Ethanol Fuel Barely a Couple of Years Term Paper

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¶ … Ethanol Fuel

Barely a couple of years ago bio Ethanol Fuel was the undisputed 'darling' of environmentalists and government policy makers alike. It was being touted as a clean and renewable alternative to fossil fuels that would tame the galloping oil prices, cure the United State's 'addiction' to imported oil, and control the on-going global warming threatening the world's environment. The overenthusiastic proponents of bio-fuels had obviously not catered for the unintended consequences of an untried policy. The large-scale diversion of food crops such as corn for producing ethanol has resulted in sky-rocketing food prices around the world, and precipitated the worst food crisis in decades. It has also prompted a revisit of the purported 'environment friendliness' of bio-fuels since indirect effects of producing ethanol on such large-scale arguably results in greater emission of carbon-dioxide as large forested areas, particularly in the Amazon, are cleared for growing crops. Moreover, even if the highly ambitious plan for producing an estimated 36 billion gallons of bio-fuels by 2022 in the U.S. is realized, it would fulfill only a minuscule amount of the total gasoline requirement in the country. Hence, as argued in this paper, large-scale diversion of food-crops towards bio-fuels is an ill-advised move that could have catastrophic consequences against little gain.

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Term Paper on Ethanol Fuel Barely a Couple of Years Assignment

The most important fallout of diverting food crops for bio-fuel production is the unprecedented hike in global food prices in the last two years. The price of a bushel of corn, for example, which had been historically stable at $2 per bushel breached $4 in 2007 and has now tripled to over $6 per bushel (Rosenwald; Flavin). Similarly almost all grain prices across the board including that of rice and wheat, which are the two most consumed food crops in the world, have more than doubled over the last two years. Rice reached a record $25.07 per 100 pounds on April 24 of this year; wheat price on February 27 set an all-time record of $13.495 a bushel; soybeans touched a record $15.865 / barrel on March 3, and corn traded at an all-time high of $6.39 / bushel on May 9 (Hur).

It could be argued that the recent spike in food and grain prices may be a temporary phenomenon since this is not the first time world grain prices have increased dramatically; it has happened on three other occasions since World War II. However, on these previous occasions, the price-increase was a direct result of unusually low harvests triggered by inclement weather while the recent increase in food-price is unrelated to weather and has occurred due to demand outpacing supply (Brown). It is, therefore, interesting to examine the pattern of supply and demand of food grain in the recent past.

According to the Earth Policy Institute, the annual world grain consumption from 1990 to 2005 climbed by an average of 21 million tons per year. The increase in consumption was mainly driven largely by population growth and rising consumption of grain-based animal products such as poultry feed. Such a steady increase in consumption / demand was predictable and did not cause an abnormal rise in grain prices. After 2005, however, there was a sudden jump in demand, driven mainly by grain consumption in U.S. ethanol distilleries -- rising from 54 million tons in 2006 to 81 million tons in 2007. The extra 27 million ton requirement was one of the main reasons behind the increase in world demand for grain and triggered the abnormal rise in global grain and food prices during the last two years (Ibid).

The food crisis may not have become so grave if the global grain reserves had been sufficiently high. During the 1980s and 1990s until 2001, for example, the carry-over grain stocks had consistently held steady at over 100 days of world consumption. From 2002 onwards, the world's grain stocks started to deplete due to the annual grain production falling short of consumption in seven of the last eight years. As a result, the carry-over grain stocks had dropped to an alarmingly low 54 days of world consumption in 2007 -- the lowest level on record (Source: "World Grain Consumption and Stocks, 1960-2007" -- Earth Policy Institute). In the backdrop of such low levels of grain reserves, the sudden pressure on grain demand by the Ethanol distilleries proved to be the proverbial last straw on the camel's back for world grain prices.

So what have been the effects of the rise in grain prices? Agricultural farmers have generally befitted from the rise in grain prices as have agri-businesses, particularly those which are directly involved in the production of ethanol. Almost everyone else has suffered due to the rising grain price. The effect has been particularly devastating for the poorest of the poor who survive on less than $2 a day. These people have to spend a significant portion of their income on food and any increase in food prices drive them to hunger. Studies previously predicting that the number of hungry and malnourished people would decrease from over 800 million to 625 million by 2025 have revised their projections after factoring in the bio-fuel effect on world food prices, projecting that the number of hungry people is likely to climb to 1.2 billion by 2025 (Brown). The U.N. World Food Programme (WFP) has also been forced to cut down its food aid due to the soaring prices, and reports that 18,000 children are dying each day from hunger and related illnesses due to the cuts in food aid. Unrest and protests against the rising food prices have already taken place around the world: doubling of corn tortilla prices prompted protest marches in Mexico in 2007; there have also been reports of unrest in Pakistan and Indonesia as rise in price of rice and wheat has resulted in widespread shortages. More serious food riots are a real possibility if the food prices continue to rise.

Effect on the Amazon

Another unintended consequence of the rising ethanol production is the threatened depletion of the Amazon rainforest. This occurs in several ways. As farmers in the U.S. continue to divert an increasing percentage of soybean farmland for growing corn, farmers in Brazil are tempted to clear the Amazon forest for growing soybeans to take advantage of soybean shortage and price rise. The attractive soybean price also induces farmers to buy and convert cattle ranches into soy farms, pushing the ranchers further into the Amazonian frontier. Finally, wealthy soy farmers lobby for major new Amazon highways to transport their soybeans to market, and this increases access to forests for loggers and land speculators, leading to further destruction.

Preserving the Amazon rainforest is, of course, crucial to maintaining the fragile global ecosystem: it is believed to be the world's largest carbon sink and sequesters nearly 65 billion tons of carbon annually, preventing nearly a decade's worth of global emissions from entering the atmosphere (Kenny). It also releases significant amounts of oxygen into the atmosphere and its continuing destruction (over 20% of the forest has already been destroyed) would lead to accelerated global warming. According to a Greenpeace report, nearly 5000 square miles of the Brazilian Amazon rainforest were cleared in 2004-2005 to make way for soy fields; increased Amazonian forest fires in 2007, especially in the soy producing states of Brazil, are further tell-tale signs of increased clearing of the forest for soybean cultivation (Kenny; "Corn, Fuel, Fire"). The recent resignation of Brazil's environment minister, Marina Silva -- who was considered to be key figure in protecting the Amazon forest -- confirmed the worst fears of the environmentalists. They believe that she resigned due to growing pressure from within the government to relax laws on rainforest destruction and the 'ethanol' lobby (Phillips).

Corn-based Ethanol is Unviable

The production of corn-based ethanol is an unviable proposition to begin with due to several economic and scientific reasons. Although corn is a renewable resource, corn-based ethanol has a far lower energy yield relative to the energy used to produce it. For example, Brazilian ethanol made from sugar cane has an energy balance of 8:1, i.e., the total energy output derived from sugar-cane-based ethanol is eight times higher that the energy needed to produce it -- i.e., the energy used to irrigate, fertilize, grow, transport and refine sugar cane into ethanol (Goodell). On the other hand, the energy balance of corn ethanol produced in the United States is just 1.3:1 - making it virtually worthless as an energy source (Ibid).

Another drawback of ethanol is its tendency to absorb water, so it cannot be transported in existing pipelines and must be distributed by truck or rail, which is an extremely inefficient and expensive method that raises the price of blended fuel (Carter and Miller; Goodell)

The conception that ethanol is an entirely 'green' fuel is also misleading. Vast amounts of fossil fuel are used in growing corn. Diesel fuel is used by tractors to plow the fields, by trucks to transport the crops and… [END OF PREVIEW] . . . READ MORE

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