Thursday, February 01, 2007

Mexican canaries in the mine: feed ethanol industry, starve the rest of us:

Elizabeth Malkin of the NYT reports from Mexico City that "tens of thousands of workers and farmers filled this city's central square on Wednesday to protest spiraling food prices." The price for tortillas, one of the main food staples for Mexicans, has risen to 40% above where it was just a few months ago. In contrast to this steep increase the minimum wage has increased only 4%, which is just $5.00 a day. (At least they've gotten a minimum wage increase!) Malkins writes, "Most analysts agree that the main cause of the increase has been a spike in corn prices in the United States, as demand for corn to produce ethanol has jumped."

Typically, W.'s wrong headed energy policies are hurting the most vulnerable citizens of yet another poor country and creating political turmoil that could, in this case, spill over our southern border. His obsession with corn based ethanol is creating a new gold rush that benefits huge corporations that grow corn at the expense of other more viable and less environmentally damaging alternative fuels. In the process, food prices are going to rise substantially in this country as the scarcity of corn becomes more acute and as more of it is made into fuel.

And article in Truth About Trade Technology quotes Lester R. Brown, an agriculture expert in Washington, D.C., and president of the Earth Policy Institute saying, "We're putting the supermarket in competition with the corner filling station for the output of the farm." Joachim von Braun of the International Food Policy Research Institute says, "I do not just expect somewhat higher food prices, but new instability as well. In the future, instability of energy prices will be translated into instability in food prices."

Despite W. & Co.'s new PR campaign to convince Americans that the economy is going gang busters, most people know better. They're living pay check to pay check and the more hours they work the smaller those checks get. A major rise in the price of meat along with every other food product that contains corn syrup -- which is about everything -- will hit working people the hardest. Most folks are already spending about 70% of their income on just paying the rent, and now the sky rocketing costs of utilities is taking what's left. An increase in food prices just might cause people here in the US to hit the streets, too. You know the old axiom: 'Every society is just one missed meal away from a revolution.'

The ethanol scam:

According to Tax Payers for Common Sense:

The federal government has subsidized the ethanol industry since 1978 with tax exemptions totaling over $11 billion and a production mandate through 2012. . . Although there has been plenty of time for the industry to mature, production is still much more expensive than gasoline, and not as energy efficient. Ethanol production does not help reduce American’s 'addiction to oil' and might not be as environmentally friendly as was once thought. Moreover, allowing government policy to choose winners and losers instead of the market has suppressed investment in other alternative fuels—including non-corn biofuels—which may have far greater economic and environmental benefits. . . ethanol subsidies are a corporate handout to big agribusiness disguised as fuel innovation."

Instead of funneling zillions of dollars of tax payer money to develop a fuel that's more costly to produce, uses more energy to make than it saves and increases green house gases, we should be looking at what the Brazilians are doing with sugar cane.

The Sugar Cane/flex-fuel alternative:

A NYT article from April of last year reported that Brazil:

"Expects to become energy self-sufficient this year, meeting its growing demand for fuel by increasing production from petroleum and ethanol. . . Ethanol can be made through the fermentation of many natural substances, but sugar cane offers advantages over others, like corn. For each unit of energy expended to turn cane into ethanol, 8.3 times as much energy is created, compared with a maximum of 1.3 times for corn, according to scientists at the Center for Sugarcane Technology here and other Brazilian research institutes."

And it gets better . . .

"In the past, the residue left when cane stalks are compressed to squeeze out juice was discarded. Today, Brazilian sugar mills use that residue to generate the electricity to process cane into ethanol, and use other byproducts to fertilize the fields where cane is planted."

In addition, the Brazil has flex fuel cars, which can run on gas or ethonal. And this isn't pie in the sky far down the road stuff: "Today, less than three years after the technology was introduced, more than 70 percent of the automobiles sold in Brazil, expected to reach 1.1 million this year, have flex fuel engines, which have entered the market generally without price increases."

But, of course, they don't grow sugar cane in Iowa, so no politician, especially a politician running for president, is going to dare say we should chuck corn-based ethanol and go with sugar cane instead. Better to waste $3 billion a year subsidizing corn growers to starve the world.


The NYT reprts:

"Exxon, the world’s largest publicly traded oil company, reported profit of $10.3 billion in the fourth quarter. That represented a decline of 4.3 percent from its record profit in the fourth quarter of 2005 and was Exxon’s first quarterly decline in almost three years. But for the year, Exxon’s profit rose 9 percent from 2005 results to a record of $39.5 billion, the largest annual profit ever for an American company.


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