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Biofuels and U.S. policy - Jan 26

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Bush's Dangerous Energy Proposal

Kevin Bullis, MIT Technology Review
Moving too quickly on alternative fuels could backfire, says one expert on ethanol fuels.
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Technology Review: At least superficially, President Bush's remarks on energy echo some of your own ideas. What parts of his speech did you applaud?

David Victor: The overall strategy, which is to rely on markets and encourage diversity in energy and to encourage efficiency, all of which he said in one way or another, is absolutely right. What was new last night was the goal of doubling the size of the strategic petroleum reserve. That's an extremely important thing to do.

His emphasis on technology is absolutely crucial. What he did say about climate change did emphasize technology. All of that is sound.

I thought the rest of the stuff was drifting off into the zone of unreality. The target that he sets of cutting down gasoline consumption by 20 percent in a decade is, I think, almost certainly unachievable.

TR: One of the technologies the president emphasized is converting wood chips and grasses, known as cellulosic feedstocks, into ethanol. Could that make his goals achievable?

DV: You have to be careful because a very large part of our biofuels policy is not about energy at all. It's really about the heartland and farm politics because the current corn-based biofuels don't really save us that much energy. Cellulosic biomass [which is potentially much more efficient] is still really some distance off in the future. If we try to meet these aggressive targets very quickly, what we're going to end up with is a much, much larger version of the current, already inefficient, corn-based ethanol program.

David Victor [is] director of Stanford University's Program on Energy and Sustainable Development. This week Victor is participating in the World Economic Forum in Davos, Switzerland,
(25 Jan 2007)


Energy Independence?
A Serious Plan Requires Taxes, ANWR and Nukes

Charles Krauthammer, Washington Post
Is there anything more depressing than yet another promise of energy independence in yet another State of the Union address? By my count, 24 of the 34 State of the Union addresses since the oil embargo of 1973 have proposed solutions to our energy problem.

The result? In 1973 we imported 34.8 percent of our oil. Today we import 60.3 percent.

And what does this president propose? Another great technological fix. For Jimmy Carter, it was the magic of synfuels. For George Bush, it's the wonders of ethanol. Our fuel will grow on trees. Well, stalks, with even fancier higher-tech variants to come from cellulose and other (literal) rubbish.

It is very American to believe that chemists are going to discover the cure for geopolitical weakness. It is even more American to imagine that it can be done painlessly. Ethanol for everyone. Farmers get a huge cash crop. Consumers get more supply. And the country ends up more secure.

...Even worse, the happy talk displaces any discussion about here-and-now measures that would have a rapid and revolutionary effect on oil consumption and dependence. No one talks about them because they have unhidden costs. Politicians hate unhidden costs.

There are three serious things we can do now: Tax gas. Drill in the Arctic. Go nuclear.
(26 Jan 2007)
Charles Krauthammer is a longtime WaPo columnist, fairly bellicose in his views on foreign policy. Here though, he is within the realm of reason, especially in his skepticism of ethanol and advocacy of a gas tax. -BA


Chicken Industry Issues Warning on Price Impact of Greater Demand for Ethanol

National Chicken Council, press release
The vast increase in the use of renewable and alternative fuels urged by President Bush could have the unintended effect of pushing up the cost of poultry and other foods of animal origin, according to the National Chicken Council.

This is because the most commonly used feedstock for renewable fuels is corn, which is also the largest component of animal feed, NCC said. The demand for corn from ethanol producers has already led to a doubling of the price of corn, putting great pressure on the cost of producing chickens and other food animals.

"We estimate that ethanol demand has already increased the price of chicken by six cents per pound wholesale," said William P. Roenigk, senior vice president and chief economist for NCC. "If government continues to push corn out of livestock and poultry feed and into the energy supply, the cost of producing food will only increase."

Production of ethanol is currently subsidized by the federal government through a tax credit of 51 cents per gallon of ethanol added by fuel blenders. In his State of the Union message, President Bush called for an increase in the production of renewable and alternative fuels from 7.5 billion gallons to 35 billion gallons by 2017. He also proposed $2 billion in loans for the development of fuel from sources other than corn, such as switchgrass or other "cellulosic" sources.
(24 Jan 2007)


Feed Costs On the Rise: Meat groups want study on biofuels

John Dobberstein, Tulsa World
Livestock groups want U.S. Agriculture Secretary Mike Johanns to order a study of the emerging biofuels economy and how it will affect the country's agricultural sector and consumers.

"Ethanol production will have an economic impact on the U.S. livestock industry; good for some and bad for others," said the Jan. 18 letter from national organizations representing pork, chicken, milk, turkey and cattle producers.
(24 Jan 2007)

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