Hidden costs of the Ethanol fuel fad

It's not a panacea

"Rapid development of the corn-based ethanol industry is already having adverse impacts on food supplies and prices." That's the claim in a letter from leading food companies to Senate Majority Leader Harry Reid (D-Nev.) Headlines earlier this year blamed a tortilla shortage in Mexico on high U.S. corn prices and margarita drinkers must now worry about a future tequila shortfall because Mexican farmers are ripping up their agave fields to plant corn.

Making us more independent of oil may make people starve.

In the best case, IFPRI projects that corn prices will go up 23 percent, wheat, 16 percent, cassava, 54 percent, and sugar cane, 43 percent. If there is no cellulosic ethanol breakthrough and crop productivity increases at the current rate, the price of corn would increase 41 percent, wheat, 30 percent, cassava, 135 percent, and sugar cane, 66 percent. What would this mean for the world's poor?

In an article entitled, "How Biofuels Could Starve the Poor," in the current issue of Foreign Affairs, two University of Minnesota professors of agricultural policy, C. Ford Runge and Benjamin Senauer, argue that "the number of food-insecure people in the world would rise by over 16 million for every percentage increase in the real prices of staple foods." They calculate that would mean that would be 600 million additional hungry people by 2025, rising to a total of 1.2 billion.

Another way to look at it is that it takes 450 pounds of corn to make enough ethanol to fill a 25-gallon gas tank. Four hundred and fifty pounds of corn supplies enough calories to feed a person for one year. The USDA projects that in 2010 the ethanol industry will consume 2.6 billion bushels of corn. A bushel weighs 56 pounds, so a quick calculation yields the result that 2.6 billion bushels of corn could supply enough calories to feed nearly 325 million people for a year.

But those people would be in the third world, and they don't get to vote.

"Famine," observes Dennis Avery, the director of the Hudson Institute's Center for Global Food Issues, "is a human society's ultimate failure. Tightening the world's food supply by diverting major quantities of its grain stocks into fuels will drive up the prices of all food. This will inevitably hit hardest at the poorest people in the world's food-shortage regions. This would not be ethical even if there were no other sources of energy."

But then, the world's poor do not participate in Iowa's presidential caucuses.