Biofuel: Friend or Foe?
April 22, 2008 in Justice, Life, Poverty/Affluence
Oil prices surge to new record of $118 a barrel!
Oil prices is surging; Food prices is skyrocketing.
The dilemma is: producing more biofuel may drive down the oil prices, but at the same time pushing up the food prices.
Remebered that just few months ago, I interviewed a renewable energy fund manager from US. I asked him about his view on ethanol. He told me that heavy subsidy given to US ethanol industry has been distorting the market, thus creating inefficiency in many ways. Probably that may bring economic instability or may be disaster to the world…..
The time he said that was when oil price is under US$80. Now that the oil price has been rising near US$120. Producing biofuel seems to be a more lucrative business even with less subsidy!
US will divert 18% of its grain output for ethanol this year, in order to become less dependent on oil imports. It has a 45% biofuel target for corn by 2015.
UN Special Rapporteur for the Right to Food Jean Ziegler said, ‘producing biofuels today is a crime against humanity.’
Ignoring biofuel’s potential to boost development would be a ‘real crime against humanity’, Brazilian President Luiz Inacio Lula da Silva responded.
Brazil also produce biofuel. But the key difference is, they use sugar cane, the only biofuel crop somehow considered to be genuinely pays its way so far.
But then, what would be the implication for the seemingly unstoppable rising oil prices?
The numbers may give us some clues:
- A barrel of cruel oil = US$118
- The cost of a barrel of biofuel(from corn)= around US$80 (Goldman Sachs recent estimate)
- The cost of a barrel of biofuel(from wheat)=around US$145
- The cost of a barrel of biofuel(from sugar cane)=around US$35
It takes 230kg of corn to fill a 50-litre car tank with ethanol. That is enough to feed a child for a year. UN predicted recently the “massacres” will continue unless the biofuel policy is halted.
Oil prices surge to new record of $118 a barrel.
While many are worrying about filling their oil tanks, many others around the world are struggling to fill their stomachs.
An abundance of food is in poor people’s fields, but injustice sweeps it away. (Proverbs 13:23)
Thanks a lot for this Francis!
To me it seems really tragic how things that were a good idea turn wrong. When I first heard of biofuels, I admit, my first thought that it is quite a good idea: To shift from non-renewable energy to renewable. But it became clear very quickly that it simply is no good idea to burn food.
The numbers Francis is providing make clear were the problem lies: It has gotten very lucrative to produce food to burn.
The theme of the LWF General Assembly 2010 is “Give us today our daily bread”. It is going to be highly relevant to discuss this theme on the background of the current developments.
Thanks Francis for this really powerful post and for your previous post on the cost of rice.
It’s currently the International Year of Planet Earth and it seems more than ironic that these terrible things are happening in this year. Biofuel seems to me the right thing to use when it is recycled oil from deep fat frying or some thing like that but not when it is food crops, it’s just so crazy.
Even more people being forced into poverty or starvation so that a very few can fill their petrol tanks just seems utterly wicked in the end. We can see it’s wrong but the markets don’t seem able to stop driving the prices higher and higher.
Sorry I’m ranting I’d better stop!