Biofuel: Sustainable savior or impending disaster?

Sitting half-finished on 400 rural acres in the middle of Michigan is the abandoned Liberty Renewable Fuels ethanol plant, launched with great fanfare and anticipation back in 2007. Liberty Fuels was going to provide so many new jobs, and boost the local economy with so much cash, that local governments rushed to hand out tax breaks and local farmers ramped up corn production with visions of huge profits on the horizon.

But the magic bullet of ethanol as savoir to our fossil fuel addiction quickly faded for Liberty Fuels, and the economic downturn put a crunch in the willingness of investors to take the big risk.

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For local governments around Ithaca, Mich., all that remains now is the faded dream and a big tax fight that pits the investors against local governments. Liberty Fuels and its partner, ICM, a Kansas-based ethanol manufacturer, want back almost $1 million they paid in local taxes.
That battle isn’t unique, and is a microcosm of the problems created by the notion that America could solve its fossil fuel problems by burning corn in its cars and trucks.

There is little debate that biofuels, like ethanol made for corn, sugars and other crops, can be successfully blended with oil-based fuels to power internal-combustion engines.

What is less clear is at what cost, and whether the impact on food prices and food availability, especially to those on the lower end of the economic ladders, is worth it.

In a report released just two months ago, the United Nations Food and Agricultural Organization said that 37 percent of U.S. grain production went to ethanol production in 2012. Putting further upward pressure on grain prices were draught conditions that hit much of the nation’s south.

Further, a 2009 report by the International Centre for Trade and Sustainable Development blamed market-driven ethanol expansion for a 21 percent increase in corn prices that year alone.

Few disagree that increased demand for ethanol has driven up the price of many grains, including corn, and that the resulting demand has pushed up prices. Further agreement links price increases for grain with increases in the prices for everything from cereals and breads to pork, beef and other meats, all of which rely heavily on the nation’s corn crop.
But great debate rages over the whether how much blame ethanol production shares in the increasing food prices, and whether or not – even if it’s a major role – whether it’s good or bad for the economy and the nation.
“World agriculture is facing great challenges as growing demand for food and fuel creates scarcity and induces hunger,” the Giannini Foundation of Agricultural Economics University of California concluded in a 2009 report. “Even when considering just U.S. biofuel production, it is clear biofuels have significantly reduced gasoline prices, but at the expense of contributing to food shortages.”

Most experts agree that the best solution is continued research and development in agricultural efficiencies while, at the same time, improving the production of second-generation biofuels, those relying on cellular-level fuels, to reduce the demand on the staple grains required for food production.


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