Ethanol demands could raise food prices
By LIBBY QUAID, AP Food and Farm Writer                            Thu Mar 1, 2007

WASHINGTON - Ethanol will devour 50 percent more corn this year, eating into the food industry's share of the crop, the Agriculture Department said Thursday.

From breakfast cereal to beef to beer, competition from ethanol could raise prices for all kinds of foods.

People don't eat the kind of corn that makes ethanol, but cows, pigs and chickens do. And people eat other grains that will become less plentiful as farmers plant more corn. Demand for ethanol is pushing feed prices higher and enticing farmers to switch from other crops.

Farmers are expected to grow a record 12.2 billion bushels of corn in 2007, said Keith Collins, the department's chief economist. An estimated 3.2 billion bushels will go into ethanol, up from 2.15 billion in 2006.

"Even with that increase, we think production will fall short of demand," Collins said during the department's annual Agriculture Outlook Forum.

Agriculture Secretary Mike Johanns downplayed any impact on food costs, saying the department anticipates increases of 2 percent to 3 percent every year. "It can be a dozen different factors from farm to table that can impact that price," Johanns told reporters.

The chairman of the House Agriculture Committee said higher food prices aren't all bad.
"Frankly, we have been underpricing our food in this country," said Rep. Collin Peterson (news, bio, voting record), D-Minn. "What this fuel thing is going to do is cause us to re-price our food to some extent. So consumers are going to pay more, and in my opinion, they should be, because we've been subsidizing them."

Outside the U.S., rapidly growing demand for ethanol could worsen hunger in developing countries, said Greg Page, president and chief operating officer of Cargill Inc., a leading ethanol producer.

Using more crops for fuel puts more pressure on supply and demand, raising the cost of food, he said. "We as leaders should be asking, `What prices are we prepared to make the world's poor pay for food?'" Page said.

At the forum, executives questioned whether the industry can meet President Bush's goal for renewable fuels such as ethanol and biodiesel. Bush wants to require the use of 35 billion gallons of renewable fuels by 2017, a fivefold swell above current requirements.

Patricia Woertz, president and chief executive of Archer Daniels Midland Co., the country's biggest ethanol producer, said she expects breakthroughs in use of crops besides corn for ethanol, although not necessarily enough to reach 35 billion gallons.

"We know the future of energy is not in a single feedstock or even a single product," she said."

Some say the Agriculture Department may be underestimating demand for corn from ethanol plants this year. While the department says 3.2 billion bushels of corn will go into ethanol, the American Farm Bureau Federation anticipates it will actually be 3.5 billion bushels.

Shares of ADM rose 8 cents to close at $34.43 Thursday on the New York Stock Exchange.

Made in Britain, dumped in China

How our waste causes death and disease 6,000 miles from home

By Clifford Coonan in Beijing

Published: 26 January 2007

Mounds of foul-smelling waste stand rotting in the cold air. The dark, smog-choked sky lowers menacingly and the river runs slowly, a black tide of toxic sludge. Sandwich boxes carrying the labels of British supermarket chains poke through the dumps; crumpled pizza wrappers and plastic bags blanket the streets. Working in the middle of it all are children, some as young as four, sifting though the waste with their bare hands.

Lianjiao, a remote Chinese village in the booming southern province of Guangdong, is a long way for a plastic bag to travel; but it is where almost all British supermarket carrier bags end up. And the foil-lined crisp packets. And the triangular hard plastic packaging for your bacon, lettuce and tomato sandwiches from a top high-street chain. Because China is rapidly becoming Britain's biggest rubbish dump.

Regardless of how carefully you separate your waste, there is a good chance a disposal firm will dump it all in together with other kinds of plastic trash and ship it to the developing world to be dealt with by a family of migrant workers earning a pittance. They will deal with the salad-bar container, the pistachio ice-cream container and the superfluous bag for carrots in your shopping basket in a variety of different ways - it may be recycled, it may become landfill or it may simply be burnt.

Whatever happens, it is generally not a priority for the waste disposal company. Britain dumps around two million tonnes of waste in China every year, everything from plastic mineral water bottles to shopping bags and other forms of superfluous packaging from some of the country's biggest supermarkets.

A huge amount of it arrives in 10-ton shipments in Lianjiao, a village which has become a centre for processing plastic waste - much of it from Britain. The high levels of pollution in the nearby river and the poisoned sky are the price of waste disposal in the developing world.

So too are the many and varied health complaints suffered by the local population, who risk multiple skin ailments and exposure to potent carcinogens as they touch the contaminated materials. Poisonous chemical effluents stream into their water supply, turning it black or lurid red, and studies by Greenpeace show that acid rain is the norm in this region. Children are prone to fevers and coughs. Their skin is often disfigured by the toxic plastic waste they have to process. They are victims of Britain's addiction to excessive packaging, highlighted in this newspaper's Campaign Against Waste.

According to figures from China's environmental watchdog, the village handles more than 200,000 tonnes of plastic a year, a big chunk of it imported illegally. "China strictly bans any imports of waste that cannot be recycled as raw materials or be treated harmlessly in the country," according to the State Environmental Protection Administration (Sepa). " Driven by profits, some dealers collaborate with overseas law breakers and illegally smuggle or import rubbish into China, causing damage to people's health and to the environment."

In Lianjiao, plastic sandwich wrappers from British high-street shops are sprayed with chemicals to remove the food debris and then hosed down, the effluent running into the Pearl river, one of the world's most polluted waterways. A large proportion of the plastic waste - that which is not fit for recycling - is burnt in incinerators or kilns, or melted down in acid baths. The air is filled with heady toxic smoke.

The local government has banned unlicensed firms from the plastic-waste business and halted the operation of plastic-waste processing factories that are not equipped with environmental protection facilities.
"But, driven by immediate interests, some local people still try to introduce polluting material into China, posing a threat to the environment and to public health," Sepa says.

Sepa is negotiating with European Union agencies on finding ways to stop cross-border movements of waste and preventing illegal domestic-waste smuggling. The watchdog called on developed countries to respect the terms of the 1989 Basel Convention, which bans the export of toxic rubbish from developed countries to the Third World. The US has not signed up to the agreement, but the UK and other European countries have.

According to Chinese figures, rubbish imports from abroad have grown steadily in the past decade and 70 per cent of toxic plastic produced around the world each year now finds its way illegally into China. Ninety per cent of this waste is broken down in small workshops like those in Lianjiao.

"According to our understanding, a lot of waste is coming from Britain and other places in Europe," says an official. "This damages health all right, but a lot of the workers here are migrant workers who come from even poorer provinces, so it's a sacrifice they are prepared to make." Some of these workers earn little more than £1.50 a day for treating the materials.

No company in Lianjiao has official approval to import waste. There is awareness of the problem at the highest level of government and top environmental agencies have pledged to resolve the issue, but local corruption and the lure of a quick couple of pounds per tonne of rubbish makes it difficult to enforce rules.

A report by the University of Shantou on the town of Guiyu, another Guangdong recycling hub, showed that more than 80 per cent of local children suffer from lead poisoning. Among the plastic at Lianjiao was the wrapping for a pack of Cathedral City cheddar, one of Britain's best-selling brands of cheese. Dairy Crest, which makes the cheese but has no control over what happens to its packaging, confirmed last night the wrapping was non-recyclable.

The company said in a statement: "The food safety laws and our commitment to maintain quality and taste require Cathedral City's packaging to be laminated to act as an oxygen barrier. Therefore, the current packaging is non-recyclable. However, we are aggressively investigating the latest technology to see if it is possible to recycle the packaging in the future."

JOHN FUND ON THE TRAIL
One Word: 'Switchgrass'
Will President Bush emphasize sensible energy ideas, or trendy ones?

Monday, January 8, 2007 12:01 a.m. In the classic 1967 movie "The Graduate," Dustin Hoffman plays a young man with a new college degree but no clear vision of what he wants to do. A family friend insists on giving him career advice: "I just want to say one word to you. Just one word. . . . Plastics." Following the GOP loss of Congress, the Bush White house appears similarly fixated on just one phrase: "alternative energy."

Members of Congress who have recently visited with Mr. Bush in the Oval Office have found him both fixated and fascinated by alternative fuels. "He's all into switchgrass," Rep. Ellen Tauscher, a California Democrat, told the San Francisco Chronicle. She said Mr. Bush was"very engaged and wants to move forward" on bold plans to cure America's "addiction to oil."

The plans will apparently be bold indeed. Recently White House energy policy coordinator Al Hubbard told an audience that Mr. Bush's State of the Union message this month would generate "headlines above the fold that will knock your socks off in terms of our commitment to energy independence." Some observers think that could mean the White House will even embrace a big increase in gasoline mileage requirements.

They note that influential GOP Sen. Ted Stevens of oil-rich Alaska, a longtime foe of such increases, has changed his mind and just unveiled a bill to raise Corporate Average Fuel Economy standards to 40 miles per gallon within 10 years. The Bush White House is clearly interested in not having anyone steal its thunder on energy before the State of the Union. Last month, a federal advisory panel was prepared to release a report that called on the administration to launch a nationwide education campaign to tout the benefits of biofuels and the 'real costs' of oil use.

It also called for the U.S. to produce 13 billion gallons of renewable fuels such as ethanol and biodiesel by 2015, more than double today's level. But the administration was not pleased by the timing. It ordered the panel not to publicize the report because it might upstage upcoming announcements from President Bush.

The report was finally released only after persistent media inquiries about it. Free-market advocates worry that the administration may be about to abandon common sense and embrace alternative energy as a cure-all. They believe that in the current euphoria the 'real costs' of alternative energy aren't fully understood. Take wind energy, long touted as the most economic of renewable energy sources. Ed Feo, a leading wind energy analyst, has estimated that two-thirds of the economic value of wind projects comes from the tax benefits it's given.

As for corn-based ethanol, Jerry Taylor of the Cato Institute calls the current mania to OpinionJournal - JOHN FUND ON THE TRAIL subsidize it "the closest thing to a state religion America has." Corn farmers have done a good job of disguising the fact that it still takes more than a gallon of fossil fuel--29% more is the best estimate--to make a gallon of ethanol.

In addition, various mandates requiring the use of ethanol significantly increased gasoline prices last summer and led to spot shortages because ethanol can't be carried through pipelines and requires special blending plants.

James Glassman, an economist with J.P. Morgan Chase, notes that expensive ethanol was a big factor in the sticker shock consumers encountered at the pump this summer. "We'd probably have retail gasoline prices between $2.30 and $2.40 a gallon if not for ethanol," he told The Wall Street Journal last June, when pump prices were topping $3 a gallon.

The Bush administration recognizes some of these distortions and claims its new policies will seek to mitigate them. The use of switchgrass and other plants to make cellulosic ethanol would negate the need for the energy inputs and fertilizer that go into growing the corn that now goes into ethanol.

The Pentagon's Defense Advanced Research Projects Agency is funding an 18-month project in North Dakota to develop a new military jet fuel made from organic materials that could allow the Air Force to become energy independent. Plans for experiments in oil-shale production--one of the most infamous energy boondoggles of the Carter years--will take advantage of new technology that can remove oil from rocks in place by methods such as heating them, which is cheaper than the old approach of crushing them. One oil company estimates that even after allowing for the use of natural gas and electricity to heat the rock, the energy payoff is three times that which is put in. If true, that makes a lot more sense than corn-based ethanol.

"The Bush administration will reject a Manhattan Project crash approach to alternative energy," says James Lucier, an energy analyst for Prudential Equity Group. "It plans a McDonald's mass-market approach that will seek to drive the costs down to where the market can take over and expand on them." It's a foregone conclusion that Mr. Bush's State of the Union speech will be full of paeans to the prospects for switchgrass, solar panels and the conversion of turkey waste into diesel fuel.

Some of these ideas are genuinely exciting and indeed hold promise to achieve greater energy independence. But here's hoping in his fervor for alternative energy, Mr. Bush doesn't forget that he should also press for fewer restrictions on nuclear power--a remarkably safe and clean energy source--as well as more ways to safely explore for oil and gas in Alaska and off the coasts of states that welcome offshore energy development.

Alternative energy is an ever-expanding fad right now, but Mr. Bush should remember that fads pass. When that happens, the country will be better off with a balanced approach that combines excitement for the new with sober reliance on tried-and-true sources that keep today's economy humming.

Such an approach would also help Mr. Bush meet another of his self-proclaimed major goals: "making sure the federal government prudently spends tax dollars and restrains wasteful spending."

The world in 2050
Impact of global growth on carbon emissions
This report was produced by PricewaterhouseCoopers in advance of the Stern Review report
published in the UK on 30 October 2006

The rapid economic growth of emerging countries such as China and India — together with continued more moderate growth in today’s advanced economies — could have serious long-term consequences for global energy consumption and carbon emissions. The projections demonstrate that if countries sit back and adopt a "business as usual" approach, the result could be a more than doubling of global carbon emissions by 2050. Based on current scientific thinking, this could have potentially serious longer term implications in terms of global warming and related climate change. On the other hand a scenario such as the "Green Growth Plus" strategy outlined in the report could allow for continued healthy growth whilst controlling carbon emissions. These are just some of the points highlighted in a new PricewaterhouseCoopers (PwC) report entitled The World in 2050: Implications of global growth for carbon emissions and climate change policy.

The report considers six possible scenarios but focuses most
attention on two key possibilities:

• A baseline scenario in which energy efficiency improves in line with trends of the past 25 years, with no change in fuel mix by country; this ‘business as usual’ scenario acts as a benchmark against which to assess the need for change, rather than as a forecast of the most likely outcome; and
  
• A scenario called Green Growth + CCS, which incorporates possible emission reductions due to a greener fuel mix, annual energy efficiency gains over and above the historic trend, and widespread use of carbon capture and storage (CCS) technologies. Of the scenarios considered in the report, only this ‘Green Growth Plus’ strategy stabilises atmospheric CO2 concentrations by 2050 at what the current scientific consensus suggests would be broadly acceptable levels.

The report also indicates how carbon emissions might need to evolve by country to achieve the Green Growth + CCS scenario, as summarised in the charts below. We can see that the G7
economies will need to reduce their current level of emissions by around half by 2050 to achieve this scenario, whereas the E7 economies would still be able to increase their emissions by around 30% from current levels.

These charts also show the growing weight of the E7 emerging economies (particularly China and India) in global carbon emissions relative to the current G7 advanced economies. According to the model, China is set to overtake the US as the leading carbon emitter by 2010, while total E7 emissions would be more than double total G7 emissions by 2050.

Together the ‘Big 3’ economies (China, US and India) are projected to account for just over half of global emissions by 2050 in both our Baseline and Green Growth + CCS scenarios (though the absolute levels of emissions are much lower in the latter case), up from around 45% today. The EU’s share of global emissions is set to decline from around 15% now to just under 9% by 2050.

John Hawksworth concludes: "Our analysis suggests that there are technologically feasible and relatively low-cost options for controlling carbon emissions to the atmosphere. Estimates suggest that the level of GDP might be reduced by no more than around 2-3% in 2050 if this strategy was followed, equivalent to sacrificing only around a year of economic growth for the sake of reducing carbon emissions in 2050 by around 60% compared to our baseline scenario.

"But if this is to be achieved, it will take further concerted action by governments, businesses and individuals over a broad range of measures to boost energy efficiency, adopt a greener fuel mix, and introduce carbon capture and storage technologies in power plants and other major industrial facilities".

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