Sunday, November 22nd, 2009
I. You Eat What You Drive
Ten years from now, a car on the road will be propelled with soybeans; its side-panels made of sweet potatoes and painted with corn. Adhesives, motor oils, cleaning products, fabrics, personal grooming products and solvents will all be made of the earth – That is if the global corporations have their way. And by all measures, they will.
Governments and corporations are quick to jump on the green-bandwagon, subsidising development of fuel and plastics from biologically-based products. The optics of committing to the reduction of oil consumption plays well with voters; Farmers, struggling over the past decade to match globalization, are reinvigorated and ready to till the soil and ballot; and economists, once worried of the pressures of far-off wars and manoeuvring politics are placated with a local, stable and safe energy source to lubricate the markets. Everybody wins.
Or do they? Pegging food to fuel exasperates the poor and expedites a shift that has checks and balance racing to catch up. Public policy mandated under the guise of social welfare has an unlikely gang of supporters – including corporate farmers and multinational conglomerates – hoodwinking the green movement by, of all things, complying with their demands.
II. Economic Liabilities – Peak Oil
The driving force behind bio-products is not environmental concern, but of economic autonomy and stability. The most optimistic estimate of Peak Oil – where new reserves cannot match the draw of demand from conventional sources – is thought to occur with in the next 15 years (Greene, et al., 2006). Prior to the start of the recent economic recession in 2008, this fear lead to record high oil prices, beyond even historic values when adjusted for inflation (McMahon, 2009). While markets have subsided in the short-term, Economist Mike Pope estimates by 2015 prices will hit $300, double the previous high (2009) as the recession wanes.
Industrialized and developing nations are heavily reliant on crude oil for energy and plastics for commodities to sustain continued growth and are actively seeking alternatives. Ethanol additives (E85) primarily from corn and wheat and bio-diesel commonly derived from soy (B20, B100) have been mandated for accelerated production around the world, including a 5% requirement in Canada and 10% in the EU (Banks, 2008). Light-weight plastics, such as polyethylene, ideal to keep transportation cost low, can also be manufactured from the glycerol in corn and sugar cane (Miller & Doidge, 2008). Toyota recently announced that 20% of all materials in their automobiles, from engine and structural parts to foam and fabric of the interior, will be made of bio-plastic by 2015 (Otani, 2008).
The concept that food prices are adversely affected by petroleum prices – either through the intensive use of energy in agriculture (by machinery and transportation) or via macroeconomic factors such as inflation and exchange rates – is nothing new, but replacement of oil with bioengineered products creates a double-edged sword (Alexandratos, 2008). This sets income levels of agricultural output closely to the price of oil as it becomes a supplementary commodity. Adding to the milieu, government grants and subsidies that ensure a locally-grown supply of energy encourage crop-switching and decreased food production (Mercer-Blackman, et al., 2007).
Although Alexandratos (Figure B1) downplays the emerging economies influence on food consumption stated by Amartya Sen in his article “The Rich Get Hungrier” (2008) as one of the reasons for recent price increases, it does account for close to 50% (IMF, 2008). Instead he argues that growth in the demand of energy coupled with increased food consumption forms the true culprit (Figure B2). Market speculation catalyzed by fears of shortage from media images of food riots in 2007 also contributed to raising prices as the advent of Electronically Traded Funds simplified market influence of non-commercial investors wanting to hedge their portfolios on the burgeoning turmoil (Watts, 2009).
III. Environmental Impacts – Crunching the Numbers
The world’s total arable land is estimated at 17 million km2 (11%) of which 1.5 million km2 (1%) is currently cultivated (CIA, 2009). Current world consumption of crude oil is 85 million barrels a day (EIA, 2009). At 19.5 gal/barrel yield (TXOGA, 2009) (or 1.6 billion per day) this translates to 58 trillion gallons per year. With current technologies, one square kilometre of soy can produce 25,000 gallons of bio-fuels (Brown, 2006, p.34). This would require 2.3 million km2 (1.5%) of newly cultivate area equivalent to the size of Quebec, to replace fossil fuels outright. Just to achieve a 10% mixed-gasoline and ethanol mandate while continuing to meet the demands for bio-plastics would require a cornfield the size of Scotland – the area of land we lose each year to soil erosion and urban sprawl (Wright, 2004).
These values neglect to include the 5 trillion gallons/year of fuel required to farm these new lands nor the water or nitrates to fuel them. Fresh water, already at a deficit from excess irrigation wells demanding more than natural aquifers can replace, would be further strained (Brown, 2006, p.42). Using the highest efficiency of irrigation at 6 acre-inch/acre (Clark, et al., 2001), the “Cornfield of Scotland” would require 3 trillion gallons of water per year, equivalent to four times the annual consumption of Ontario (Ministry of Natural Resources, 2008). Averaging soil qualities, an additional 1.3 million tonnes of nitrogen would be required (Nafziger & Hoeft, 2000), which runoff from farms have been blamed for poor drinking water quality; causing birth defects, methemoglobinemia (or “blue-baby syndrome”) and cancer (Logan, et al., 2008); and oceanic dead-zones, where thriving algae blooms strip the water of oxygen required by fish and plants (Biello, 2008).
An already stressed environment has resulted in a number of draughts and diseases that have limited crop output (Mercer-Blackman, et al., 2007) and monoculture farming strips the land of soil through erosion, limits diversity of habitat for species and encourages deforestation, the use of pesticides and genetically-modified species of plants. The shear quantity of land required to meet the 10% mark for the entire world would only be obtainable via mass-agricultural farming and only cost effective to large international agribusiness, such as Cargill (Tenenbaum, 2008).
IV. Society’s Downfall – Who Will Win?
Already at premium, land will now fight between sustenance and sufficing the worlds need for oil. Corporations heavily vested in the automotive and manufacturing industries – including Toyota, Dow Chemical, Cargill, DuPont and Shell (Miller & Doidge, 2008) – vie for arable properties with local inhabitants. Land values are pushed out of reach of the common farmer, turning them into low-paid farm-hands (Tenenbaum, 2008) and eliminating their ability to be economically self-sustaining. Farmers must cost to a highly competitive market, stretching each acre of land to maximum production with the use of fertilizers, pesticides and modified crops – requiring an initial capital investment impossible to obtain by individuals with little assets.
Prior to the bio-fuel boom, agricultural output produced enough to nourish each person with a 2,700 caloric-diet (UN-FAO, 1996). Since then, 20-50% of feedstock as been diverted to the production of ethanol to meet quotas set by government green policies. This represents a scant 1½% of petroleum used for transportation, hardly affecting oil prices (Helbling, et al., 2008) but dramatically inflating food prices. This binding of grains to crude results in an echoing effect; feedstock used to create cooking oils become scarce increasing the cost of meal production in Malaysia through 2008 (Tenenbaum, 2008). Food insecurity persists not because of the world’s inability to produce but the local ability to purchase (Alexandratos, 2008) and poverty being its root cause. With over 1 billion now living at the margin of malnutrition and spending 70-80% (Tenenbaum, 2008) of their income and energy on the acquisition of foodstuffs, the relation between food prices and welfare is extremely elastic.
Global security and welfare are also in jeopardy, as food price hit record highs in 2008 (Figure B3) governments shut their borders to limit supply and riots were seen in 33 countries (Tenenbaum, 2008). Restricting trade limits potential economic gain (Figure B4) as worried investors flee seeking stability for their capital elsewhere, furthering poverty and social unrest. Shrinking arable lands from the impacts of bio-fuel farming, including water depletion and soil erosion, will transform millions into environmental refuges. People of differing culture, language or religion and once separated by geographic means will be pitted over remaining tracts of land for sustainability and shelter (Brown, 2006, p 114).
V. Solutions – Abetting Reality
Calls for a moratorium of the production of feedstock for bio-fuels by various countries have already been made (Tenenbaum, 2008) to ensure that diversion of food to product is first well-balanced and future growth unhindered. But, ultimately, Peak Oil is on the minds of all participants.
To remove our dependence on oil is not merely transference of energy from one source to another, but a reduction of our entire exposure. The throwaway society that has driven job creation and economic growth – and has become the envy of emerging economies (Alexandratos, 2008) – is no longer sustainable. Oil notwithstanding, other important resources, such as lead, tin and copper, all have their estimated peaks within this century (Brown, 2006, p. 109). Moreover, it’s about changing attitudes. Bottled water was found to be no cleaner than that from a household tap and yet billions of units are sold across North America, wasting untold energy in its production, refrigeration and transportation (Brown, 2006, p. 242). It is time we forget the notion that production growth is the only measure of wellbeing and start developing new solutions.
Brown (2006, p. 228-232) suggests shifting the cost of excess from the environment on to the consumer in the form of taxation. By excising the true cost of fuel on the end user via road or gasoline taxes, purchasers will self-regulate consumption. Further, he argues that lowering income taxes in compensation will create jobs via spending in other sectors of the economy and encourage the development of green technologies to curb energy-use. Both Brown (2006, p. 233-234) and Helbling (et at., 2008) recognise the economic disparity between countries who trade energy in the form of tariffs and subsidies, creating an uneven playing field for producers that penalize development and ultimately accelerate their own environment destruction.
Alexandratos (2008) stipulates that a balance between bio-fuels and food production can be best met by trading production to areas with the lowest opportunity cost of production, providing an example of Brazilian sugarcane being used as a source of fuel while freeing northern hemisphere’s breadbaskets for the production of food. Alternatively, the UN-FAO (1996) suggest investing in food security by providing capital and resources instead of raw food aid thereby increasing the amount of arable land revitalizing economies and stemming hunger and malnutrition in failing states.
Diamond in his book Collapse (2005) chronicles societies that have committed unintentional ecological suicide – or ecocide – where abandonment of settlements were triggered by destroying resources which their society were dependant and warns of ignoring these lessons from people past. Fundamentally, this decision is left to our world’s actors: the consumers that must ask ‘What are we trying to sustain, our livelihood or our lives?’ and become conscientious shoppers; the producers that must realise ‘Money doesn’t grow on trees, nor does it in the fields’ and economic growth is the end result of social and environmental stability; and the politicians to develop the wherewithal to acknowledge these facts and lead before it too late.
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