Little Logic in This Ethanol Support

In an interview with green2tech

 

10 Questions for Poet’s CEO Jeff Broin « Earth2Tech.jpg


from: Earth2Tech
(click image for full story online)

 

Jeff Broin of ethanol producer Poet said the following

8). In the great debate over how much corn ethanol is affecting food prices, what do you think about some newer reports that have said biofuels have affected food prices significantly?
Every study depends on the assumptions of its author, and the opponents of renewable fuels have been able to generate a few that say what they want. Almost every independent study I’ve seen has said that ethanol production has had a very small impact on the consumer’s price for food, especially in comparison to the impact of rising energy prices.

A study from the Agricultural and Food Policy Center at Texas A&M said, “The underlying force driving changes in the agricultural industry, along with the economy as a whole, is overall higher energy costs, evidenced by $100 per barrel oil.” Just do the math. A semi can haul 4,200 boxes of corn flakes at a time, and with 10 ounces of corn in each box, that’s a total of 46.9 bushels of corn. At a $6 bushel, the corn in all 4,200 boxes has a value of $281.40. To haul those boxes 1,500 miles, however, would cost $881.25 with diesel priced at $4.70 per gallon. That means it takes 21 cents of diesel per box to get it to the store, yet the value of corn in that box is less than seven cents. What do you think is the real driver of higher food prices?

But this study surely has nothing to say about biofuels not pushing up the price of food? In fact what would the fuel cost have been if the truck was run on biodiesel?

Its also flawed in that the calculation is for $100 crude & $ 4.70 / gallon diesel – even at $50 crude and the corresponding diesel price of $ 2.86 / gallon (extrapolated from GasBuddy data) the diesel cost is still 13 cents. This is a of food retail and consumer demands not fuel costs!

 

Gas Price Historical Price Charts - GasBuddy.com.jpg


from: GasBuddy
(click image for full story online)

 

Lets not even start calculating the packaging cost and the wholesale and retail margins!

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2 Responses to Little Logic in This Ethanol Support

  1. Stephen Klaber says:

    Why think in terms of corn? There is better biofuel feedstock scattered throughout Africa, and causing trouble. Aquatic weeds choke African waterways. All can be used as biomass, but Typha appears to be the biomass champion. Simple clearance of these weeds would help with many African problems: Flooding, drought, desertification, malaria… there are many aspects. But clearance is a never ending task that can be sustained with the profit from the ethanol that can be produced. Not only that, but when Typha is grown in clean water, it is a champion food crop too.

  2. daveharcourt says:

    This post is really about how bad the arguments used for corn are.

    I think maize is with us for sometime given the investments made, the vested interests and the state of development of cellulosic technology. Even when celluloisic comes it is always going to be a logistics issue for any waste – wastes are often too broadly spread and with Africa’s infrastructure it is exagerated. I always refer to a study in USA on switchgrass which revealed that there needed to be a 35 ton truck delivering to the plant every eight minutes 24 hours a day, 7 days a week.

    I personally also have a bit of a fear of the way African countries are being talked into becoming the raw material supplier to biofuel producers. As the economics changes Africa will again be pressed and compelled to supply at lower and lower real prices – the cocoa story again.

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