It’s an issue that can’t be generalized, according to Gustavo Best, senior energy coordinator for the Food and Agriculture Organization of the United Nations (FAO). Ethanol production is going to have different effects in different areas of the world. “You cannot say all over the world it is positive or all over the world it is negative,” Best tells EPM, explaining that the organization is studying the issue.
The food-versus-fuel debate is something that has cropped up in the news repeatedly. So far, it hasn’t been easy to gather a consensus—even among executives from companies involved in the biofuels business. Agribusiness giants Archer Daniels Midland Co. (ADM) and Cargill Inc. conducted something of a mainstream media sparring match over the issue in May. It started when The Associated Press (AP) reported that Warren Staley, chairman and CEO of Cargill, said agricultural land should be used to produce food, feed and, lastly, fuel. G. Allen Andreas, chairman of ADM’s board of directors, responded the next day, saying there is plenty of capacity in the world to grow food. ADM is the world’s largest producer of ethanol.
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Cargill spokesman Bill Brady tells EPM that Cargill sees its role in the growing ethanol industry as increasingly active. The company’s production capacity will nearly double by 2008. Soon, the company will have the ability to supply, through its own production and marketing agreements with other facilities, almost 1 billion gallons of ethanol annually, Brady says. Still, while Cargill recognizes that biofuels have a role to play in meeting America’s energy needs, the company also wants to be responsible. “We have publicly cautioned against over-exuberance and have called attention to the challenges of meeting both food and fuel needs in the event of a short crop,” Brady tells EPM.
At press time, ADM had not fulfilled requests from EPM for an interview on the subject.
Becoming yet another person to chime in on the debate, the AP in July quoted Eric G. Holthusen of Royal Dutch Shell, saying that turning food into fuel was “morally inappropriate.” In a subsequent newspaper article, another Shell representative distanced the group from the comment made by Holthusen, an Asia/Pacific fuels technology manager.
Steve Brown, a Shell spokesman that works in the area of the commercial aspects of biofuels, tells EPM that Holthusen’s comment was unfortunate. It doesn’t fully represent Shell’s policy on ethanol or biodiesel, he says. Shell, which handles 3 billion liters (793 million gallons) of biofuels yearly, mostly in the United States and Brazil, is concerned with providing its customers with sufficient energy supplies in a sustainable way. "There is no one solution to the world’s demand for energy, and biofuels is one part of that package," Brown tells EPM.
In 2002, Shell invested in Iogen Corp.’s cellulose-to-ethanol pilot plant because, company officials said, the oil giant believes Iogen is on the frontier of technology that will lead to lower ethanol costs. Although Shell doesn’t believe second-generation biofuels will replace the current grain- and sugar-based global ethanol industry, cellulosic ethanol provides benefits, such as producing less greenhouse gas emissions than ethanol made from corn, Brown says. The company is also interested in or working with other companies on technologies that would produce synthetic diesel, natural-gas-to-liquids and, in the longer term, hydrogen as energy alternatives.
Lester Brown, president of Washington D.C.-based environmental research group Earth Policy Institute, was also quoted by the media on this issue in July. He’s worried that the world’s most needy people will be the losers in the race to ramp up global ethanol production. The ever-increasing amount of corn used for ethanol is of growing concern to countries that import U.S. corn, he tells EPM. The livestock and poultry industries, which provide meat, milk and eggs, may also feel the crunch. “You have to wonder if there is going to be enough to go around,” he says.
Using his own calculations, Lester Brown says the amount of grain it takes to fill a 25-gallon tank with 100 percent ethanol would feed one person for a year. He bases that on using about 10 bushels of corn to produce 25 gallons of ethanol, he tells EPM. That amount of corn weighs about 570 pounds, near the world average consumption of grain. In poorer countries, such as India, that number is 400 pounds, however.
For the 2 billion poorest people in the world, raising grain prices can quickly become life threatening, as well as generate political instability, Lester Brown says. If the ethanol industry continues growing as it has, pushing grain prices higher and higher, he predicts the U.S. government may have to step in to iron out the conflict between fuel-hungry motorists and the poor. He says ethanol could be a good thing if it were based on surplus capacity, but the current growth scares him. “I think it’s sort of spiraling out of control with no one in charge,” he says.
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