Ethanol: World’s grain for food or profit?

The move to develop biofuels as an oil alternative was embraced in Bush’s State of the Union speech.

In 15 of the leading 23 oil-producing nations, oil output peaked many years ago. For example, in 2004 the U.S. produced 44 percent less oil and Venezuela 31 percent less compared to their peak outputs in 1970. Firm data for Saudi Arabia, the largest producer, is not known, but output technically peaked in 1980 and is 10 percent lower today. At the same time, the world’s appetite for oil is increasing rapidly. Except for oil, China has already surpassed the U.S. in consumption of basic commodities (grain, meat, coal and steel), and by heading quickly to an automobile economy, China will likely do so with oil soon.

How is the capitalist economy meeting this challenge? One way is to try to control the world’s diminishing source of fossil fuels. This path has led to the tragic war in Iraq and increasing threat of war with Iran to control the Middle East.

The promotion of biofuel is a second response from the capitalist economy. In 2006 about 17 percent of the U.S. corn crop was converted to ethanol. This, however, only supplied about 2 percent of auto fuel. Considering the energy costs to produce ethanol and soy biofuel, it is estimated that our entire present corn and soy crops would only satisfy 5.3 percent of current gas and diesel energy use. With 10 percent of the world’s sugar going into ethanol, the price of sugar has doubled.

The Earth Policy Institute predicts ethanol production will claim 50 percent of all U.S. corn in 2008 with 79 new ethanol plants built in the next two years, almost doubling the present number at a time when world grain stocks are at their lowest level in 34 years.

Furthermore, the net energy gain is questionable. David Pimentel of Cornell University and Ted Patzek of University of California-Berkeley even concluded that making ethanol from corn requires 29 percent more energy than is recovered.

In spite of the “clean energy” hype, ethanol plants are wreaking ecological devastation. Eighty percent of Brazil’s greenhouse gas emissions come from deforestation to plant half its sugarcane crop for ethanol. Malaysian and Indonesian rainforests are being destroyed for oil palm plantations.

Archer Daniels Midland, the largest U.S. producer of ethanol, is listed as the tenth worst corporate air polluter on the “Toxic 100” list of the Political Economy Research Institute. Its Clinton, Iowa, corn processing plant generated nearly 20,000 tons of pollutants in 2004, with 100 tons per pollutant defined as a major source by the EPA. Corn production itself is especially demanding of water, fertilizers and pesticides, leading to erosion and runoff pollution of water supplies.

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