Pumped About Ethanol?

SEVEN REASONS TO THINK.

By Stacey Singer | Friday, August 17, 2007, 03:44 PM

Seven reasons Plasmid's thinking hard about ethanol:

1. Gas tastes bad.

In a free market, if farmers earn more planting biofuel crops, why would they plant food crops? Data suggests that agribusiness is going where the subsidies are.

The evidence:

Last month the German grain trading firm Toepfer International (part of ADM, Supermarket to the World) reported, "In the 2005/06 grain season, about 72 million tons of grain were used worldwide for ethanol production." The year before, the figure was 56 million tons. Vegetable oil is going to biodiesel, too. Said Toepfer: "A relatively quick end to the current high prices can only be achieved through record harvests in 2008."

2. Grocery bills will rise. Econ 101: Scarcity causes demand and prices to rise. Prices for staples like corn, meat and milk have risen fast this year. Dairy and grain products are up the most, as much as 5.5 percent for the year. From the USDA's July figures: "The CPI for all foodŠis now 4.1 percent higher than the June 2006 level."

> From the Food and Agriculture Organization: "Over the last two years demand for biofuels derived from grains, vegetable oils and other crops has risen sharply, affecting most of the agricultural markets. The production of ethanol has increased from 17.4 to 50.6 billion litres during that period. Therefore the boundary between the markets for food and fuel has blurred, and food prices are increasingly mirroring energy prices." - Jennifer Nyberg, Food and Agriculture Organization

3. Hunger isn't pretty: The hungry poor will be most vulnerable. The United States is the world's leading supplier of food aid -- about 4 million tons in 2005, according to the World Food Program. The leading recipient? Sub-Saharan Africa, which took in 4.6 million tons. Most of that food has been donated. The United States feeds 70 million people a year with all of its "excess" subsidized grain.

The Washington Post's Manuel Roig-Franzia wrote in January about the impact in Nezahualcoyotl, Mexico: "Mexico is in the grip of the worst tortilla crisis in its modern history. Dramatically rising international corn prices, spurred by demand for the grain-based fuel ethanol, have led to expensive tortillasŠ. ŠTortilla prices have tripled or quadrupled in some parts of Mexico since last summer. On Jan. 18, Calderon announced an agreement with business leaders capping tortilla prices at 78 cents per kilogram, or 2.2 pounds, less than half the highest reported prices. "

4. Thirst: Growing biofuel crops requires huge amounts of fresh water to irrigate crops. That's a resource that's already in short supply in many places. ( China, India face water risk from biofuel.) Climate change will worsen the fresh-water deficit.

5. Worse gas mileage: Cars don't run as efficiently on ethanol. Experts estimate that a 20 percent mix of ethanol in gas will cause engines to lose between 3.5 percent and 10 percent of their efficiency. (How will E20 affect your car, the environment?)

6. The pollution problem. Ethanol reduces carbon dioxide slightly, but increases carbon monoxide and nitrous oxides. For more on the chemistry, see The Use of Ethanol as a Fuel.

7. Food Security: Ethanol may reduce our dependency on foreign oil, but could it increase our dependency on foreign-supplied food? Does it matter? For another view, read William Saletan's provocative July 7 piece in Slate. He throws ethanol questioners in with Fidel Castro.