Wednesday, June 13, 2007

Lester Brown Warns Senate Of Biofuels Blunder

Jun 13: Lester Brown, founder and President of the Earth Policy Institute has released a document entitled, Biofuels Blunder, subtitled, "Massive Diversion of U.S. Grain to Fuel Cars is Raising World Food Prices, Risking Political Instability." The document is presented as a briefing before U.S. Senate Committee on Environment and Public Works, Senator Barbara Boxer (D-CA), Chair. Brown has been described as “one of the world’s most influential thinkers” and as “the guru of the global environmental movement.”

According to the document, "The escalating share of the U.S. grain harvest going to ethanol distilleries is driving up food prices worldwide. Investment in fuel ethanol distilleries has soared since gasoline prices jumped at the end of 2005. Once completed, distilleries now under construction could double U.S. ethanol output, turning nearly 30 percent of next year's U.S. grain harvest into fuel for automobiles. This unprecedented diversion of the world's leading grain crop to the production of fuel will affect food prices everywhere, risking political instability.

"The U.S. corn crop, accounting for 40 percent of the global harvest and supplying nearly 70 percent of the world's corn imports, looms large in the world food economy. Annual U.S. corn exports of some 55 million tons account for nearly one fourth of world grain exports. The corn harvest of Iowa alone exceeds the entire grain harvest of Canada. Substantially reducing this export flow would send shock waves throughout the world economy...

"Already corn prices have doubled over the last year, wheat futures are trading at their highest level in 10 years, and rice prices are rising. Soybean prices are up by half. If the United States were to suffer intense heat and severe drought this summer in the Corn Belt, rising grain prices could quickly take the world into uncharted territory.

"The countries initially hit by rising food prices are those where corn is the staple food. In Mexico, one of more than 20 countries with a corn-based diet, the price of tortillas is up by 60 percent. Angry Mexicans in crowds of up to 75,000 have taken to the streets in protest, forcing the government to institute price controls on tortillas...

"Since the United States is the leading exporter of grain, shipping more than Canada, Australia, and Argentina combined, what happens to the U.S. grain crop affects the entire world. With the massive diversion of grain to produce fuel for cars, exports will drop. What was for decades the world's breadbasket is fast becoming the U.S. fuel tank...

"The stage is now set for direct competition for grain between the 800 million people who own automobiles, and the world's 2 billion poorest people. The risk is that millions of those on the lower rungs of the global economic ladder will start falling off as rising food prices drop their consumption below the survival level."

Brown says there are alternatives to this "grim scenario," and they are to encourage a shift to more fuel-efficient cars and a new automotive fuel economy centered on plug-in hybrid cars and wind energy.He concludes, "Ethanol euphoria is not an acceptable substitute for a carefully thought through policy. Do we really want to subsidize a rise in food prices?"

Access the complete briefing statement (click here). Access the Earth Policy Institute website for additional information (click here). [*Energy]