A week of news on ethanol and hunger

(Photo of cornfield from Flickr and photographer vampire_bear)

Weekly Angst: Not long ago some touted ethanol as an answer to fossil fuels. The Bush administration said it could save us from our “dependence on foreign oil.” In the U.S., for now, ethanol means corn – that’s what’s being produced and it’s popular in farm states like Iowa and Illinois. But scientists have pointed out life-cycle carbon emissions from corn ethanol are about as bad as from gasoline – and its potential supply is limited. Even Bush recognizes we need to move quickly to non-food, cellulosic products and the new Energy Bill calls for that to happen. But, recently an even greater concern has arisen. Corn prices have skyrocketed, farmers are switching from other crops, like wheat and soybeans, and now they are soaring in price too. Hunger on the rise as food costs grow and supply can’t meet demand. A series of news items over the past week tell us where we are right now with this dilemma.

News item: Midwest drought could spike food, gas prices
Increased dependence on corn and other grains for feed, food and fuel leaves the country vulnerable to a weather catastrophe that could cut supply and push prices up even more. The price of corn is already up 20% this year. Corn could reach $8/bushel (from $5.40 now) if a drought or heat wave hits the Midwest, experts say. A problem could occur as early as this summer, as global warming and La Niña increase the likelihood of drought. (LA Times, 3/2)

News item: Tough times for ethanol force shakeout
High corn prices are squeezing profits at small ethanol distillers. Production capacity nearly doubled in the past year to 8 billion gallons a year, but the high price of corn, and of natural gas to run the distilleries, is leading to consolidation and some bankruptcies. There are also problems getting the product to customers. While farmers benefit, profits for ethanol companies hit a low in November, surged briefly when Congress passed the Energy Bill, and now are dropping again. (Reuters PlanetArk 3/3)

News item: UN warns of ‘new hunger’ as food prices surge
A perfect storm of high food and oil prices, low food supplies, climate change, demand from China and India, and diverting crops to biofuel are causing a food crisis, the executive director of the UN World Food Programme said. The “newly hungry” have money but will be priced out of the food market, adding to the 25,000 worldwide who die each day from hunger now. Record food prices are likely to continue for several years and will cause social unrest and anarchy in the streets, she warned. Afghanistan is one of the most vulnerable nations. One solution is to use more land for food, less for biofuel, she said. (PlanetArk, 3/3)

News item: U.S. won’t meet its ethanol mandate, EIA says
It’s unlikely we’ll meet the Energy Bill ethanol mandate of 36 billion gallons/year by 2022 because of the lack of “advanced” cellulosic ethanol, the Energy Information Administration told a Senate committee. Instead EIA foresees 32.5 billions gallons/year. Most U.S. ethanol is now made from corn, with only small production from switchgrass, wood chips and other agricultural and forest waste, boding ill for the future. The projection assumes the end of tariffs on ethanol imports and significant supply coming from abroad. (PlanetArk, 3/5)

News item: California company begins cellulosic refinery
Ethanol company BlueFire will soon build a cellulosic refinery next to a landfill in Lancaster, Calif., to make ethanol from grass clippings, tree trimmings, and other biomass. The goal is to produce 3.5 million gallons by the end of the year, and eventually 17 million gallons a year. By 2011, the company hopes to be building 5 refineries a year, with a capacity of 55 million gallons each. The federal government is providing up to $385 million to BlueFire and 5 other companies for capital costs to build cellulosic refineries. (Greenwire, 3/3)