The right biofuels
NYT
April 24, 2008
Op-Ed Columnist
Bring on the Right Biofuels
By ROGER COHEN
Fads come fast and furious in our viral age, and the reactions to them
can be equally ferocious. Thats what were seeing right now with
biofuels, which everyone loved until everyone decided they were the
worst thing since the Black Death.
Where fuel distilled from plant matter was once hailed as an answer to
everything from global warming to the geo-strategic power shift
favoring repressive one-pipeline oil states, its now a scam and
part of the problem, according to Time magazine. Ethanol has turned
awful.
The supposed crimes of biofuels are manifold. Theyre behind soaring
global commodity prices, the destruction of the Amazon rain forest,
increased rather than diminished greenhouse gases, food riots in
Haiti, Indonesian deforestation and, no doubt, your mother-in-laws
toothache.
Most of this, to borrow a farm image, is hogwash and bilge.
Ill grant that the fashion for biofuels led to excess, and that some
farm-to-fuel-plant conversion, particularly in subsidized U.S. and
European markets, makes no economic or environmental sense. But
biofuels remain very much part of the solution. It just depends which
biofuels.
Before I get to that, some myths need dispelling. If Asian rice prices
are soaring, along with the global prices of wheat and maize, its not
principally because John Doe in Iowa or Jean Dupont in Picardy has
decided to turn yummy corn and beet into un-yummy ethanol feedstock.
Much larger trends are at work. They dwarf the still tiny biofuel
industry (roughly a $40 billion annual business, or the equivalent of
Exxon Mobils $40.6 billion profits in 2007). I refer to the rise of
more than one-third of humanity in China and India, the disintegrating
dollar and soaring oil prices.
Hundreds of millions of people have moved from poverty into the global
economy over the past decade in Asia. Theyre eating twice a day,
instead of once, and propelling rapid urbanization. Their demand for
food staples and once unthinkable luxuries like meat is pushing up
prices.
At the same time, the rising price of commodities over the past year
has largely tracked the declining parity of the beleaguered dollar.
Rice prices have shot up in dollar terms, far less against the euro.
Countries like China are offloading depreciating dollar reserves to
hoard stores of value like commodities.
Food price increases are also tied to oil being nearly $120 a barrel.
Fossil fuels are an important input in everything from fertilizer to
diesel for tractors.
Another myth that needs nuking is that the Amazon rain forest is being
destroyed to make way for Brazilian sugar-cane ethanol. Almost all
viable cane-growing areas lie hundreds of miles from the rain forest.
Brazil has enough savannah to multiply its 3.5 million hectares of
cane-for-ethanol production by ten without going near the Amazon
ecosystem.
Brazilian rain forest is burning, as it long has, for a complex mix of
economic reasons. Brazils successful ethanol industry 80 percent of
new cars run on ethanol or gasoline and all gasoline comprises 25
percent biofuel is not one of them.
The danger in all this anti-biofuel hysteria is that well throw out
the baby with the bath water.
Those hundreds of millions of Chinese and Indians now eating more will
be driving cars within the next quarter-century. What that will do to
oil prices is anybodys guess, but whats clear is that ethanol
presents the only technically and economically viable alternative for
large-scale substitution of petroleum fuels for transport in the next
15 to 20 years. Its not a panacea, but its a necessary bridge to the
next technological breakthrough.
The question is: which ethanol?
Right now, the biofuel market is being grossly distorted by subsidies
and trade barriers in the United States and the European Union. These
make it rewarding to produce ethanol from corn or grains that are far
less productive than sugarcane ethanol, divert land from food
production (unlike sugarcane), and have dubious environmental
credentials.
What sense does it make to have a surplus of environmentally friendly
Brazilian sugar-based ethanol with a yield eight times higher than
U.S. corn ethanol and zero impact on food prices being kept from an
American market by a tariff of 54 cents on a gallon while Iowan corn
ethanol gets a subsidy?
It would make a lot more sense to drop the tariff, drop the subsidy,
and allow Brazilian ethanol into the United States, said Philippe
Reichstul, the chief executive of a biofuel company in São Paulo.
Pressure on U.S. land will be slashed.
The United States and Europe should maintain their biofuel targets.
Pressure to scrap a European plan for renewable fuels to supply a
tenth of all vehicle fuel by 2020 must be resisted while rethinking
the policies that favor the wrong biofuels.
The real scam lies in developed world protectionism and skewed
subsidies, not the biofuel idea.
Blog: www.iht.com/passages
date: Thu, 24 Apr 2008 06:52:08 -0700 (PDT)
author: Lance
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