Obama’s Environmental Team: Status Quo We Can Believe In?

December 18, 2008

If anyone needs a reminder that despite the rhetoric, President-Elect Obama is still beholden to the Democratic Party and it’s benefactors, I think this week’s picks for his environmental team should clear things up.

I’ll preface this by saying up front that I know little about either person, but from what I’ve been reading & hearing, environmentalists are unhappy with Obama’s nominations of Tom Vilsack for Ag Secretary and Ken Salazar for Interior Secretary.   Publicly, they are giving hesitant support while hoping that they will be willing to work with them.    Their actions in the first year will probably determine how long a honeymoon Obama has with the green wing of the Democratic party.

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Notes on Food

June 3, 2008

Several news articles popping up this morning about the growing international food crisis…

First, my local paper has the a story about UN Secretary General Ban Ki Moon declaring that world food production must increase 50% by 2030 to meet increasing global demand. This is a huge undertaking that in my opinion will be very hard to accomplish. Increasing output by 50% can be done on a relatively small scale with relative ease in some cases; when you are talking about a project like global food production, though, the scope of work and amount of effort required will be truly massive, especially in an age where the population keeps growing, we keep losing cropland to development, desertification or depletion, and the cost of the fertilizers & pesticides needed to fuel the ‘green revolution’ keep increasing as oil rises.

On a related note, another UN official is accusing the rich nations of the world of ignoring the problem of the global food supply. Between cutting funds for international agricultural relief and subsidizing biofuel production, the rich nations are exacerbating the problem rather than helping combat it. I’ve already argued that diverting food crops to fuel production is a very poor choice both ethically and economically, so I see little need to expound on that. The global credit crisis that we are currently in will mandate nations spending less on overseas philanthropic efforts… they have their hands full taking care of things at home.

Finally, Iranian president Mahmoud Ahmadinejad is continuing to make himself popular with the US government by proposing the creation of a global infrastructure to regulate the food market. Again, he rails against the West and how they are making the food crisis worse instead of better. Interstingly enough, at this same UN conference was Zimbabwean president Robert Mugabe, who has single-handedly destroyed one of the most productive agricultural nations in Africa and plunged his country into a food problem of his own making.

Food will continue to be a headliner for a long while, since prices are going up, and there will be a growing pool of losers in this particular zero-sum game. Much of the food we Americans buy is over-processed, low-nutrient crap, but at least it’s available and can sustain life. Others around the world are not so lucky, and nothing fuels chaos like starving, angry people with little left to lose.

Something to consider is that food inflation is becoming a big problem in the Middle East, which will be bound to contribute to the instability that simmers under the surface of many of the major oil-exporting nations in the region.


No Comment Needed

March 27, 2008

 

The Truth about Corn Ethanol

How Good are Biofuels for the Environment?

February 7, 2008

Another warning about rushing too fast into biofuels

Ethanol and other biofuels will cause more environmental harm than good if the industries continue to expand rapidly, according to a new study by Minnesota scientists published Thursday.

“If we keep moving to get large amounts of energy by growing it on newly-cleared land, which is what’s happening around the world, we’re going to be releasing much more greenhouse gas than the benefits we get from those biofuels,” said David Tilman, ecology professor at the University of Minnesota and one of the study’s authors.

 

This isn’t news to many readers here, I’m sure. These researchers are sure to draw more than their fair share of flak for this report, since the University of Minnesota is part of the corn belt, and ethanol production is a major part of our agricultural & economic policies in rural parts of the state. Bashing biofuels, especially corn ethanol, is almost an act of treason it seems.

The ethanol backers have already fired back, calling the report ‘overly simplistic,’ which is hilarious when you read their rebuttals. You can read the Strib article for a couple of their normal boilerplate defenses of their business. They aren’t refuting the scientists’ claims as much as they are rationalizing their industry. Yawn…

On a related note, here are two interesting links that have calculated the amount of corn needed to produce 1 gallon of ethanol at somewhere between 14 and 21 pounds. For my humble little 4-cylinder sedan, each tank fill would then require somewhere between 200 and 300 pounds of corn. I fill up my car on average about twice per month, so my yearly corn usage would be somewhere in the ballpark of 7200 pounds of corn, or somewhere around 1 acre of corn production. There are 144,000,000 or so automobiles in the USA… tell me again what percentage of gasoline usage we’ll be able to replace with corn?

Will ethanol and other biofuels play a part of our energy future? Yes. The situation will be such that we won’t be able to ignore any possible energy source, at least for a while.

Will ethanol and biofuels become the primary source of transportation fuel? Very, very unlikely in our current living arrangements. Cut the number of cars in America by 50% or more and maybe an argument can be made.


The Dark (Dunkel?) Side of Biofuels

December 7, 2007

Ach mein Gott!

Just as the price of oil approaches the milestone $100-per-barrel mark, the beer industry in Germany is bracing for a 10 percent to 15 percent price increase early next year and as much as 40 percent over the next five years.

The reason for the price boost at beer taps: biofuels.

This isn’t just hitting poor Germans in the barstool… my local homebrewing store has been telegraphing rising grain prices for the last few months, and has finally stated that prices will jump in January and may double over the course of the next year. More news on the subject here.

Rising beer prices won’t make everyone sad, of course, but I think it’s one of those ‘canary in the coal mine’ kind of things… acting as a harbinger of general food price increases to come.


“Agriculture for Energy is an Extremely Stupid Thing”

November 16, 2007

First there were news stories about skyrocketing tortilla prices in Mexico, thanks in part to the increased use of corn for making ethanol.  Now the same thing is happening with pasta prices in Italy.   Wheat prices have been rising along with corn and other staple crops, and Italians are protesting the average 20% increase in pasta prices this year.

As the article note, food prices are rising in many parts of the world due to a number of reasons including poor harvests, droughts, and increased production of biofuels.  The title of this post comes from Barilla Pasta chariman Guido Barilla:

“Wheat makes up 60% of the price,” he says, pointing to a box of penne on a table. What irks him is not so much the public fuss in Italy, which he dismisses with a shrug, but one of the reasons prices are rising in the first place: the growing use of agricultural crops to make ethanol and other alternative fuels. “Agriculture for energy is an extremely stupid thing,” Barilla says. “It’s very inefficient.”

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Interestin’ Stuff

August 17, 2007

There are times life is slow, and times life turns fast. We appear to be entering into the left lane of life for a while…

Economics

  • The stock market continues to see-saw around. It drops during the day and then makes amazing comebacks late in the day. Whether this is truly ‘bargain hunters’ (well-coordinated ones at that), devious machinations of the Fed and their minions, or computerized trading programs deciding it’s time to jump back into the pool I don’t know. The fun & games with subprime mortgage debt continues, with Countrywide Financial (i.e. the largest mortgage company in the USA) feeling the heat hard enough to tap an $11.5 billion dollar line of credit. As explained here, this is akin to you or I getting behind on our bills and having to go to one of those payday loan shops for a loan to go to the grocery store. If your dad finds out about this, he’ll probably give you hell for being such an idiot with your finances. In a similar vein, Moody’s is punishing Countrywide by downgrading it’s corporate bond rating from A3 (pretty good) to Baa3 (one step above junk). Any further downgrading of Countrywide’s rating will spell disaster for the company, as many institutional funds would be forced to sell any bonds now rated as junk. This is the largest home mortgage lender in the country folks, and they have minimal exposure to subprime loans. It’s another example of how the liquidity binge of the last five yars or so is now unwinding and catching a lot of other companies, investors and others in it’s net… and this is probably just the start of this cycle. Read the rest of this entry »