In India, 600 million are off grid

ELECTRICITY CRISIS
Major hurdle to country’s ability to join front ranks of the global economy

Somini Sengupta

New York Times

Gurgaon, India – This suburb south of New Delhi is where the fruits of India’s economic advance are on full display: sprawling malls, skyscrapers housing India’s acclaimed software companies, condominiums with names as fanciful as Nirvana Country.

But this fashionable address of this new India is also a portrait of ambition bumping up against reality, namely an electricity crisis that represents one of the major hurdles to India’s ability to hoist itself into the front ranks of the global economy.

Look up at the tops of buildings, and on any given day, you are likely to find three, four or six smokestacks poking out of each, blowing grey-black plumes into the clouds. If the smokestacks are being uses, it means the power is off and the building – whether bright new mall, condominium or office – is probably being powered by diesel-fed generators.

This being India, a country of more than one billion people, the scale is staggering. In just one case, Tata Consultancy Services, a technology company, maintains five giant generators, along with a nearly 20,000-litre tank of diesel fuel underground, as if it were a gasoline station.

The reserve fuel can power the lights, computers and air-conditioners for up to 15 days to keep Tata’s six-storey building humming during these hot, dry summer months, when temperatures routinely soar above 38 degrees and power cuts can average eight hours a day.

The Gurgaon skyline is studded with hundreds of buildings like this. In Gurgaon alone, the state power authority estimates that the gap between demand and supply hovers around 20 per cent, and that is probably a conservative estimate.

For all those who suffer from crippling power cuts in cities like this, there are others who have no connection to electricity at all. According to the Planning Commission of India, 600 million people – roughly half the population – are off the electric grid. For this reason, it is impossible to estimate accurately the total national shortfall.

But no matter how it is calculated, there is no doubt that India’s electricity crisis is becoming all the more acute for the roaring pace of the country’s economic growth and the new material aspirations it has generated.

For Indian business, coping with chronic power shortages is a part of the cost of business.

At Tata, company managers took pains to say that power shortages did not hinder their ability to meet deadlines for their clients.

“The work as such does not suffer,” said Gurinder Virk, an assistant general manager. “We have sufficient stocks of diesel at all times.”

Behind the building, three generators purred as a sweltering evening descended. A 2004 World Bank survey found that 60 percent of companies in India have such facilities.

Still, construction here surges ahead. With few exceptions, there is little effort to reduce power consumption, beyond the use of low-energy light bulbs. Guragaon is dotted with buildings that are effectively curtains of glass, soaking up the searing summer heat.

“It’s good fo New York, not Gurgaon,” was the verdict of Niranjan Khatri, a general manager with ITC, and Indian conglomerate whose office tower here is one of the few to comply with so-called green building codes.

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Ethanol’s Bitter Taste
Congress is choking on corn-based fuel.

BY KIMBERLEY A. STRASSEL

It was a scant two years ago that Georgia’s Saxby Chambliss voted with 73 other giddy senators for an energy bill that required the nation to use 7.5 billion gallons of ethanol. Georgia’s farmers loved corn-based ethanol; Georgia’s agri-businesses loved corn-based ethanol; and all that meant that then-Agriculture Committee Chairman Chambliss loved corn-based ethanol, too.

Earlier this year, Mr. Chambliss introduced a bill calling for even greater ethanol use, though with one striking difference: The bill caps the amount of that fuel that can come from corn. Turns out Georgia’s chicken farmers hate corn-based ethanol; Georgia’s pork producers hate corn-based ethanol; Georgia’s dairy industry hates corn-based ethanol; Georgia’s food producers hate corn-based ethanol; Georgia’s hunters hate corn-based ethanol. And all that means Mr. Chambliss has had to find a new biofuels religion.
 
The shine is off corn ethanol, and oh, what a comedown it has been. It was only in January that President Bush was calling for a yet a bijillion more gallons of the wonder-stuff in his State of the Union address, and Iowa’s Chuck Grassley was practically doing the Macarena in his seat. And why shouldn’t Mr. Grassley and fellow ethanol handmaidens have boogied? They’d forced their first mandate through Congress, corn farmers were rolling in dough, billions in taxpayer dollars were spurring dozens of new ethanol plants — and here was the commander-in-chief calling for yet more yellow dollars. All in the name of national security, too!

Corn ethanol seemed unstoppable, but a remarkable thing happened on the road from Des Moines. Just as the smart people warned, the government’s decision to play energy market God and forcibly divert huge amounts of corn stocks into ethanol has played havoc with key sectors of the economy. Corn prices have nearly doubled, which means livestock owners can’t afford to feed their animals, and food and drink manufacturers are struggling to buy corn and corn syrup. Environmentalists are sour over new stresses on farmland; international aid groups are moaning that the U.S. is cutting back its charitable food giving, and many of these folks are taking out their anger on Congress.
Call it a case study in how a powerful lobby can overplay its hand. While many members are still publicly touting corn ethanol, privately they are quietly backing away from another round of corn-mania. The most extraordinary sign was the Senate Energy Committee’s recent ethanol bill, hailed by Sens. Jeff Bingaman and Pete Domenici as “bipartisan” legislation for more “homegrown fuels.” What the committee didn’t mention in its press release was that it had built the legislation around Mr. Chambliss’s cap on corn ethanol (at 15 billion gallons), and that the rest of the 32 billion-gallon-a-year mandate would have to come from other (still imaginary) sources, say switchgrass. The bill passed 20-3.

It’s taken politicians a while to catch on to these anti-ethanol vibes, but they’ve now got the picture. At an agriculture conference in Indianapolis last fall, Indiana Gov. Mitch Daniels, Agriculture Secretary Mike Johanns and EPA Administrator Stephen Johnson spoke, delivering their usual fare about how ethanol was the greatest thing since sliced corn bread. They expected warm applause; in the past the entire ag community united around helping their brother corn farmers make a buck. But now that ethanol is literally taking food from their beasts’ mouths, much of that community has grown less friendly. According to one attendee, Messrs. Daniels, Johanns and Johnson were later slammed with snippy ethanol questions from angry livestock owners, much to their dazed surprise. Word is that even the presidential candidates — who usually can say no wrong about ethanol while touring the Midwest — are having to be more selective about where they make their remarks.
 
Things are even hotter in Washington, where lobbying groups are firming up their positions against corn ethanol. The hugely influential National Cattlemen’s Beef Association has gone so far as to outline a series of public demands, including an end to any government tax credits (subsidies) for ethanol and an axe to the import tariff on foreign ethanol. Put another way, the cattlemen are so angry that they are demanding free markets and free trade — a first. Maybe ethanol really is a miracle fuel. In any event, expect the ethanol call to get harder for Plains state senators such as Max Baucus, Ben Nelson and Byron Dorgan.

The National Turkey Federation estimates its feed costs have gone up nearly $600 million annually and is surely letting loose on members from turkey states such as Minnesota and Missouri. The National Chicken Council, which represents companies that produce, process and market chickens, has been hitting the southern political caucus, putting pressure on senators from big poultry states such as Georgia, Arkansas and Alabama. Chicken giant Tyson’s, the second largest employer in Arkansas (after Wal-Mart), even felt the need to warn about the effect of rising corn prices on its business in its first quarter earnings statement. Food and drink manufacturers, which rely heavily on corn and corn syrup for their products, are also making the Washington rounds. The Grocery Manufacturers Association this week called for Congress to undertake a study before it imposed a bigger ethanol mandate. Soft-drink companies such as Coca-Cola (of Mr. Chambliss’s Georgia) are also up in arms.

From the other side, green groups are grousing about the environmental consequences of intensive corn farming. International aid organizations are complaining that ethanol is raising the overall cost of food and diverting grain from poor countries. Ducks Unlimited, part of Washington’s “hooks and bullets” conservation lobby, sported a recent article in its magazine complaining that farmers are taking idle land out of conservation programs — land currently home to ducks — and using it for corn farming again.

All this pressure is beginning to hit home. Ethanol isn’t going away anytime soon; you can’t unring a bill. But senators are said to be readying amendments to offer to the new ethanol bill that would use triggers or waivers to further water down the corn element. Turns out there are huge economic consequences to Congress micromanaging energy policy, and all to aid its campaign donors in agribusiness. A lesson the U.S. is now learning the hard way.

(Opinion Journal from the Wall Street Journal editorial page, May 18, 2007)

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UN warns on impacts of biofuels
A UN report warns that a hasty switch to biofuels could have major impacts on livelihoods and the environment.

Produced by a cross-agency body, UN Energy, the report says that biofuels can bring real benefits.

But there can be serious consequences if forests are razed for plantations, if food prices rise and if communities are excluded from ownership, it says.

And it concludes that biofuels are more effective when used for heat and power rather than in transport.

"Current research concludes that using biomass for combined heat and power (CHP), rather than for transport fuels or other uses, is the best option for reducing greenhouse gas emissions in the next decade - and also one of the cheapest," it says.

The European Union and the US have recently set major targets for the expansion of biofuels in road vehicles, for which ethanol and biodiesel are seen as the only currently viable alternative to petroleum fuels.

Forest clearance

The UN report, Sustainable Bioenergy: A Framework for Decision Makers, suggests that biofuels can be a force for good if they are planned well, but can bring adverse consequences if not.

"The development of new bioenergy industries could provide clean energy services to millions of people who currently lack them," it concludes, "while generating income and creating jobs in poorer areas of the world."

But the prices of food, land and agricultural commodities could be driven up, it warns, with major impacts in poorer countries where people spend a much greater share of their incomes on food than in developed nations.

On the environmental side, it notes that demand for biofuels has accelerated the clearing of primary forest for palm plantations, particularly in southeast Asia.

This destruction of ecosystems which remove carbon from the atmosphere can lead to a net increase in emissions.

The report warns too of the impacts on nature: "Use of large-scale mono-cropping could lead to significant biodiversity loss, soil erosion and nutrient leaching."

This has been avoided, the report says, in the Brazilian state of Sao Paulo where sugar cane farmers are obliged to leave a percentage of their land as natural reserves.

Water is also a concern. The expanding world population and the on-going switch towards consumption of meat and dairy produce as incomes rise are already putting pressure on freshwater supplies, which increased growing of biofuel crops could exacerbate.

In conclusion, UN Energy suggests policymakers should take a holistic look before embarking on drives to boost biofuel use.

"Only through a convergence of biodiversity, greenhouse gas emissions and water-use policies can bioenergy find its proper environmental context and agricultural scale," the report concludes.

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WIND FARMS MAY NOT LOWER AIR POLLUTION, STUDY SUGGESTS
By MATTHEW L. WALD

WASHINGTON, May 3 - Building thousands of wind turbines would probably not reduce the pollutants that cause smog and acid rain, but it would slow the growth in emissions of heat-trapping gases, according to a study released Thursday by the National Academy of Sciences.

The study found, however, that officials who will decide whether to build the turbines have few tools to measure the devices' impact on air quality, on animals like birds and bats, and on wilderness preservation.

In fact, making good decisions about wind energy may be difficult, said David J. Policansky, the study director, because negative effects occur locally while benefits are probably regional or national.

The report observed that unlike European countries, "a country as large and geographically diverse as the United States and as wedded to political plurality and private enterprise is unlikely to plan for wind energy at a national scale." But it said developers and local officials got little federal guidance about how to make such decisions.

Even the scale of local damage from wind farms is unclear. Bats and raptors are thought to be the animals most threatened by wind turbines because they reproduce more slowly. But scientists base estimates on fairly primitive methods, like counting animal carcasses nearby and hoping that few have been carried off by animals, said Paul G. Risser, chairman of the academy's study.

"If 100 bats are killed, we don't know whether that's 100 out of 10 million or 100 out of 100 million," Dr. Risser said.

And researchers do not know whether newer windmills, which have huge blades that rotate slowly, are any safer for birds and bats than older models, which spin more like airplane propellers.

Wind machines can displace power from coal and make electricity without sulfur dioxide, which causes acid rain, and without nitrogen oxides, which add to smog. But the study said they would not reduce the total output of those pollutants because there was already a cap on sulfur emissions and one on nitrogen oxides was likely to follow.

Wind power could also reduce coal-plant carbon dioxide, which is thought to cause climate change, but the impact may be small, the report said. By 2025, wind turbines could cut carbon dioxide output by 4.5 percent compared with what it would otherwise have been, but this "would only slow the increase," said Dr. Risser. "It wouldn't result in a decrease in the amount of CO2."

The study relied on an Energy Department projection that in the next 15 years, onshore wind capacity would range from 19 to 72 gigawatts, or 2 percent to 7 percent of the nation's generating capacity. The actual impact would be smaller, however, because wind machines run fewer hours than coal or nuclear plants.

Wind output quadrupled from 2000 to 2006, but wind turbines still produce less than 1 percent of the electricity used in the United States. And the amount of wind energy that can be integrated into the electricity grid is limited, the researchers said. The maximum that could be accommodated, Dr. Policansky said, is probably 20 percent of the nation's electricity use.

(New York Times, May 4th, 2007)

POLLUTION KILLING MILLIONS OF AFRICANS

(AGENCE FRANCE- PRESSE)

GENEVA, SWITZERLAND – Almost five per cent of deaths and disease are caused by household air pollution in 21 mainly African countries, and could be easily prevented by switching fuels, the World Health Organization said yesterday.

The health risks could be eliminated and some 1.5 million lives saved if people in the world’s poorest countries were able to give up solid fuels, the WHO said.

Reliance on solid fuels and indoor air pollution is rated as one of the 10 most important threats to public health, causing pneumonia and crippling respiratory disease.

About 3 billion people depend on wood, dung, crop residues and coal for cooking and heating.

“The prevention potential is enormous,” WHO assistant director Susanne Weber-Mosdorf said.

 (Montreal Gazette, May 1st, 2007)

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Industry caught in carbon 'smokescreen'
By Fiona Harvey and Stephen Fidler in London

Companies and individuals rushing to go green have been spending millions on "carbon credit" projects that yield few if any environmental benefits.

A Financial Times investigation has uncovered widespread failings in the new markets for greenhouse gases, suggesting some organisations are paying for emissions reductions that do not take place.

Others are meanwhile making big profits from carbon trading for very small expenditure and in some cases for clean-ups that they would have made anyway.

The growing political salience of environmental politics has sparked a "green gold rush", which has seen a dramatic expansion in the number of businesses offering both companies and individuals the chance to go "carbon neutral", offsetting their own energy use by buying carbon credits that cancel out their contribution to global warming.

The burgeoning regulated market for carbon credits is expected to more than double in size to about $68.2bn by 2010, with the unregulated voluntary sector rising to $4bn in the same period.

The FT investigation found:

* Widespread instances of people and organisations buying worthless credits that do not yield any reductions in carbon emissions.

* Industrial companies profiting from doing very little - or from gaining carbon credits on the basis of efficiency gains from which they have already benefited substantially.

* Brokers providing services of questionable or no value.

* A shortage of verification, making it difficult for buyers to assess the true value of carbon credits.

* Companies and individuals being charged over the odds for the private purchase of European Union carbon permits that have plummeted in value because they do not result in emissions cuts.

Francis Sullivan, environment adviser at HSBC, the UK's biggest bank that went carbon-neutral in 2005, said he found "serious credibility concerns" in the offsetting market after evaluating it for several months.

"The police, the fraud squad and trading standards need to be looking into this. Otherwise people will lose faith in it," he said.

These concerns led the bank to ignore the market and fund its own carbon reduction projects directly.

Some companies are benefiting by asking "green" consumers to pay them for cleaning up their own pollution. For instance, DuPont, the chemicals company, invites consumers to pay $4 to eliminate a tonne of carbon dioxide from its plant in Kentucky that produces a potent greenhouse gas called HFC-23. But the equipment required to reduce such gases is relatively cheap. DuPont refused to comment and declined to specify its earnings from the project, saying it was at too early a stage to discuss.

The FT has also found examples of companies setting up as carbon offsetters without appearing to have a clear idea of how the markets operate. In response to FT inquiries about its sourcing of carbon credits, one company, carbonvoucher.com, said it had not taken payments for offsets.

Blue Source, a US offsetting company, invites consumers to offset carbon emissions by investing in enhanced oil recovery, which pumps carbon dioxide into depleted oil wells to bring up the remaining oil. However, Blue Source said that because of the high price of oil, this process was often profitable in itself, meaning operators were making extra revenues from selling "carbon credits" for burying the carbon.

There is nothing illegal in these practices. However, some companies that are offsetting their emissions have avoided such projects because customers may find them controversial.

BP said it would not buy credits resulting from improvements in industrial efficiency or from most renewable energy projects in developed countries.

(Financial Times FT.com, April 25th, 2007)

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ALBERTA TURNS TO NATURAL GAS AFTER WIND LESSENS RELIABILITY
Enmax to build 1,200-megawatt power station
by Claudia Cattaneo

Calgary - Alberta power utilty Enmax Corp. said yesterday it is building a huge new power station in Southern Alberta fired with natural gas, partly to help boost the provincial grid's reliability after Alberta's aggressive expansion into wind energy made it vulnerable to power disruption.

"We now have so much wind-power generation that we need to fall back on reliable sources of power," said Peter Hunt, an Enmax spokesman.

"The problem with wind power is that the wind doesn't blow all the time, so the greater percentage of the system depends on wind, the more vulnerable to disruption the system becomes when the wind stops blowing."

The 1,200-megawatt station, which industry sources say would cost about $2-billion, would produce enough power to supply two-thirds of Calgary's needs.

Alberta expanded into wind power generation aggressively since deregulating its electricity industry eight years ago. With more than 4% of its power coming from wind farms in the southern part of the province, it is the national leader in the green-energy source.

But the growth turned out to be too much of a good thing and the provincial grid operator, Alberta Electric System Operator, slapped a ban last April on the construction of any more wind farms until the realibility issues are resolved.

While environmentally friendly, the typical wind farm in Southern Alberta can harvest wind only 35% of the time.

Electricity has to be used instantaneously, cannot be reliabily stored and has to be kept within a narrow band of voltage and frequency.

Warren Prost, vice-president of operations and reliability with the AESO, said the new station should solve some of the grid's variability challenges.

"It's good news for Alberta in terms of getting another source of generation," he said. "Alberta is continuing to grow at a phenomenal rate and another major investment in the generation of supply is a good thing."

While Enmax has not picked a site for the station, Mr. Hunt said it will be located close to wind power generation areas to it can quickly pick up the load when the wind starts to die down.  The first phase is expected to be completed in the next three years.

An advantage of natural gas-fired stations is that they can be turned on quickly, just like cooking gas. Coal-fired stations, on the other hand, need a long time to ramp up.

Enmax, intself a malor producer of power from wind, said it hopes the new power station will firm up the transmission grid so more wind farms can be developed in the future.

Alberta is expected to require additional capacity of up to 3,800 megawatts in the next decade.

(National Post, April 20th, 2007)

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Carbon offsets that couldn't be less green
American Account
Irwin Stelzer

FOOD-PRICE inflation so severe that central banks are forced to raise interest rates to growth-stifling levels; corn prices so high that poor Mexicans can't afford their tortillas; massive deforestation to make way for more corn and palm oil; poor farmers pushed off their land to make room for carbon-offsetting plantings paid for by rich jet-setters; and Al Gore for president.

These are some of the unintended consequences of hastily conceived environmental policies. In America, President George Bush has decided that we can plant our way out of dependence on foreign oil. He envisages a future in which America's fuel will come from planting above ground rather than drilling below it. In Europe, Angela Merkel and Tony Blair have hit upon carbon trading as the solution to global warming, and the man whose mirror assures him that he is the greenest of them all, David Cameron, has a wind turbine on his roof to generate enough electricity to power his hairdryer.

With the possible exception of Gordon Brown, none of these hitch-hikers on the environmental band-wagon worries much about the cost of these policies, or has given the slightest consideration to the only consequences that are certain - the unintended consequences, some of which I have listed above. And Gore, the former vice-president turned Academy-Award-winning movie producer (and waiting in the wings to enter the race for the Democratic nomination for president), says our choices are action today, or desertification and flooding will be upon us very soon.

Speaking of the Academy Awards, the stars, starlets and wannabes participating in this exercise in self-adulation poured into the hall from their limousines and private jets, but assured us that the entire flood-lit affair was carbon neutral. They had purchased what are known as "carbon offsets", a system by which they pay others to curtail carbon emissions, or fund renew-able-energy sources. These deals, which are running at an annual rate of about $100m and rising, according to Business Week, "have become one of the most widely promoted products marketed to cheque-book environmentalists".

Small problem. The offsets were purchased from TerraPass, holder of a portfolio of offset projects, which include a garbage dump in Arkansas managed by Waste Management. TerraPass has purchased thousands of tons of gas reductions resulting from Waste Management's decision to burn off the methane produced by decomposing trash. But the company's managers and state regulators told Business Week that the decision to burn off the methane had "nothing to do with TerraPass's efforts". Or with the offsets purchased by the Hollywood greens.

There are more such stories, but you get the idea: the reductions in greenhouse-gas emissions claimed by those intent on being green without changing their lifestyles are often bogus - they would have happened without the purchase of offsets.

That is the least of the problems created by the new environmental panic. The rainforests of Indonesia and Malaysia are being destroyed to clear acreage for the production of palm oil, used as a biofuel. And in many countries poor farmers are having their land confiscated so that rich consumers can plant trees to lighten their carbon footprints.

Rich American agribusinesses are also cashing in on the huge subsidies made available by the government's decision to subsidise ethanol and biodiesel production from corn, sugar and other crops. Ethanol from corn is a particular favourite of all the presidential candidates vying for votes in corn-growing Iowa, with the honourable exception of John McCain, who knows a boondoggle when he sees one. Crop prices are up, and so are land values.

The result is a problem for central banks. In the past, spikes in food prices have been seen as temporary, usually weather-related, and requiring no reaction from the inflation-controllers. But this rise might be a plateau rather than a spike: chickens and cattle are more expensive to feed, so farmers are keeping fewer of them, driving up the price of eggs, beef and dairy products. This food inflation is felt most keenly in poorer countries, where food accounts for a larger part of the average budget than in the developed world. But even in the richest countries, central bankers are wondering whether to raise interest rates to cool growth sufficiently to offset the effects of rising food prices.

None of this means policymakers should avoid confronting the possibility that the planet is warming, and the further possibility that the cause is human consumption of fossil fuels. We can't be certain, despite Gore's movie and the heated press releases that accompany more balanced scientific reports. But there is enough evidence to warrant sensible steps to cut carbon emissions.

But think before you legislate. The EU introduced an emissions trading scheme that California intends to copy - and watched greenhouse-gas emissions rise by 30m tons, or about 1.5%, because too many permits were issued. Europe's four biggest power producers pocketed ¤8 billion (£5.4 billion) from the sale of their excess permits, and UK generators an estimated £1 billion. That doesn't mean all such trading schemes are flawed, but it does suggest that haste makes more than a little waste.

Cap-and-trade, properly done, and carbon taxes, properly levied, should be explored as ways of getting the costs of pollution reflected in the prices consumers pay. That would provide an incentive to entrepreneurs to come up with efficient alternatives to fossil-fuel consumption, and relieve governments of attempting to pick winners. There are efficient ways to cut emissions, but it will take patient thought rather than headline-grabbing to discover them.

(The Sunday Times, April 15, 2007)

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Biofuel Surge Could Have Severe Downside, Warn Experts
Haider Rizvi

NEW YORK, Apr 3 (OneWorld) - The Bush administration's plans to increase biofuel imports could add to the suffering of millions of impoverished peasants in Brazil and other developing countries, food rights and environmental groups say.
"The benefits of biofuels cannot be achieved at the expense of food shortages and environmental degradation," says Celso Marcatto, an activist associated with the U.S.-based anti-poverty organization, ActionAid, in Brazil.

ActionAid, like many other groups, fears that the growing U.S. demand for ethanol fuel could force agribusiness in Brazil to indulge in unhealthy competition for profits that might end up causing monopolies over farmlands and damage to the environment.

Last month, during his visit to Brazil, U.S. President George W. Bush signed an agreement with his counterpart Luiz Inacio Lula da Silva to cooperate in the development of biofuels like ethanol.

Their talks on the subject continued as Lula made a trip to the United States last weekend.

Bush has described biofuels as a tool to reduce the United States' dependence on foreign oil, but critics warn the shift in energy strategy will divert food crops from the world's hungry and promote single-crop agriculture and the unsustainable consumption of natural resources.

Proponents of sustainable development models say they do not dispute the fact that ethanol is a viable alternative energy source, but its production also promotes single-crop agriculture, which can lead to the loss of biodiversity and create economic disparities. They are concerned as well that the surge in production of ethanol, which, in Brazil, is largely derived from sugarcane, is driving villagers off their native lands and destroying endangered rainforests, which are considered vital for the biological diversity of the planet.

"The U.S. government should be thinking through a careful approach to biofuels based on diverse production of a mix of crops, including native grasses," said ActionAid's Karen Hansen-Kuhn in the United States.

Emphasizing that local ownership and sustainable agriculture must be considered as "crucial" elements of the United States' biofuel policy, Hansen-Kuhn described Bush's approach as a "headlong rush."

Some researchers claim as well that investments in ethanol to fuel automobiles are driving price hikes in food products around the world.

U.S. investment in fuel ethanol, which in this country is largely derived from corn, has soared since late 2005, according to the Earth Policy Institute (EPI), an independent think-tank.

The U.S. Department of Agriculture projected in early 2006 that fuel ethanol distilleries will require 60 million tons of corn from the 2008 harvest. But EPI research conducted a year later -- once the ethanol boom was apparent -- shows that distilleries will need approximately 139 million tons next year.

This unprecedented diversion of the world's leading grain crop to the production of fuel will affect food prices every year, according to EPI. As the world corn price rises, so too do those of rice and wheat as consumers substitute one for the other and the crops compete for land.

The U.S. corn crop accounts for about 40 percent of the global harvest and 70 percent of the world's corn exports. On average, every year, the United States exports 55 million tons of corn, which is fully 25 percent of the world's total grain exports.

"Substantially reducing this grain export flow would send shock waves throughout the world economy," says EPI's Lester Brown in a recent article on the impact of the demand for grain to fuel automobiles.

Describing the automotive demand for fuel as "insatiable," Brown estimates that the same amount of grain needed to fill a 25-gallon tank with ethanol one time can feed one person for a whole year.

"The competition for grain between the world's 800 million motorists who want to maintain their mobility and its 2 billion poorest people who are simply trying to survive is emerging as an epic issue," he says, in reflecting that soaring food prices could lead to urban food riots in many countries.

In order to avoid such an eventuality, EPI points to the need for a moratorium on the licensing of new ethanol distilleries, with a policy goal that supports corn prices and farm incomes.
"The world desperately needs a strategy to deal with the emerging food-fuel battle," says Brown. "We need to make sure that in trying to solve one problem -- our dependence on imported oil -- we do not create a far more serious one."

(OneWorld US, April 4, 2007)