Will vested interest in growing, processing and burning biofuels prevail, here and in the USA?

A few days ago a reader sent a link about miscanthus production for biofuel in this country on the website of the alarmingly misguided Natural England – a ‘public body’ largely funded by DEFRA.
Today the FT reports that the UN has called for an immediate suspension of the production of government-mandated US ethanol – most of which is made from corn.

 

José Graziano da Silva, director-general of the UN’s Food and Agriculture Organisation, warns that a US Congress-enacted mandate will divert around 40% of its corn into ethanol despite “huge damage” to the crop because of the worst drought in at least half a century. He foresees that, “With world prices of cereals rising, the competition between the food, feed and fuel sectors for crops … is likely to intensify”. 

State governors, lawmakers, and a coalition of beef, pork, chicken and dairy producers have expressed alarm at surging prices for corn and members of the G20 have also voiced concern about the US ethanol policy. Corn, soyabean and wheat prices have surged between 50 and 30% since June after the US endured the hottest July since temperature records began 117 years ago. The US Midwest farmbelt has seen little rain for months. 

Opposing arguments: 

Tom Vilsack, US agriculture secretary, argues that the US biofuel industry has reduced petrol prices and created jobs. As a former governor of Iowa, he warned that a reversal of the mandate would cause serious economic harm to the region. Un-named analysts add:

  • such a suspension could have a lower impact on food prices than expected;
  • US refiners need billions of gallons of ethanol to meet environmental specifications for their gasoline;
  • ethanol is now a huge component of global energy supplies and the suspension of the mandate could push up oil prices. 
US lawmakers have already cut billion of dollars in subsidies to the sector and officials and lobbyists said several governors planned to join lawmakers next week petitioning the US Environmental Protection Agency, triggering a 90-day legal process that will force the Obama administration to rule whether to waive the ethanol mandate. 
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Posted on August 10, 2012, in Conflict of interest, Corporate political nexus, Government, Vested interests and tagged , , , , , , , , . Bookmark the permalink. Leave a comment.

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