China, not ethanol, stupid
Posted: April 15, 2008,
http://network.nationalpost.com/np/blogs/francis/archive/2008/04/15/commodity-boom-due-to-iraq-subprime-asia.aspx6:09
PM by Diane Francis
Canadian Politics, Energy, U.S. Politics, Middle East
One of thousands of Chinese construction sites in Beijing 2007.
AFP/Getty Images
Blaming biofuels for food price spikes is like shooting the messenger.
But that's how ignorant the British Prime Minister is. His message was
stop growing energy and food prices will drop.
This betrays a frightening mentality on the part of a person who is
CEO of a rather large, but fading, economy. A resource-challenged one
too, now that the North Sea oil is running out.
The boom in foodstuffs follows the boom in all "real" things, or
commodities and is not about market distortions caused by ethanol
subsidies in North America (some $4 billion a year or about as much as
Americans spend on chocolate bars). Besides that, ethanol subsidies
only affect corn and the cost of everything is going up.
China and Asia's mega-boom
The reason is that the world is now in the midst of the greatest
economic boom in history. The first boom was electrification or
industrialization, then it was the Marshall Plan after the Second War
War, or rebuilding of Europe and urbanization of North America. Now it
is Asia's ex****t wealth which is now being invested in cities and
infrastructure and is the equivalent of a Marshall Plan every two
years.
Led by China, Asians are buying oil, gas, cement, steel, coking coal
and everything necessary to urbanize their populations. The Chinese
economy is converting from an ex****t-based, low labor nation to the
creation of a gigantic internal economy providing goods and services
and highways and urbanscapes for its 1.3 billion people.
Right now, 44% of China lives in crowded cities. In a generation, 66%
are expected to leave the impoverished rural regions for its bursting
cities. This is an irreversible and is behind the spike in commodity
prices of all kinds. India lags but is undertaking the same thing.
The two will create ten New York Citys in the next ten years.
Estimates are that China alone will build 30,000 skyscrapers in a
decade and 50 nuclear plants.
This is why everything from rice to scrap metal (non-exchange traded
metals have tripled in six months worldwide), gold, silver, copper,
base metals, potash, coking coal and uranium have jumped and will
continue to do so.
So ignore dummies who don't get it and buckle up. And if you can, cash
in on the wildest ride in ten lifetimes.
=====================================================
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by scienceguy
Apr 16 2008
8:02 AM Diane, not Chinese, stupid.
Sorry Diane, when the U.S. is culling their pig and chicken farms,
because their is not enough feed, and it takes 4500 L of water per
litre of biofuel, at a net energy gain near zero or possibly in the
negatives, Biofuel is definitely not what it was proposed to be. You
are wrong on this one. Sorry...but do some more research!
by petejc
Apr 16 2008
11:03 AM Yes please do some research.
Fact:
It takes 3 gallons of water to refine a gallon of ethanol. It takes 40
gallons of water to refine a gallon of gas.
Fact:
Ethanol production contributes about 6% to the rise in the cost of
food. The rest is growing Asian and Indian markets, droughts, cost of
labor, packaging, marketing, trans****tation, and energy to produce the
food plus a weak US dollar. There is about 6 cents USD of corn used in
a box of corn flakes.
Fact:
Only the starch from the corn is extracted to make ethanol. The
resulting corn mass is called distillers grains and is an animal feed.
In fact there was such a surplus of distillers grains produced in the
US hat it had to be ex****ted.
This article is spot on.
by scienceguy
Apr 16 2008
1:46 PM Either you have a vested interest or you have been sipping too
much of that Ethanol. How do you expect they grow the corn...water
free? I put 4500L per litre because it was a lower estimate and I
didn't think anyone in the know would question it. Regarding fact two:
www.reason.com/.../125883.html
Also thanks for pointing out that the high energy sugars and starches
are used in the distillation process...where did you think the energy
comes from?
Spotty maybe, spot on, NOT!
by Diane Francis
Apr 16 2008
3:07 PM Diane Francis responds
Ethanol and water waste is another lie and myth, stay tuned for my
next blog at 4.30 EST today....
I have NO vested interest in ethanol, just in good facts and smart
conversations about energy and policy.
by Reggy15
Apr 16 2008
5:55 PM Scienceguy...more like rhetoricguy.
We don't irrigate corn in Canada.
The reason they are culling pigs in the US is the same reason our
government is doing it here in Canada. There simply is too much supply
and not enough demand which is depressing prices, ****k is at a decade
low.
The fact is there is more food in the world now then ever in history.
Food supply is not the issue, it's the distribution of that food that
has always been and will always be the issue.
As for distiller grains - It is the protein and fibre that are the
most valuble part of the kernal, energy can be sourced from a variety
of afalfa and gr***** that actually make up the majority of livestocks
diet.
As for net enregy- The US department of Energy states that corn based
ethanol plants generate 34% more energy then required to produce the
ethanol. To suggest they are a negative net supplier of energy is
completely inaccurate.
And lastly, if you want to reference websites then I suggest you
refernce credible ones, not merely another article based on unfounded
fact and rhetoric. To suggest that biofuels is driving up the price of
corn is again inaccurate. Of all the grains corn has increased the
least and yet it is the dominate feedstock for biofuels in North
America. Less than 1% of wheat goes to ethanol production and yet
wheat has increased 3x more than corn. The net carry out in the US
corn supply was 1.6 billion bushels more in '07 then '06. That means
there was more supply then demand. When I studied business supply had
to outpace demand to justify a price increase. The majority of the
increase in the corn market can be attributed to an overheated
commodities market and speculation.
by scienceguy
Apr 16 2008
8:59 PM Oooops, referencing numbers that are re****ted using the most
efficient way of growing corn, i.e. irrigation for your percentage
yield and then claiming you are not irrigating your corn is really
like comparing ethanol inflated apples to oranges.
So how much water does it take to grow corn? According to a study of
California agriculture by the respected Water Education Foundation, it
takes about 118 gallons of water to grow a pound of corn. And how many
pounds of corn does it take to produce a gallon of ethanol? About 21
pounds of corn, according to one publication from the U.S. Department
of Agriculture. So do the multiplication (118 gallons of water per
pound of corn, times 21 pounds of corn) to get the water it takes to
produce the corn for a gallon of ethanol. If these numbers are
accurate, the answer is about 2,500 gallons of water. For one gallon
of ethanol. Yes that water will re enter the water cycle, but it
could have been used to grow food, not fuel.
Yes, I agree there is more food now than in History, the question is,
can people afford it? This ethanol craze is really hurting those that
are the poorest around the world.
Here is a headline for you: March 12 (Bloomberg) -- Pilgrim's Pride
Corp., the world's biggest poultry processor, will close a U.S.
chicken-processing plant and six distribution centers and cut 1,100
jobs, blaming U.S. ethanol policies for pu****ng the industry into
``crisis.''
The fact is ethanol is highly subsidized; otherwise the farmers would
be planting other crops. That is crops for food.
In regards to my reference, Ronald Bailey is quite decorated.
www.reason.com/.../133.html Would you prefer primary source
references next time? Having a fuel source compete with food is a bad
idea. Open you eyes. The U.N. now realizes it, China realizes it,
Britain realizes it and it truly doesn’t take a rocket scientist to
realize it!
by scienceguy
Apr 16 2008
8:59 PM Oooops, referencing numbers that are re****ted using the most
efficient way of growing corn, i.e. irrigation for your percentage
yield and then claiming you are not irrigating your corn is really
like comparing ethanol inflated apples to oranges.
So how much water does it take to grow corn? According to a study of
California agriculture by the respected Water Education Foundation, it
takes about 118 gallons of water to grow a pound of corn. And how many
pounds of corn does it take to produce a gallon of ethanol? About 21
pounds of corn, according to one publication from the U.S. Department
of Agriculture. So do the multiplication (118 gallons of water per
pound of corn, times 21 pounds of corn) to get the water it takes to
produce the corn for a gallon of ethanol. If these numbers are
accurate, the answer is about 2,500 gallons of water. For one gallon
of ethanol. Yes that water will re enter the water cycle, but it
could have been used to grow food, not fuel.
Yes, I agree there is more food now than in History, the question is,
can people afford it? This ethanol craze is really hurting those that
are the poorest around the world.
Here is a headline for you: March 12 (Bloomberg) -- Pilgrim's Pride
Corp., the world's biggest poultry processor, will close a U.S.
chicken-processing plant and six distribution centers and cut 1,100
jobs, blaming U.S. ethanol policies for pu****ng the industry into
``crisis.''
The fact is ethanol is highly subsidized; otherwise the farmers would
be planting other crops. That is crops for food.
In regards to my reference, Ronald Bailey is quite decorated.
www.reason.com/.../133.html Would you prefer primary source
references next time? Having a fuel source compete with food is a bad
idea. Open you eyes. The U.N. now realizes it, China realizes it,
Britain realizes it and it truly doesn’t take a rocket scientist to
realize it!
by Reggy15
Apr 16 2008
10:40 PM You do realize that your comments actually sup****t my
argument... don't you? Since it takes energy to irrigate and the
highest yielding areas like Iowa don't irrigate then, according to
your argument, the net energy balance is actually greater than 34%. In
Ontario, where we don't irrigate, we yield on average the same as
places like Kansas that do irrigate, therefore our energy balance
again is greater.
You must also realize that the energy balance for gasoline is only .76
units of energy for every unit of energy input. Which do you think is
better?
Unless you can control the falling rain or are going to dictate to
farmers what crops they can and can't grow - your water argument is
pointless.
Just so you know when corn was trading at $2 /bu eighteen months ago
it didn't go to feed the poor it went to feed livestock in developed
countries. The poor don't eat feed corn whether it is $2/bu or $5/bu
or $10/bu. And as for acres getting pushed aside to grow fuel - the US
grew more corn in 1944 (as far as I know there was no ethanol mandate
or biofuels subsidies in 1944) then they did last year. The USDA has
forecasted a decrease in corn acres in '08 because of the increase in
the prices paid for soybeans and wheat. Farmers are businessmen too,
it's clearly not the subsidies around ethanol that makes them grow one
crop over another, otherwise we wouldn't see a decline in corn acres,
it's the op****tunity to make the best return on there investment. Do
you want to deny them that? Because if you do then you better cash in
all your retirement saivngs and investments and put that money into
feeding the poor, otherwise you might be considered a hypocrite.
by scienceguy
Apr 17 2008
1:16 PM Do a little bit of research, and look at the various returns
for different situations. Also, ask yourself why don't the ethanol
plants power themselves with ethanol? Yes, the government does
indirectly dictate what farmers grow, by mandating 10% ethanol in all
fuel, and choosing their subsidies. Clearly without government
wanting to appear green, there would be no ethanol craze. It is a
fact that even at 10% ethanol, a human could be fed for a year using
the corn that it takes to fill up my gas tank just once! I used to
like and respect it when the farmers motto was Farmers Feed Cities.
This respect is not there for the thought that farmers feed my gas
tank. I do realize that it is obvious that you are anti-chineses,
have a vested interest in the ethanol hoax and seem to understand just
enough to justify your position. My savings and investments are fine-
Thank you. As a farmer and a science teacher, I am anything but a
hypocrite!
by J Albert
Apr 18 2008
1:22 PM I'm not convinced that Ethanol makes sense - it likely depends
on the proximity of the corn production to where the fuel will be
used.
However, I don't think the Ethanol craze is that im****tant in the
general increase in grain (and other commodity) prices world wide.
What does midwest corn have to do with the price of rice in East Asia?
Very little.
The fact is that there a great deal of arable land was layed fallow in
the US between 1950 - 2000 - over 20% of planted land in 1950 was
fallow in 2000. There's still plenty of land to grow corn - and the US
land is very fertile. 20% of the world's arable land is in the US.
There's no problem growing more corn - teh question is whether the
energy balance in making ethanol is worth it.
by rodstang
Apr 19 2008
4:59 PM Sorry Diane you need to simmer down and stop calling a head of
state like Gordon Brown stupid,ignorant and dummy because he does'nt
agree with you.You need to raise the level of discussion and stop
being so smug.Contrary to England Canada happens to have its derriere
sitting on vast quantity of natural resources so enjoy the ride and
dont sound so angry.
by Reggy15
Apr 20 2008
9:38 AM Why is your response when someone sites fact always the same
-"do some research". It is clear that you haven't. Blogs and articles
found in the weekend paper don't constitute research. I just explained
that it takes more energy to create gasoline from oil than it does to
create ethanol from corn, so you explain to me how I need to look at
the different returns? As for why ethanol plants don't use ethanol.
It's the same reason oil refineries don't use gasoline to run their
operations- basic economics, natural gas is cheaper. The next time you
fill up your vehicle and pay $1.20/L just think of how much more
energy went into creating that gasoline and then think of how much
more efficient and environmentally friendly - and cheaper -it would
have been were it ethanol from corn.
As for the Chinese, again do your homework. The Chinese are the second
biggest producer of corn in the world - they don't im****t corn. And
the rest of the world doesn't eat feed corn, it goes to feeding
livestock. The human food staples are rice, which is not used in
ethanol production, and wheat - less than 1% of wheat production goes
to ethanol. So I'm not really sure how you associate filling your tank
with feeding someone for a year?
You may be a science teacher but you are clearly not a farmer. Growing
a few vegetables on the side doesn't make you a farmer. When farming
is your only source of income, then you are a farmer, and only then do
you understand the point I made earlier about getting the best return
on your investment. With your teaching income and pension it is quite
convenient to sit in your idealistic ivory tower and tell farmers what
they should be growing.
You are correct about one thing I do understand and have widely
researched ethanol - clearly much more than you have.
by scienceguy
Apr 20 2008
11:27 AM Careful who you offend,
www.cbc.ca/.../agcensus.html
Where you get your information,
www.livescience.com/.../071027-ap-biofuel-crime.html
And think about others, not just your bottom line, today's headline,
tomorrows...
www.thestar.com/.../416328
by scienceguy
Apr 20 2008
5:50 PM Tomorrow's headline today, thanks to time zones.
Soaring oil prices have made it more expensive to trans****t food
products, though the World Bank estimates this and costlier fertilizer
account for only 15% of the rise in food prices. Improved eating
habits in developing nations are also increasing demand for grains –
both for human consumption and to feed livestock, since rapid economic
growth in places like China means more people have enough money to buy
meat. But the Bank notes that "almost all" of the increased growing of
one of the key crops, corn, "went for biofuels production in the
U.S."online.wsj.com/.../SB120872360532329375.html
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