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Apr 15, 2008

Biofuels, a Recipe for Disaster.

Back to Biofuels. The decisions by western governments to mandate or subsidize the production of ethanol could be one of the most disastrous blunders in modern history. Biofuels will be used without state intervention when and if they become economic in their own right.

Not since the communists with their ridiculous and grandiose great leap forward, and other forms of mass social engineering have entire nations created the circumstances for mass famine, warfare, social unrest, and economic chaos as this populist idea whose time has already passed.

Only intervention by governments has the power to cause such a vast shift of production and resource use to cause such massive disruption. Natural disasters tend to be localized to a region or if really serious a country, combined action by force of governments can and do affect the world.

ANDREW MARTIN, has written an article in the NY Times, “Fuel Choices, Food Crises and Finger-Pointing”, highlighting some of what is going on. (Quoted in part)

The idea of turning farms into fuel plants seemed, for a time, like one of the answers to high global oil prices and supply worries. That strategy seemed to reach a high point last year when Congress mandated a fivefold increase in the use of biofuels.

In some countries, the higher prices are leading to riots, political instability and growing worries about feeding the poorest people. Food riots contributed to the dismissal of Haiti’s prime minister last week, and leaders in some other countries are nervously trying to calm anxious consumers.

At a weekend conference in Washington, finance ministers and central bankers of seven leading industrial nations called for urgent action to deal with the price spikes, and several of them demanded a reconsideration of biofuel policies adopted recently in the West.

Many specialists in food policy consider government mandates for biofuels to be ill advised, agreeing that the diversion of crops like corn into fuel production has contributed to the higher prices. But other factors have played big roles, including droughts that have limited output and rapid global economic growth that has created higher demand for food.

Work by the International Food Policy Research Institute in Washington suggests that biofuel production accounts for a quarter to a third of the recent increase in global commodity prices.

According to the World Bank global food prices have increased by 83 percent in the last three years. Rice, a staple food for nearly half the world’s population, has been a particular focus of concern in recent weeks, with spiraling prices prompting several countries to impose drastic limits on exports as they try to protect domestic consumers.

Skeptics have long questioned the value of diverting food crops for fuel, and the grocery and live- stock industries vehemently opposed an energy bill last fall, arguing it was driving up costs.

A fifth of the nation’s corn crop is now used to brew ethanol for motor fuel, and as farmers have planted more corn, they have cut acreage of other crops, particularly soybeans. That, in turn, has contributed to a global shortfall of cooking oil.

Europe’s well-meaning rush to biofuels, scientists concluded, had created a variety of harmful ripple effects, including deforestation in Southeast Asia and higher prices for grain.
August Schumacher, a former under secretary of agriculture noted that many of the upheavals over food prices abroad have concerned rice and wheat, neither of which is used as a biofuel. This is totally wrong, a web page for Australian Biofuels Pty Ltd says as follows: -

The Condobolin Ethanol Project is planned to produce 200 million litres per year of fuel ethanol. The project will use a mixed feed stock of corn, wheat, barley and sorghum and will require 600,000 tonnes of grain per year at full production.

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