TOLD YOU SO fuel from food

MrBill · Expert Joined: Sep 15, 2005 Posts: 5650 Location: Eurasia

Not all bio-fuels are created equal. Brazil seems to be doing well with sugar cane to ethanol. Bio-diesel in Europe is doing well. At what point will bio-fuels become magically more energy efficient if we do not start experimenting with them now? Corn may not be the right feedstock. Converting farmland to bio-fuel production may not be the right policy choice either. But we have to start somewhere. How about cellulosic ethanol grown on marginal farmland and in sustainably harvested forests? Would that not bring needed economic growth to parts of Africa, S. America and Asia that are currently under-developed?

All alternatives start with huge upfront subsidies, so that they are competitive with what it is that they are supposed to replace. That is the lefthand side of the S-curve before mass adoptation. None of them may have the EROEI that petroluem has. So what? What were you planning to burn to power your economy once petroluem runs out? The next best alternative whatever that is.

If peak oil occurs because oil is finite then driving less is not THE solution. You need an alternative. Wind, hydro, nuclear, solar, wave, coal, nat gas, hydrogen and bio-fuels are some alternatives. They will be used when petroleum is no longer an option. The time to do R&D is now, while there is still petroleum, whether those alternatives are perfect or not.

Even in a powerdown scenario (i.e. less infrastructure dependent on oil) you still need alternative sources of energy. As well as more efficient ways to produce food and fertilizer from that fuel. They will need long lead times before they can be scaled up.

Part of the problem is the power losses from transmission of energy from where its produced to where it is needed. It may seem obvious, but the solution to that problem is to move manufacturing to where there is a reliable source of renewable energy, and give up the lost cause of shipping power to where it is currently needed. That means abandoning existing infrastructure that is no longer economically viable. Change is coming whether we manage it or not.
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The organized state is a wonderful invention whereby everyone can live at someone else's expense.

timmac · Heavy Crude Joined: Mar 27, 2008 Posts: 258

pstarr wrote :
Biofuels require more energy to grow and process then they contain.

my reply :
Surly you dont still beleave that old false report that still gets around that it takes more fuel to make Bio-Fuel's,, [grow a brain]
They have worked out all the kinks and problems with making Ethanol over the years and it takes 1/3 gal of fuel to make 1 gal of Ethanol and thats from corn, its 2-4 times better from other crops/plants,, and they also dont add in the fact that corn is not wasted it is dried after using to make Ethanol and sent to feed lots to feed livstock,, now corn does 2 things for the same price,, still makes feed for animals and fuel...... [do some research of your own after you grow a brain then maybe you will find the truth]

timmac · Heavy Crude Joined: Mar 27, 2008 Posts: 258

Do you also know how much energy is wasted to get oil from say Iraq shipped to America, trucked to refineres to make fuel then trucked again to your local gas station, it to is not a great balance when you look at the cost,, also include how much our tax $$ and fuel goes to the Navy to keep the sea lanes open to get the oil to America and abroad.....

As time goes by, Bio-Fuels will look better and be cheaper,,, Don't throw away a great program because of a few wrong/bad reports.............

yeahbut · Heavy Crude Joined: Oct 30, 2007 Posts: 342

These are all good points I'm sure(you really could learn a thing or ten about coherence, rationality and general class from MrBill tho timmy) . However I think it's reasonable to point out that this thread was about the impact of biofuel on food prices. Eroei, infrastructure development, scalability etc have been bashed about many times elsewhere.

The conflict between fuel and food, even in biofuel's infancy, is starting to become very apparent. Maybe marginal land crops, like this link or algae, or something else, will alleviate this situation at some point in the future. But right now, biofuels are having a major impact on food prices, and in the short-medium term that impact will surely only get worse.

MrBill · Expert Joined: Sep 15, 2005 Posts: 5650 Location: Eurasia

If you think about Nike's swoosh logo you have a J-curve. Ag prices had been trending down in real terms for generations. Food was so cheap that farmers were on corporate welfare. This discouraged large scale investment into farming. Land was taken out of production. Capacity was not improved. Then we reached the bottom of the cycle for food, fuel and fertilizer. There is always a bottom. And we were all a little surprised at how quickly we started up the right hand side of that J-curve.

Its even worse in the developing world because along with those low food prices there were high inefficiencies that discouraged local production and favored subsidized imports. Lack of property rights and security farmers could not invest in better farming methods, buy fertilizer or get the best seeds. Look at the absolute chaos in Zimbabwe. The former bread basket of sub-Sahara Africa. Bio-fuels are not causing their economic problems. Political instability is. However, high food and fuel prices are making a bad situation worse.

I am absolutely convinced that the USA is on the wrong road using corn for ethanol. However, I do think it is hypocritcal to say on one hand "America is addicted to foreign oil" and on the other hand condemn each and every alternative energy strategy as being too little, too late and too inefficient. You have to start somewhere. I hope that somewhere results in many small break throughs. Even in cloudy Germany there are houses in Freiberg that are using 90% less energy than conventional houses. That may not solve our energy problems, but it sure is a step in the right direction. It is a necessary learning process.

So in any case even plain old economic speak if you redirect 25, 50 or 75-percent of your corn production from food and animal feed to energy production then, of course, according the laws of supply and demand the price for corn, and corn substitutes like wheat, oats and barley, will rise. Demand for food and feed is rising, while supply is falling as the surplus is redirected towards fuel production, which is another source of demand. That is pretty obvious. Any ten year old would tell you exactly the same thing. If you do not bring enough bubble gum for everyone there is a problem when demand exceeds supply.

Now the real problem is how to get land in the developing world into production. How to give farmers control over their land. To provide security so they are confident to invest. How to get the fertilizer and seeds to them by bypassing corrupt officials that extract bribes and taxes on such imports. How to take care of the urban poor that do not benefit from higher food prices. There is no shortage of problems to tackle. Rising food prices should be an economic bonanza for the developing world where a large percentage of the people are still involved in agriculture to one extent or another. They need real food security and not just sacks of food aid to get them through another season.

US Commodity Prices 1800-2008

UPDATE: I borrowed this chart from a PDF document. I apologize for the poor quality, but you can see how historically low commodity prices were prior to 2000. Well below their 100-year moving average. And still below were they were some 200-years ago. Click on full-size for best results.
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The organized state is a wonderful invention whereby everyone can live at someone else's expense.

yeahbut · Heavy Crude Joined: Oct 30, 2007 Posts: 342

MrBill · Expert Joined: Sep 15, 2005 Posts: 5650 Location: Eurasia

No, not at all. All serious questions. I saw some elephant grass (or maybe bamboo grass) growing today. It is the beginning of July and it must already be 60 feet (20 meters) high? Those are perrennial grasses, so they pretty much grow wherever they take root. We need to unlock the secret of making cellulosic ethanol out of such fast growing, hardy plants.

When I think of the boreal forests of N. Canada and N. Europe, including Russia, there are tens of thousands of acres (hectares) of forests that are commercially useless now that could be turned into renewable energy through sustainable harvesting. But also forests in Africa, Asia and S. America. Much of this land is not suitable for traditional agriculture. So-called non-arable land. But some of the most marginal farmland is indeed productive forest land.

The key is to respect bio-diversity, and grow and harvest those forests in a sustainable manner. The total allowable cut per year cannot exceed the average age of a mature forest. So if it takes 40 years to grow a tree the land can only be harvested sustainably at 1/40th per year. If its 70 years then 1/70th. Also, water sheds and fragile ecosystems have to be protected. No use gaining energy at the expense of clean water or soil erosion. Germany is by law one-third forested and they have been sustainably harvesting those forests for hundreds of years.

The only number that I have seen so far (and I do not know if it is accurate) is that we currently use about 3-percent of our landmass for agriculture. That number seems really low, but, for example, France has as much arable farmland as Canada even though Canada is so many times larger. And young forests can sustain more wildlife than mature forests. So there is a trade-off between protecting the environment and economic growth, but steps can be taken to mitigate the effects.

I talked about solar panels in Freiberg, Germany. They made a good point about such experiments. Yes, they work, but they also require scarce resources to manufacture those panels. So does it make sense to install such panels in cloudy Germany or does it make more sense to build solar in areas of the world that get more days of sunlight per year. Like Cyprus. Of course, we have to do both, so there is always a trade-off.

This is why I feel we will have to abandon those parts of our existing infrastructure that are energy high maintenance and do not make economic sense with expensive energy. Instead we may see clusters of manufacturing located close to such sources of reliable, renewable energy as we have versus trying to transmit that energy over great distances to where it is now currently needed. Here in Cyprus we hope to run desalination plants using a combination of offshore wind and solar energy to alleviate our acute water shortages. But they should have started 10-years ago to be honest!

Rockman in another post in Trader's Corner just wrote about the dilemma of what to do with empty shipping containers. It is too expensive to ship them back to Asia empty, but they are made of steel that is also expensive, and gets more so as energy prices climb, so otherwise recycling them is a waste of energy. I know they make excellent garages and storage sheds, but that is also a waste of their productive life-cycle. So it is a tough question to answer? Waste energy shipping them back empty or waste energy by recycling the steel in Europe or the USA?

I do not think there are any easy answers. We cannot simply substitute fuel for food on productive agricultural land. We need to expand fuel production onto currently non-productive land. I hate to say this, but that means more (not less) research into GMOs, so that we can get plants to grow in colder, hotter, dryer climates and in wetter or saltier soils. As well as improving the cellulosic ethanol (and bio-diesel) making process itself. Improving the EROEI, reducing the amount of water used, recycling water, and finding alternatives to fertilizers made primarily using natural gas.

All huge challenges and some companies and their investors will get rich finding those answers, along with many dead ends along the way as well. But these are really rich world solutions to our energy problem, and the developing world (also diverse so I hate to throw them all under one umbrella) will either have to find its own solutions to the food or fuel dilemma or work with the rich world to find joint solutions. That alone may be the biggest challenge. Hopefully, peak oil does not mean peak international cooperation!

UPDATE: In Chicago, spot corn hit a record high of $6.43 a bushel and corn for delivery next year – by which time the US forecasts that about 33 per cent of its corn crop will be consumed by the biofuels industry – hit a high of $6.97 a bushel.

yeahbut · Heavy Crude Joined: Oct 30, 2007 Posts: 342

MrBill · Expert Joined: Sep 15, 2005 Posts: 5650 Location: Eurasia

I feel like such a parrot sometimes, but I always come back to this example:

Physical Reality > Economic Consequences > Social Reaction > Political Response > Feedback Loop > New Reality > Etcetera

The US imposes import duties on sugar cane, and ethanol made from sugar cane, as a price subsidy to US farmers not because it makes economic sense.

We (collectively) chose corn because, like those mythical mountains of butter and rivers of subsidized milk in Europe, we thought we had too much, so there was no harm in diverting some of that production towards fuel production. It is a sop to the farm lobby.

And the armchair liberals wanted us to stop subsidizing food production because that was hurting farmers in the developing world that could not compete. Notice how we are no longer producing enough for their needs, but a) they are not producing more because they cannot afford the cost of fuel and fertilizer, and b) our higher priced food is still cheaper than they can afford to compete with.

Sometimes you cannot win for trying. Maybe there are deeper problems in the developing world to deal with, eh? Na, it is always the rich world's fault! First food is too cheap. Now it is too expensive. We have to pay the world's market price for oil, but we should not charge the going market price for the food we produce because that might create hardship. Its always our fault!!

So what are the solutions? On the cellulosic ethanol/bio-fuel side it is little more than research and development. That takes money and it takes time. And we're by definition unsure of the results. But we suspect (know) that supply is not our only problem, so we need to focus on reducing demand as well. Jevon's Paradox be damned we need to conserve energy like never before.

High prices are the best method to cure high prices. We should absolutely resist the temptation to subsidize conventional fuels. At any level. Give tax credits to those least able to afford higher energy prices. We do not want Granny freezing to death in the dark. But we need to send an unambiguous message to consumers that high energy prices are here to stay, so they had better change their consumptive habits. Hit 'em in the wallet where it hurts the most!

The price of crude has doubled in the past year, but the IEA believes that three-fifths of the price increase in petroleum has been absorbed by governments through subsidies to shield consumers from the higher price of gasoline and diesel, so they have, yet, to receive the message to consume less. Specifically in the developing world. Further those subsidies have not been targeted, so they do not help the poor per se, but rather the middle classes that can already afford to drive. That is just poor public policy. And removing those comfy subsidies now that prices have already doubled will be even more painful to consumers, and will probably cause social unrest for their governments. Give the market a chance to work.

And it would be a huge help if the next 3 billion additional babies that will be born over the next 30-years are never born. Over population is and always will be the root cause of all our problems. Yes, over consumption is just as bad, but over population just adds additional pressures to our environment. If you cannot grab that tiger by the tail then you're really just treating symptoms rather than addressing the big, fundamental, underlying problem.

I am as selfish as the next person. I want to live in a comfortable home and enjoy the fruits of my labor. I like electricity and toilets that flush. I want to do that in an environmentally sustainable manner, but I am rue to give that quality of living up just so we can cram 10, 15 or 20 billion people onto this planet. And I have to also accept that whatever changes I make to my own living arrangements they will be offset by some 6.7 billion people doing their own thing.
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The organized state is a wonderful invention whereby everyone can live at someone else's expense.

MrBill · Expert Joined: Sep 15, 2005 Posts: 5650 Location: Eurasia

The World Bank has estimated that higher food and fuel prices are a daily struggle for more than 2 billion people and threaten to push some 100 million people into poverty.

yeahbut · Heavy Crude Joined: Oct 30, 2007 Posts: 342

MrBill · Expert Joined: Sep 15, 2005 Posts: 5650 Location: Eurasia

No, my comments were just general and not targeted at you personally. There is enough blame to go around for everyone. No need to blame anyone in particular. We all have positive consumption and leave a carbon footprint. So we are all part of the problem.

RE the marginal land issue. There are, of course, no guarantees that prime land cannot and will not be used for fuel production as opposed to food and feed production. Just like there are no guarantees that when I buy a tree in the developing world to offset my carbon footprint that someone, at sometime, now or in the future, might come along and cut that tree down. They might even loudy proclaim it is their right to cut it down.

timmac · Heavy Crude Joined: Mar 27, 2008 Posts: 258

yeahbut wtote :

biofuels are having a major impact on food prices, and in the short-medium term that impact will surely only get worse.

I don't agree with that at all,, I think that biofuels are about 10% of the problem,, bad weather, lack of water and bad farm management about 35% of the problem,, high price oil about 30% of the problem and the rest on a very fast growing world population...