have mandated minimum blending ratios (typically 2% to 5%) for biodiesel. Some (like Indonesia) enlist state-owned petroleum companies to sell it (in Indonesia at a substantial loss in revenues), and many others provide substantial subsidies.

In the United States, the federal excise tax credit for biodiesel made from virgin agricultural products is $1.00 per gallon. Many states top that up with producer payments, blenders' credits, reduced fuel taxes, and even reduced sales taxes. Kentucky, for example, adds their own $1.00 per gallon subsidy to the federal subsidy, bringing the total subsidy for a producer in that state to $2.00 per gallon ($2.17 per gallon of diesel equivalent). Nowadays, that just barely covers the difference between the cost of the feedstock and the (before tax) market price for diesel-like fuels.  

So please, people, when you make an assertion that oil prices are driving this market, look at the other factors (feedstock prices, subsidies, mandates) as well.

There is no way, at current feedstock prices and crude petroleum prices, that biodiesel production would be viable were it not for the mandates and subsidies.

Eliminate those, and all the hand-wringing about how to make biodiesel production sustainable would become moot.

-------------------

*Industry experts will no doubt point out that biodiesel manufacturing yields a byproduct, glycerin, the sale of which can help offset some of the high cost of producing biodiesel. But the global rise in biodiesel production has created a glut of crude glycerin, sending the price of that commodity into free fall. For the purposes of this exercise we can ignore it.On Scientist says biofuel boom endangers world's largest rainforest posted 1 year, 10 months ago 24 Responses

David Roberts: closet Republican?

David, you almost nailed it on the Republican side (the spread for McCain was only slightly larger than you predicted). Did you have inside knowledge, or are you just naturally attuned to the thinking of Republicans?

;-)On New Hampshire prediction, guaranteed accurate to the tenth decimal posted 1 year, 10 months ago 3 Responses

RE: banning gas hogs

John Rynn writes:

[I]f one were willing to think about radical policy alternatives ... instead of CAFE standards for the whole national car fleet, you ban cars under a certain mile per gallon: start at, say, 20 miles per gallon and then keep going up.

There is already precedent for such a policy: minimum energy-performance standards (MEPS) for electrical appliances. Within specified categories of air conditioners, freezers, refrigerators, etc., you just cannot buy ones that do not meet the MEPS. Of course, at the same time, there is nothing preventing people buying, say, a walk-in freezer and installing it in their home.

Do I think establishing a MEPS regime for vehicles would be politically feasible in the United States? Nope. Even in Europe, an individual can buy a Hummer. But you would have to mortgage your home to afford the fuel (now over $8 per gallon in most countries), and try finding a legal parking space for it!On When is a Tundra a better buy than a Prius? posted 1 year, 11 months ago 47 Responses

Thanks, Joseph

I read your complete article over at Salon as well. Good stuff.

It will take a few more years, I fear, before people with real political influence finally take notice at what the U.S. Congress and the President have wrought. But by then it will be too late.

At least, I'm glad to see, the cost of the RFS is starting to sink in, albeit slowly. Over at (brave) KARE television, in Minneapolis, they have interviewed University of Minnesota research fellow Doug Tiffany, who notes that the government will most likely have to expand ethanol subsidies to support the huge increase in production.

No sh*t, Sherlock!

"I think some of the subsidies will have to be reformulated so that they favor the processes that use cellulose," he said.

How much will that cost taxpayers? Tiffany said numbers like $100 billion, or higher, are realistic.

"These numbers are not impossible with respect to the kind of magnitudes that are mentioned in this bill," he said.

At current levels of subsidies, annual use of 15 billion gallons a year of corn ethanol would cost the U.S. Treasury, just in tax credits, $7.5 billion per year.

For the remainder, we have already seen proposals for a new tax credit, worth $1.01 per gallon, for ethanol made from crop residue and other sources of plant cellulose. That fell out of the Energy Bill, but may be included in the Farm Bill. If such a payment survives, then we are looking at an extra $21 billion in tax credits for cellulosic ethanol (much of which could still end up being produced from corn -- just other parts of the corn plant than the kernels) per year by 2022. That adds up to $28.5 billion per year.

By the way, there is a moderated, on-line debate on biofuels that U of California's Dan Sperling and yours truly have started over at the International Transport Forum's web site.On A new piece on the insanity that is U.S. ethanol policy posted 1 year, 11 months ago 7 Responses

Well put, Ekirky

How refreshing to learn of a member of Congress with backbone.On Notable quotable posted 1 year, 11 months ago 5 Responses

On the unreliability of experts to predict

Odograph quotes the New Yorker review:

Tetlock also found that specialists are not significantly more reliable than non-specialists in guessing what is going to happen in the region they study. Knowing a little might make someone a more reliable forecaster, but Tetlock found that knowing a lot can actually make a person less reliable.

I don't know if that is a verifiable scientific prediction, but I have certainly witnessed the phenomenon.

Back in August 1990, when Iraq invaded Kuwait, sending the price of crude oil sharply upwards, I was working for the International Energy Agency (IEA). Those of us not on vacation at the time started speculating about at what price crude might peak, and when. So we polled each other.

A month later, the price peaked. The guy closest to the oil markets, who had previously worked for years on a commodity exchange, trading oil futures, had complete confidence he would win. He came nowehere close. The winner was the IEA's librarian.On Economists cannot predict the future posted 1 year, 11 months ago 69 Responses

Answer to Martha's question

My understanding is that there are few "free range" colonies of Apis mellifera (the European honeybee) left in the wild -- certainly not enough to make much of a difference. Bumblebees and solitary bees, to my knowledge, have been unaffected by the hive disorders that have plagued the honeybee.On Why bees and pigs are not machines posted 1 year, 11 months ago 12 Responses

Specifics, Growthbuster?

Growthbuster,

You and a number of other contributors to these web pages speak of the need to "optimize the size of our population on the planet". My question, is what do you have in mind?

Some people point to empowerment of women, and how that leads to fewer children per couple, or the effects of increasing urbanization on family size, and suggest that population will take care of itself (eventually) if these trends continue. I presume you're not in that camp?

Are you making an appeal for voluntary restraint in family size? If so, how effective do you think such appeals will be? Or do you think that family size should somehow be controlled centrally, by economic incentives or force? If so, is it realistic to think that democracies will ever agree to such an idea?On Economists cannot predict the future posted 1 year, 11 months ago 69 Responses

Sorry for being dense, Mr. Cowan

But your statement here is too concise for me to understand what you're getting at:

If government guarantees the construction loans, it can't profit by betraying the environment; the natural gas revenue it would gain is offset by its having to pay off the loans.

Could you please elaborate on this?On The terrible omnibus bill posted 1 year, 11 months ago 4 Responses

The world is complex

First, BioD, thank you for a very well-argued and thought-provoking article. And thank you for your civil note to Jerry Taylor on the On Science vs. economics string.

It was beginning to dismay me that, having invited a guest to argue his case, readers immediately began attacking him in the most disrespectful manner -- as much for what they thought he represents as for the perceived holes in his arguments. The appalling lack of civility displayed on that string does not bode well for the future acceptance of such invitations by people whose views can be expected to differ sharply from those of the majority of Grist readers.

By contrast, your approach, including this post, is a model for the way that debate should be conducted.

----------------

I think that JMG is not entirely wrong when he describes economics as "a field that is dominated by the personalities of the folks running the show". Of course, other fields have had moments when personalities weighed heavy, and when there was disagreement over basic principles -- for example, plate tectonics in the middle decades of the 20th century, and some of the outlying theories of quantum physics even now. The problem for economics is that it remains constantly in such a state of flux. Of course, in that sense economics is not alone: think of the wide variations in advice from the medical profession concerning diet.

We should not confuse micro-economics -- which is the branch of economics that has the most to say on the design of policies targetted at individuals or narrow economic sectors -- with macro-economics (and especially the practice of economics that has to rely on large predictive models), much less the world of corporate finance, which I think is what many Grist contributors have in mind when they conjur up an image of their "economist" boogieman.

I would also agree (partially) with the point that JMG makes about an insufficient interest among economists -- that is to say, academic economists -- in "finding out how things actually work". Many do, of course, but at a rarefied level that frequently proceeds down obscure paths that require ever more complex equations that few people other than the authors themselves understand.

However, many practicing economists ARE very much interested in "finding out how things actually work". But they face, like anybody working in a social science discipline, numerous constraints on being able to conduct controlled experiments. Moreover, they are typically having to work with data that are imprecisely measured (unlike, for example, the measurements with which engineers work).

The question is, where does that leave us? Clearly (in my opinion, at least), we cannot dispense with the insights provided by economists. To do so would make policy even more prey to power politics and special interests. But I agree, BioD, that economists need to be clear that any predictions of the macro-economy that they make are subject to wide margins of error, and that the main value of their models is to organize the information in a logical way so that others may look at what happens when the data or assumptions are changed.

Just a final note: it is not only economists who have sharp differences about the carrying capacity of the Earth. Witness, for example, the ongoing debate among scientists trying to estimate the long-run potential for biofuels. At one end, we have the IEA Bioenergy Task Force 40 group, who predicts that by 2050 the world will be able to produce -- without deforestation and without an unnecessary food versus fuel debate -- 1300 exajoules (EJ) worth of bioenergy in a sustainable manner. That is around 6 times the total amount of oil currently consumed by the world.

At the other we have scientists like Sten Nilsson, Deputy Director of the The International Institute for Applied Systems Analysis (IIASA), who, using a slightly different approach (as reported in "Death of the Biofuel Dream?", New Scientist, 15 December 2007, pp. 7-8 -- subscription required), estimates that, after taking into account the land needed to produce food and forest products for a growing world population, there will be very little if any "spare" land that could be devoted to energy crops by 2030.

Keep probing the assumptions, is all I can say.On Economists cannot predict the future posted 1 year, 11 months ago 69 Responses

The best bags I've seen

(and use) are those you can purchase from L.L. Bean. To quote their web site:

Simply the toughest tote bag you can buy -- and a trusted favorite since the 1940s. Originally designed to haul ice "from the car to the ice chest," our ruggedly built Boat and Tote Bag has been tested in our lab to hold up to 400 pounds. Still made by us here in Maine from practically indestructible 24 oz. cotton canvas.

They last a very long time, and they used to be (I think, though I can't find it on their web site) guaranteed for life.On Retailers beef up the packaging posted 1 year, 11 months ago 3 Responses

Again, I couldn't agree more, Justlou

As for which research numbers will get used to prove a reduction in the life-cycle carbon budget, you can be damnded sure that it won't be Patzek and Pimentel's! My friend, Doug Koplow, thinks they will use the Greenhouse Gases, Regulated Emissions, and Energy Use in Transportation (GREET) Model, which is maintained by Argonne National Laboratories (and gives among the most favourable results of the different life-cycle assessments).

The feedstocks displayed on the GREET web page (corn, soybeans, sweet sorghum, cellulosic material) don't seem to include sugarcane, palm oil, or a host of other feedstocks grown in the tropics, though. While I assume the model can deal with these, fed the right parameters, somebody has to decide what parameters to use -- and you can bet that the Brazilians will dispute whatever they use, unless it allows them to export. As, well, as with any partial-model, I doubt it can deal with GHG emissions associated with the expansion of agriculture into forests and grasslands.

And thanks for the kind words, Patrick.On Once in place, the RFS will be nigh impossible to eliminate posted 1 year, 11 months ago 35 Responses