New Studies Suggest that Biofuels Create Much More Carbon Than Oil/Gas

While Congress keeps increasing its biofuel mandates, scientific evidence is emerging that proports that biofuels are an environmental disaster and make oil look as innocuous as solar panels in comparison.

From the WSJ today:

A study published in the latest issue of Science finds that corn-based ethanol, a type of biofuel pushed heavily in the U.S., will nearly double the output of greenhouse-gas emissions instead of reducing them by about one-fifth by some estimates. A separate paper in Science concludes that clearing native habitats to grow crops for biofuel generally will lead to more carbon emissions.

Some earlier studies didn't account for one hard-to-measure factor: the decision by farmers world-wide to convert forest and grasslands to grow feedstock for the new biofuels.

Such land-use changes can have big and unintended consequences, such as food shortages and reduced biodiversity. For example, when forests or grasslands are converted for agricultural use, it leads to a large, quick release of carbon when the existing plant life is destroyed and the soil is tilled. Even if biofuels are grown on cropland previously used to grow food, farmers tend to then clear other forests and grasslands and grow the food elsewhere.

"Even if we're dramatically wrong, it's hard to get to a result that says you get a benefit over 50 years," said Timothy Searchinger, a researcher at Princeton University and a co-author of the paper on corn-based ethanol.

Way to go Congress for mandating a worse ecological disaster to replace the optional one. This issue alone makes me fervently support a national primary so that corn-growing Iowa loses its disproportional influence on US policy.

Clinton's $70BN Plan to Help the Economy

Hillary Clinton has a huge tax-payer funded plan to help the economy as it slides into recession. The problem with it is that it is backed by a belief that the government, and not the private sector, is the cure to what ails us. Amity Shlaes, in her brilliant book The Forgotten Man methodically takes down the myth that FDR saved the country by making much of the workforce government employees and instead argues that FDR slowed recovery by creating government competition to the more efficient private sector.

Enter Clinton. Her plan is to spend $70BN in the following ways:

Her $70 billion plan includes $30 billion for a housing-crisis fund to provide grants to states, cities and community groups. The money would assist families in danger of foreclosure and buy vacant properties to rent to needy families. Another $25 billion would aid low-income families facing increased home-heating costs; $10 billion would supplement unemployment assistance to workers out of jobs for extended periods, and $5 billion would be aimed at promoting energy efficiency while creating "green industry" jobs.

My one by one counters to her plan:

1) Allocating $30BN of taxpayers' money to delinquent mortgage payers is extremely unfair to property owners who are responsible and to renters, who already get screwed in the tax code. Most if not all of the delinquent payers put no money down.

2) $25BN for home heating costs. They are indeed skyrocketing, at least for Americans, as the dollar is in a death spiral. But do we need to subsidize energy costs when we are trying to to go green (see #4)? If you really want oil prices to decrease then tell the Fed to RAISE interest rates and protect the dollar.

3) Unemployment assistance, $10BN: There is no proven relationship between government assistance and employment attainment. There are already Pell Grants for the needy to take classes.

4) Creating "green jobs." $4BN for that. What is that? I can't even criticize this point as it is so vague. Perhaps Clinton could back away from her backing of anti-green Ethanol subsidies and create a bunch of green jobs for farmers who actually grow food that can be eaten.

Congress Ate My Steak

I was about to order the prime steak at my favorite local restaurant when I noticed the new price: $46. That is up from $36 the last time I ordered it a few months ago. The reason: beef prices are skyrocketing in tandem with corn prices, which are skyrocketing because of growing demand for ethanol. Corn prices increased 80% in 2006 alone and might double this year.

The Energy Bill of 2005, through a combination of subsidies, tariffs and mandates, caused the massive food inflation that is occurring. Congress didn't like $3/gallon gas so they created $3/gallon milk. Oh, and they also made steak a luxury food again.

Ethanol Poised to Destroy World Economy

The US government's embrace of ethanol as a solution to reducing fossil fuel dependence will likely go down as one of the biggest economic policy blunders of the modern age. The reason is so obvious that only the government could fail to grasp it: ethanol will cause wide-spread inflation. Ethanol is corn-based and as demand for ethanol rises, so do corn prices. As corn prices rise, so do the prices of anything that contains corn or high fructose corn syrup, which is ubiquitous. The price of corn-fed meat also rises. Finally, as corn fetches high prices farmers stop growing other crops to replace them with corn, and so those prices rise as well. So while next year's corn crop is expected to be the biggest in 60 years, the cotton crop in the South will be the smallest in 30 years and soy and other crops will also be greatly reduced.

Welcome back to the 1970s. Ethanol-induced inflation is already rearing its ugly head, according to this article in today's WSJ [subscription only].

The U.S., too, is seeing some stirrings, with food costs rising 3.1% in February from the year before -- a rate one percentage point higher than in mid-2005. Economists say U.S. food prices are expected to rise faster than the general rate of inflation this year. Wholesale prices of meat, poultry and eggs have already increased.

If the trend continues, U.S. consumers are likely to see higher prices at the supermarket for everything from milk to cereal to soda pop, since corn is used to feed livestock and make high-fructose corn syrup, a key ingredient in many soft drinks. A spokesman for the National Chicken Council, a poultry-industry group, recently testified to a congressional subcommittee that Americans should expect higher chicken prices because of what the group described as "the ethanol crisis."

More here. Competitive Enterprise Institute has a great paper here that points out the massive land costs of ethanol. A NY Times article here reports on environmentalists' concerns about the fuel. When CEI and Earth Policy Institute agree on something, you know it has to be indisputable. Yet the government fails to see the glaring fluorescent light and Bush continues to push ethanol, even talking about it in the SOTU.