Left’s Favorite Economist Paul Krugman: Biofuels Are A Scam
Nothing sarcastic in the headline, he is a committed Leftist, and the Left loves him. For just the very nitty gritty without full context, scroll down to the bolded. Let the cannibalism begin…
NY Times:
by Paul Krugman
“Grains Gone Wild”
These days you hear a lot about the world financial crisis. But there’s another world crisis under way — and it’s hurting a lot more people.
I’m talking about the food crisis. Over the past few years the prices of wheat, corn, rice and other basic foodstuffs have doubled or tripled, with much of the increase taking place just in the last few months. High food prices dismay even relatively well-off Americans — but they’re truly devastating in poor countries, where food often accounts for more than half a family’s spending.
There have already been food riots around the world. Food-supplying countries, from Ukraine to Argentina, have been limiting exports in an attempt to protect domestic consumers, leading to angry protests from farmers — and making things even worse in countries that need to import food.
How did this happen? The answer is a combination of long-term trends, bad luck — and bad policy.
Let’s start with the things that aren’t anyone’s fault.
First, there’s the march of the meat-eating Chinese — that is, the growing number of people in emerging economies who are, for the first time, rich enough to start eating like Westerners. Since it takes about 700 calories’ worth of animal feed to produce a 100-calorie piece of beef, this change in diet increases the overall demand for grains.
Second, there’s the price of oil. Modern farming is highly energy-intensive: a lot of B.T.U.’s go into producing fertilizer, running tractors and, not least, transporting farm products to consumers. With oil persistently above $100 per barrel, energy costs have become a major factor driving up agricultural costs.
High oil prices, by the way, also have a lot to do with the growth of China and other emerging economies. Directly and indirectly, these rising economic powers are competing with the rest of us for scarce resources, including oil and farmland, driving up prices for raw materials of all sorts.
Third, there has been a run of bad weather in key growing areas. In particular, Australia, normally the world’s second-largest wheat exporter, has been suffering from an epic drought.
O.K., I said that these factors behind the food crisis aren’t anyone’s fault, but that’s not quite true. The rise of China and other emerging economies is the main force driving oil prices, but the invasion of Iraq — which proponents promised would lead to cheap oil — has also reduced oil supplies below what they would have been otherwise.
And bad weather, especially the Australian drought, is probably related to climate change. So politicians and governments that have stood in the way of action on greenhouse gases bear some responsibility for food shortages.
Where the effects of bad policy are clearest, however, is in the rise of demon ethanol and other biofuels.
The subsidized conversion of crops into fuel was supposed to promote energy independence and help limit global warming. But this promise was, as Time magazine bluntly put it, a “scam.”
This is especially true of corn ethanol: even on optimistic estimates, producing a gallon of ethanol from corn uses most of the energy the gallon contains. But it turns out that even seemingly “good” biofuel policies, like Brazil’s use of ethanol from sugar cane, accelerate the pace of climate change by promoting deforestation.
And meanwhile, land used to grow biofuel feedstock is land not available to grow food, so subsidies to biofuels are a major factor in the food crisis. You might put it this way: people are starving in Africa so that American politicians can court votes in farm states.
Oh, and in case you’re wondering: all the remaining presidential contenders are terrible on this issue.
One more thing: one reason the food crisis has gotten so severe, so fast, is that major players in the grain market grew complacent.
Governments and private grain dealers used to hold large inventories in normal times, just in case a bad harvest created a sudden shortage. Over the years, however, these precautionary inventories were allowed to shrink, mainly because everyone came to believe that countries suffering crop failures could always import the food they needed.
This left the world food balance highly vulnerable to a crisis affecting many countries at once — in much the same way that the marketing of complex financial securities, which was supposed to diversify away risk, left world financial markets highly vulnerable to a systemwide shock.
What should be done? The most immediate need is more aid to people in distress: the U.N.’s World Food Program put out a desperate appeal for more funds.
We also need a pushback against biofuels, which turn out to have been a terrible mistake.
But it’s not clear how much can be done. Cheap food, like cheap oil, may be a thing of the past.
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Cripes!
WHY does it take the Left so damn long to catch up to me/us?
If at all …
As for more money for the U.N. being the answer … {fffphehhh!}
April 7th, 2008 at 2:16 pmwait a sec… isn’t ethanol simply made from fermenting a grain mash with an alcohol producing bacteria of some sort and then distilling the ethanol out of it?
that must be REALLY energy intensive!!!
i’ll bet it takes less energy to distill ethanol than it does to get gasoline distilled out of crude oil!!
http://www.madehow.com/images/hpm_0000_0002_0_img0105.jpg
April 7th, 2008 at 2:17 pmIt’s all Bush’s fault-don’t you know?
April 7th, 2008 at 2:21 pmOh, by the way…biofuels have turned out to be a terrible mistake?
Just thought he’d throw than in before he signed off. Cripes.
North to Alaska! Krugman is full of shit on the supply issue re the Iraq front on the war against radical islam. In 2007 iraq produced 3.7 billion barrels per day. Previous record was 3.5 bpd and the average before the battle was 3.5 bpd. Another lying fucking liberal.
Here is my simpleton idea for our energy needs.
If’n I ran the U.S., we would immediately go north to Alaska, bring a bunch of teamsters to work on the project. Also head to the Gulf of Mexico and begin to draw on our fossil fuel resources. This would pressure the opec states to either lower production to keep up prices, or increase production, lowering prices in an attempt to slow our development. Either way would not matter.
We would then create a coalition of big brains, and commercial energy companies to bring forth tenable options and solutions to our growing energy needs. To be valid they would have to make their products and solutions marketable to overcome the efficiency of fossil fuels. A reasonable tariff on our own oil would help fund research. The new wealth created would be incentive enough without massive regulations. In a perfect world it could also make us more powerful than opec as a supplier of cheap power.
The NASA example is often given, and it really is valid, the return on technological development from NASA projects is huge. I remember once reading that for each $1 into NASA, it returned $7 to our GDP. As we then advance alternatives the use of fossil fuels would drop and we could become even more ‘green’. Our economy cannot just turn 180 degrees from usage of fossil fuels overnight without massive stress and reduced growth.
But, the first thing I would do, by Presidential decree, is put giant wind farms offshore of the Kennedy compound and Streisand’s residence.
April 7th, 2008 at 2:27 pm^^ average was 3.0 bpd
April 7th, 2008 at 2:39 pmhey caligula?
April 7th, 2008 at 2:41 pmwhat do you think they use to plant the corn? harvest the corn? take the corn someplace where they make alcohol? and last but not least, the ethanol plant probably doesnt run on solar power…. ya think?
Steve’s right, big wind farms, screw Ted. Fat bastard should be rotting in prison right now.
April 7th, 2008 at 2:44 pmDrill in Alaska, build refineries again, tell this blow-hard to shut the hell up. Oh yeah, and pull his head out of his ass. He’s the only person left who doesn’t think Iraq is turning around.
Spanks … ummm, thanks!
April 7th, 2008 at 3:00 pmThey do not want anything that works. They are trying destroy capitalism and the foundations of America. They are succeeding, with the help of the MSM. First, they only support alternatives to what works. They then make what works cost too much by encouraging leftists in congress to pass laws to punish success. Then, when the alternatives get to be successful, they attack them, leaving us nothing. When the price explodes because of their interference, they blame the producers. On and on and on and on….
April 7th, 2008 at 3:29 pmBiofuels were always energy sinks. However, anyone who said it was in the pocket of “big oil.” Now, it’s bad for the environment.
Additional high costs in ethanol and other biofuels is transportation. They tend to clog pipes that now carry gas and oil. Does this mean that we use trucks to transport them? Trucks running on…? Additionally, the cost of production and infrastructure to make and support usage - refineries, OSHA, etc.
North to Alaska, and kick the Chicoms off of Cuba and out of the Gulf of Mexico! Not to mention nucleur and coal.
April 7th, 2008 at 3:55 pmDon’t forget about the oil that’s suppose to be off our east coast. We should be drilling off our NC coast, SC coast and Florida. Until we drill where they say there is oil OPEC has us.
April 7th, 2008 at 5:36 pm“— which proponents promised would lead to cheap oil — has also reduced oil supplies below what they would have been otherwise.”
As usual Krugman only gets it 1/4 right. Steve said it best.
April 7th, 2008 at 6:09 pmThis country hasn’t come close to harvesting its own natural resources. Biofuels are a more expensive option than plain old gasoline. Ethanol is far more expensive to produce than gasoline. Corn-based additives are the wrong way to go anyways. Cane sugar and recycled cooking oil are better alternatives.
However, the end-game needs to be refocused on getting off of ME oil and producing our own energy from our own energy resources which we got plenty of.
Step one: Tell the bug-fucking tree huggers to go fuck off.
April 7th, 2008 at 7:52 pmStep two: Tell Congress and the candidates to let go of their trees and fuck off.
Step three: Start drilling in Anwar…all of it…
There isnt enough arible land or water to make enough corn for enough ethanol conversion to make a dent in our fuel consumption. Think about it, It took the earth billions of years to make what will be blown through in 250 years, tops.
Fully developed, ANWR might have 5 years of US oil consumption in it. It will take 20 years to recover it though.
We need to do what the UK is doing; significant public transportation and 1000cc turbo diesels for personal transportation. Conservation will only help.
This is coming from a guy that has 2 60’s Plymouths with big blocks. Personally, I’ll live large until they pry that last gallon from my dying hands, lol.
April 7th, 2008 at 8:15 pmSteve-> Your opinion about alternative energy is more or less the same as mine, for a couple of years now. I hope the US will go for this and be the worlds number one leader again. (I am not from the US) The free West simply cannot rely on other countries.
Dont feel personally offended with my IQ remark, its a general remark based on my conversations with ( yes educated people) Americans; every time I started with alternative energy resources, I was put in the Left corner and that was the end of discussion. I am happy there are more Americans thinking deeper.
My thoughts are not deep enough,I still cant figure out why the US continues to be so oil based. The only strategical reason I can think off is to dry out foreign oil resources. But thats a risky one and will take too long. (Strategical reason as in the general interest for a country not as in the interest for an American oil-elite. Curious about your opinion in this.
The above discussion is an old one, biofuels will harm nature and drive up food prices.(Naive leftists in Euope are still getting a hard one from biofuel) They only work when the bio fuel is derived from a recycled product, and even than its still a phase to furher develop to real functioning systems like hydrogen which will only be effective when the hydrogen process is fuelled up by clean power, which is not yet completely possible.
Solar based home systems combined with electrocars (no not golf cars:), is also a good bet for the future
April 8th, 2008 at 1:06 amI have participated in the ethanol industry and have profited some. First, I have sold equipment to a couple of plants, second I was asked to be a plant manager for one to be built in Central Mississippi, and third I one of the cancelled plants has consigned its uninstalled equipment to me to sell.
What the rush to produce biofuels has done is make a lot of money for a few agribusiness multinationals in importing a lot of the stuff from Central America with plants that were thrown up much quicker than could have been possible in the U.S.
Since I buy and sell process equipment for the chemical industry, I can say with authority that for the last three years, the large used equipment dealers have been looking forward to the day when the fraud has been exposed and a lot of very good equipment is available to purchase and sell.
The only real use for ethanol is as an oxygenator to replace the now outlawed MTBE. The EPA mandates the use of oxygenators in gasoline sold in areas that do not meet air standards. This is another reason for increase in the price of gasoline, while only several cents per gallon, it still adds up.
BTW, a number of ethanol plants are operating at little more than 50% capacity, and several projects have been cancelled. Any of those standing have been built with considerable subsidies usually at 20 to 30 cents per gallon produced.
Now we also get the promise of ethanol from celluse feedstocks. The problem that I do not see addressed is that ethanol from grain is only feasible with sales of the distillers dried grain solids (DDGS) as a CO-PRODUCT of ethanol. Without such value added products it is cheaper to make ethanol out of hydrocarbons than grain. Another value addes product of grain ethanol production is the CO2 produced by the fermentation of grain. Oops that is non-PC to say, that CO2 has commercial value. Just think Coca Cola and similar products and you can see where a lot of it is used.
I foresee a lot of ethanol plants going to China in the form of stainless steel scrap as well as some good re-usable equipment within the next couple of years, or after the bankruptcy courts sell them.
April 8th, 2008 at 4:33 amThe Leftys’ use of “climate change”, (formerly known as global
April 8th, 2008 at 5:16 amwarming) is not about reducing the effects of carbon dioxide on
the Earth’s climate. If it was, then the Leftys would now be saying,
perhaps it isn’t as bad as we feared. The Earth is not warming up
and recent trends suggest a cooling period has begun.
Like all good Leftys believe, The End Justifies The Means.
Once Karl Marx wrote Das Kapital and the Russian revolution happened,
Leftys thought it was self apparent that their new movement would
spread to everywhere on Earth.
It didn’t.
In fact, most people wanted nothing to do with an absurd dogma more
suited to ants than humans. Could the Left admit defeat? No.
The new theory that evolved postulated that communism, now called
“social justice”, had to be forced upon mankind - then and only then
would we realize the benefits that communism offered.
Nobody bought it.
Something more was needed.
A stupidly new idea emerged from the fringe. The Earth would get
hotter and hotter due to the activities of mankind.
Er, so what?
So nothing, so far.
The discovery moment was when some Lefty realized that the people
of the various countries could be sold the idea that not only was
doom imminent, but that no country’s individual effort could
solve the non-existent problem. In other words, we could
revolutionize the USA’s energy infrastructure but China would still
be there, killing the Earth. Aha! We need to work together as one
world.
Bingo!
In order to do that, new world orders would need to be introduced.
Strangely, the so-called carbon credits trading system so loved by
europe would transfer trillions of bucks from the West to the
third world. Commies call that “social justice” by the back door.
The UN would have to be in charge of everyone. And personal
luxuries like driving cars or flying away to holidays can at last
be subjected to government laws, (except of course for those upper
echelon bureaucrats who need to travel to climate conferences in
Sumatra - commie officials always knew how to take care of themselves).
Bottom line: Global warming is a scam, proposed by those who want
more control over your lives. Just say no.
Stay free and don’t worry. There will be a shortage of oil in
the future. Everyone knew that. The “problem” caused by the burning
of fossil fuels is self-limiting, if it even exists at all.
The real question: How do we, as a nation, get ready to move to
the next new energy source. The lefty who started the article says
it isn’t bio-fuels. Indeed. If we propose nuclear he would say it
ain’t that either. That is because the leftys do NOT want the
problem solved. If science solves the problem then no big social
change is needed. And the priority is BIG SOCIAL CHANGE.
Scientists not wanted - not in Lefty-Land.
Just say no, or something more anglo-saxon than that.
Global usage was 8o million barrels per day in 2004.
The US usage was 20 million barrels per day in 2004.
Follow the money; cheap, efficient and available. I do not think it is some big conspiracy, just the best answer now.
To change this it will be market driven.
The darling prius no longer is propped up with gov’t give backs based on tax credits and now it is found in some rental fleets and the dealers are offering discounts.
The biggest use of petroleum is in the transportation sector. We are seeing the effect on inflation as the cost of goods and services are impacted by higher pump prices. The idea that we can increase taxes on fuel to force conservation is valid, and that conservation will be reflected in a slowing and possibly faltering economy. That’s why the leftists and elitists have no problem with that concept, they can afford it. The middle class family on tight budgets will be affected and spending in the largest markets will slow.
April 8th, 2008 at 6:22 amWe need energy as cheap as possible to help keep our market economy growing. A strong economy is vital to our nations security and to hamstring it on pollyanna ideals invites disaster.
The development of hi tech in the latter 20th century will help us to develop alternatives faster. I do think the greatest source is solar, since it does drive the earths environment, that is unless you listen to the goracle.
Until we figure that out, we can develop ‘cocktails’ of sources to feed the need.
To see how f*cked up the well meaning govt can be, look at the ethanol requirements that have driven the cost of food up. Yep, the elitists and wealthy can afford it, but you little people, sorry you get to take the hit.
Folks,
Ethanol is a terrible fuel. Leaving aside all the inefficiencies, and added expenses of transporting it… if it just flowed out of rocks in the Big Rock Candy Mountain, it would still be a lousy fuel. Lousy in that it releases very little energy. Just because something burns doesn’t make it a good (efficient, less trouble than it’s worth) fuel.
Krugman is (in)famous for almost always being wrong, but he’s swerved, though terribly late, and still wrong in many of his details, into basic truth here.
Ethanol is a lousy fuel. Which is why people would rather drink it — it’s drinking alcohol — than drive it.
Subsidizing it is just as stupid as buying batteries to run your home radio and thinking that you are “saving” electricity.
As for Krugman, he should stick to what he knows — being wrong about the economy — and not branch out into being wrong about climate. Droughts happen. Always have. Shipping millions of air conditioners to Australia would simply have caused other, equally bad problems.
There’s an old joke about government:
If it’s moving, Tax it.
If it’s still moving, Regulate it.
If it stops moving, Subsidize it.
Undo that nonsense.
One thing we know for absolute certain about oil is that the more we look for it, the more we find. The Left has succeeded in preventing us from drilling for oil in our own country for decades; from building ANY new refineries; AND from putting to use a truly marvelous alternate source of energy that other advanced economies use every day to produce most of their power: Nuclear. The freakin’ JAPANESE use it, for crying out loud.
I mean…Hello?
We have tolerated, and indulged the childish ignorance of many, and the malevolent, hidden agenda of some in the Left for too long. The Cubans, and Chinese are going to start drilling off Florida, for pete’s sake. We can do it safely, and cleanly. They can’t, or won’t.
Drill Caribbean. DRILL ANWR. Take a peek in old, capped wells.
Hunt for more oil. Mine Coal.
Ignore junk science. Better yet, LAUGH AT JUNK SCIENCE.
We have proved that oil can be used cleanly. What don’t people GET about that?
April 8th, 2008 at 7:02 amBill-We have proved that oil can be used cleanly. What don’t people GET about that?
Well Mercedes f.e. is developing better and better cars to drive on conventional gas/diesel. It would be stupid to throw away all the energy and money that we put in the oil industry so far, for the time being we still need oil.
But we need to think about how we use it and from which we buy it…..
April 8th, 2008 at 7:26 amSteve in NYC;
Get a grip! “Billion barrels per day”? Iraq’s entire reserves, including the newly revealed Anwar fields, is 215 B bl. It’s output is nearing 3.0 MILLION barrels a day.
As for reserves, Google “Bakken”. Big Idaho-Dakotas field that may exceed KSA, perhaps 400+ bbl. Economic at $40/bl or more.
Long-term: study both FocusFusion.org and TelsaMotors.com . With the new battery tech, the result in
April 8th, 2008 at 7:36 amJust the sight of this little-liar’s photo is disturbing.
April 8th, 2008 at 7:46 amI’ll be happier when this particular post is off the front page of this blog. ASAP is best.
He must of been slapped around as a kid.
VW is putting out a diesel hybrid that is reported to get 70 mpg, it is due in europe next yr.
Porsche is targeting 70 mph cruising on battery alone in their hybrid due end of decade.
Until things like fuel cells become marketable, we need to use exploit and use our own resources.
April 8th, 2008 at 8:12 amyea, read a f’ed up government graph
http://www.eia.doe.gov/pub/oil_gas/petroleum/analysis_publications/oil_market_basics/dem_image_us_cons_prod.htm
The Y axis labels thousands of barrels then lists the amount in thousands again so I fired it off without cross check.
20,000 barrels a day is accurate.
http://tonto.eia.doe.gov/dnav/pet/pet_cons_wpsup_k_w.htm
I own a big thristy hemi so billions does not sound way off. We know Bill is paying attention, but I am not in NYC, although Charlotte is trying to be little Manhattan.
April 8th, 2008 at 8:34 amJust a guess, but I’ll bet that should be TESLAmotors.com, after Nikola Tesla.
ALSO, I am not the least but interested in conserving energy. I AM interested in using it efficiently driving what I want to drive — my Jeep Laredo.
April 8th, 2008 at 8:36 amSince Teddy and the gang does not want wind farms in their sailing playground, I say build several new oil refineries in Ted “Fat drunk bastard” Kennedy’s backyard
April 8th, 2008 at 9:57 amAbout a previous post….
It’s yeast not bacteria.
Yeast eats sugar and poops alcohol.
“…it takes the equivalent of 1.29 gallons of gasoline to produce enough ethanol to replace one gallon of gasoline at the pump. Instead of making the nation more energy self-sufficient, ethanol production actually increases our need for oil and gas imports.”David Pimentel of Cornell University
Ethanol only has about 62% the bang of gasoline.
This is why it has to be subsidised.
No businessman in his right mind would put his own money forward.
But he certainly will with our (subsidised) money.
Energy spent to create ethanol……
Farmer plowing, planting, cultivating, applying herbicide/insecticide, harvesting, and drying the grain.
Along with that goes the seed farmed the previous year, herbicide/pesticide manufacture.
Then there’s delivering it to the co-op/distributer, and the distributer delivering it to the distillery.
The electricity required to run the augers and conveyors to move the grain from one vessel to the next.
The electricity to grind the grain to make the corn meal to be made into mash.
Then the mash has to be cooked to kill any foreign bacteria, fungus or yeast.
Then they make what is essentially corn wine.
That then has to be pumped to the pot where the alcohol is the be distilled.
Pumps have to be run for water to make the mash, and there is most likely cold water circulated to cool the alcohol gas back into liquid.
It is most likely distilled a minimum of 4 times to get all the impurities out.
Then the ethanol has to be distributed.
“It is error alone which requires the assistance of government, the truth can stand on it’s own.”–Thomas Jefferson
April 8th, 2008 at 2:12 pm