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Tuesday, 17 April 2007 17:52 |
 As oil prices continue to skyrocket toward $100 per barrel, one segment of the American economy has benefitted greatly ó corn farmers.
Ethanol, one of the much-hyped alternatives to petroleum, has become such a profitable product that production of corn ó its primary ingredient ó has increased by 12 million acres since last year.
While this may seem good for combatting global warming and our dependence on foreign oil, there are, no doubt, some unintended consequences that give cause to worry.
As more and more acres of land are being shifted from production of
food to production of fuel, the U.S. may start to face sharp increases
in the price of food.
This is already the case in much of Central America, where corn is a major source of the food supply.
Combined with the effects of trade liberalization, higher demand for
ethanol has had a devastating impact on many of the regionís poorest
citizens ó especially among indigenous populations.
As farmers there have been able to earn more money selling industrial
corn to consumers in the U.S. than by selling food to local markets,
the costs of living have dramatically increased.
Domestically, ethanol has already contributed to higher prices of
chicken, beef and meats from other animals that are raised on corn.
Some analysts predict that this trend will only intensify as the corn
fields that had been used for livestock continue to be converted to
ethanol production.
Furthermore, many critics of the fuel point out its extremely low energy return.
Specifically, they say, corn-based ethanol takes almost as much energy
to produce ó through petroleum-based fertilizers and pesticides ó as it
yields.
Given all of this, we think that ethanol might not be the answer to our problems.
Certainly, corn-based ethanol is not a viable replacement for
petroleum. Even the fuelís most ardent supporters do not claim that the
U.S. could produce enough ethanol to supplant our dependence on foreign
oil.
At best, it will put a small dent in our consumption levels. However,
conservation efforts, development of electric-powered vehicles and
federally mandated efficiency standards would all have a similar or
greater impact on oil consumption.
Meanwhile, a number of technological developments are coming down the
pipeline, including better fuel cells, more efficient batteries and
biodiesel produced from non-corn sources ó such as waste vegetation and
algae.
Given the short-term nature of the fix that ethanol promises and the
tremendous threat it poses with regard to land use and rising food
prices, we would encourage consumers to think twice about assuming our
problems will be solved through corn.
Meanwhile, if you want to do something about energy independence and
global warming, there is a well-tested device based on stable,
inexpensive technology, which converts energy from food into
transportation.
Itís called the bicycle.
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