Every now and then a comment arrives on the Incontiguous Brick that is worthy of taking a second look.
Not long ago I posted a pithy picture of an advertisement for rice. Although the photo and my comments were exaggerating the reality today I wanted to point out the odd place we (Americans and the world) are in. Fact is, food is getting scarce in many places in the world and people are getting nervous. There is not going to be a major food shortage in America any time soon (unless perhaps you live on minimum wage) but it is still food for thought. Bill, a longtime reader of the brick, has captured the issue better than I could in his comment. Here it is again in case you missed it:
Regardless of the merits of Global Warming and other environmental issues, implementing a policy that brings two basic needs of people (food and energy) into direct competition with each other is just plain stupid (if I were in a more delicate and diplomatic mood, I’d say “bad policy” or something like that).
To wit: Man has some very basic resources to build and maintain his civilization: water, food, and energy being the top three. Food and energy are two of the more conspicuous factors, since they are notoriously limited with our historical and (even) current technologies. There is a finite amount of arable land and a finite amount of energy resources. Instituting a policy that now makes us use land for energy that would otherwise be used for food is a bad idea.
Why? America can produce enough food for its people, for sure. However, other countries can not (and most of those countries are among the poorest). Surely, rising demand for food will cause supplies to tighten and prices to rise. At the same time, some of the other countries “on the edge” that are ruled by less than savory regimes or individuals will see that they can get X price for a bushel of (crop) on the world market for energy production or they could give/sell it to their own people for Y price (X>Y). Which do you think that a lot of them will do: enrich themselves or help their people?
Meanwhile, as the ethanol project continues and expands more and more, American food will effectively be taken off the market, leaving less for aid or sale to other countries. People/countries will attempt to use other crops that are not efficient for ethanol production as substitute staples, but pressure on LLC will effectively limit expansion of production.
Finally, as pressure on both basic inputs into the economy (food/fuel) increase, the price of both will rise causing severe inflationary pressures.
The end result will be inflation, stagnation, and starvation (in the most vulnerable parts of the world), while neither energy independence nor real environmental progress will be achieved. What a farce and disaster!
That being said, before someone takes a flamethrower to me, I agree that we should be responsible environmentally, but we also have to be pragmatic. People respond to incentives, but the curent policy allocates incentives in a way that invites catastrophe. There are ways to create biofuels without causing massive damage to the environment and without putting more pressure food production (ex. using previously classified “non-arable” lands to produce crops [sawgrass, et. al.]) that can be used to produce alt. fuels. This, along with using “non-competitive” renewable energy resources, is the way to go IMO.