Consequences of Bio-Fuels released in Three Reports

Charles Drevna, the Executive Vice-President at the National Petrochemical and Refiners Association presented yesterday three reports from the International Organisation for Economic Co-operation and Development (OECD), FarmEcon.com, and the Chesapeake Bay Commission. All three reports confirms whether the use of Biofuels as mandated by the Energy Policy act of 2005 has greater environmental advantage considering the impact on food prices from ethanol’s production, distribution and use.

From autochannel.com, the reports excerpts
Organization for Economic Co-operation and Development (OECD)
• “In theory there might be enough land available around the globe to feed an ever-increasing world population and produce sufficient biomass feedstock simultaneously, but it is more likely that land-use constraints will limit the amount of new land that can be brought into production leading to a ‘food-versus-fuel’ debate.” (Richard Doornbosch and Ronald Steenblik, Biofuels: Is The Cure Worse Than The Disease?, Organisation for Economic Co-operation and Development , September 2007)
• “When such impacts as soil acidification, fertilizer use, biodiversity loss and toxicity of agricultural pesticides are taken into account, the overall environmental impacts of ethanol and biodiesel can very easily exceed those of petrol and mineral diesel.”
• “Neither should current biofuel support policies be championed for their supposed capacity to reduce GHGs or improve energy security. The cost of obtaining a unit of CO2-equivalent reduction through subsidies to biofuels is extremely high, well over $500 per tonne of CO2-equivalent avoided for corn-based ethanol in the United States, for example, with other researched countries not performing much better. The score is also not very favourable in terms of displacing fossil fuels. In most cases the use of biofuels roughly doubles the cost of transportation energy for consumers and taxpayers together.”

FarmEcon.com
• “In total, the costs of ethanol paid by taxpayers, fuel purchasers and the food system are about $31 billion in 2007, or about $4.40 per gallon of ethanol produced. Corrected for the energy content of ethanol relative to gasoline, this is equivalent to a wholesale gasoline price of $6.67 per gallon. Ethanol is not a cheap source of energy, it is about 3 times as expensive as gasoline.” (Dr. Thomas Elam, Fuel Ethanol Subsidies: An Economic Perspective, FarmEcon.com, September 19, 2007)
• “The ethanol subsidy program is now increasing the cost of food production though side effects on major crop prices and plantings. The cost increases are already starting to show up in the prices of meat, poultry, dairy, bread, cereals and many other products made from grains and soybeans.”
• “[N]early all of the world’s current grain supply would be needed to fuel the U.S. gasoline powered vehicle fleet, leaving almost nothing for world food needs. Put another way, each 1% of the U.S. gasoline supply that is replaced by ethanol uses almost 1% of our current global grain production. Clearly, the global demand for food places a severe limit on the feasibility of using grain supplies for producing a large percentage of U.S. motor fuels.”

Chesapeake Bay Commission
• “Handled incorrectly, biofuels could lead to shifts in crop patterns and acreages that create an uncertain future for farmers and foresters and seriously worsen the overload of nutrients to our rivers and the Bay.” (Chesapeake Bay Foundation, Biofuels And the Bay: Getting It Right To Benefit Farms, Forests and the Chesapeake, September 2007, p.3)
• “Brazil is often cited as a promising example of biofuel production and consumption. Ethanol, produced from the country’s vast acres of sugar cane, now comprises half of Brazil’s transportation fuel, and 77 percent of new cars in Brazil can run entirely on ethanol. However, Brazil may also serve as an example of how rapid growth of biofuels can lead to unintended environmental consequences. The demand for sugar cane-based biofuel may accelerate the conversion of other agricultural lands and push grazing farther toward rainforests. Given the role of these vast forests in mitigating global climate change and in providing other ecosystem services, this may represent a major drawback to the continued growth of the biofuels industry in tropical regions.”

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