Jim Lane

There are vast, right wing conspiracies and vast, left wing conspiracies, but what is facing the biofuels industry is a vast, chicken wing conspiracy.

The conspirators are drawn from groups that Daniel Gross, writing in Slate, described as “poverty activists, inflation hawks, efficiency freaks and environmentalists”, and are led by a coalition of processed food, meat and poultry producers.

Meat and poultry producers are defending their business model, and let’s give them credit for that. The processed food companies seem attracted to the idea of using the campaign to put through a price increase and blame it on a convenient scapegoat.

I have no idea what my brethren journalists and activist environmentalists are doing caught up in all this. So right on so much for so long, they seem to have lost the plot. Propping up the Big Food regime, still as well-funded and dangerous as they used to think it was, is strange work for environmentalists.

Working under names like Food Before Fuel, the conspirators include the Grocery Manufacturers Association, National Pork Producers, American Meat Institute, National Council of Restaurant Chains, the Environmental Working Group, American Bakers Association, National Restaurant Association, Citizens Against Government Waste, National Chicken Council, and the National Turkey Federation.

Earlier this year, they banded together to call for a waiver of the Renewable Fuel Standard, expressing a belief articulated by Bob Goodlatte, ranking Republican on the House Agricultural Committee:

“There are many factors that have increased the price of corn, but the only factor that we can immediately control is the amount of the corn supply that must be dedicated to meet the RFS…Our livestock producers and the American consumer have been hit hard in the pocket books…A temporary waiver will offer immediate relief to those affected by the current shortage of the corn supply.”

Goodlatte was joined by 51 members of the House in his call. Separately, 24 members of the US Senate led by John McCain of Arizona called for a waiver. Two Republican governors, Jodi Rell of Connecticut and Rick Perry of Texas joined them.

It would be hard to enumerate the covey of environmental writers and bloggers who wrote something against biofuels or the Renewable Fuel Standard, or corn ethanol, but it would measure in the hundreds. From paid consultants shilling for industry in the guise of syndicated articles, to some of the most esteemed writers in the country, opining in well-regarded journals such as Grist, Scientific American and TIME. The phrase “anti-ethanol” turns up 14,400 web pages in a Google search. There are 42,000 pages with a reference to “food vs fuel”.

“Biofuels Are Bad for Feeding People and Combating Climate Change,” one article in Scientific American was titled back in February. TIME writer Michael Grunwald called it “the clean energy scam” in March.

As many readers know, EPA Administrator Stephen Johnson declined to waive the Standard based on the evidence before him, in a decision handed down in August.

Famously, the corn market collapsed in September, and the ethanol market with it, in the market implosion of early fall. No RFS waiver required. Under market forces, corn futures price declined from a high of $7.85 to a level of $3.65 today. Ethanol fell from the $2.70 range to $1.65 today.

The “immediate relief” that the market provided did not, however, translate into lower food prices.

According to a Wall Street Journal article from October 17th: “Grain and soybean prices have fallen by about 50% since their summer highs. But don’t expect grocery prices to drop anytime soon. Food companies are typically quick to pass along higher commodity costs on the way up, slower to reduce prices on the way down…By September 30, corn and soybean prices had fallen dramatically, respectively. Yet, during this same month, grocery store prices increased nearly 8 percent.”

Here’s the bottom line of what this is all about. From Canadian Business: “Kraft said… Input costs are coming down, though they’ll still be above historic levels, and pricing is expected to remain in place, which will further pad profit margins.”

As Daniel Gross pointed out in Slate in July of 2007:

I find much of the anti-ethanol case to be unpersuasive. In each instance, the haters would have us look at ethanol, and the ill effects its greater use would assuredly produce, largely in isolation. Might the production of corn ethanol cause pollution? Of course. Is it worse than the sort of pollution created by other types of energy production—i.e., coal and oil? Probably not.

Does greater use of corn for ethanol help spur price increases for food? Sure, but so do many other factors, like, say, the transformation of China from a subsistence farming economy into a more modern one. Is ethanol more inefficient, and hence more costly, than gasoline? Yes. But our heavy use of gasoline imposes all sorts of other costs—from pollution to the hundreds of billions of dollars we spend each year in Iraq. Factor those in, and ethanol no longer seems like such an economic loser.

Gross makes a important point. It is important to compare biofuels to the fuel they replace, which is oil. Not just the cost in dollars, but the cost in emissions, security and lives. The tragedy of the Amazonian rainforest deserves attention, but the tragedy of the Nigerian Delta is no less awful.

Here’s how the conspirators work. Put up a website, selectively publish only favorable articles.  Commissioning them where needed. Paying for advertising to fill gaps. Paying consultants to recruit allies in the environmental movement.

It’s a bad model, which some in the biofuels industry are adopting with tit-for-tat sites like Growth Energy, which do not offer a comprehensive and dispassionate view. Biofuels producers and advocates say that tit-for-tat is smart, that you have to throw mud at a mud-slinger. Unconvincing. But  it is true that their livelihood is threatened by impressively-organized, cynical efforts efforts such as these, funded by the Grocery Manufacturers Association. “The truth shall set you free” is a less appealing strategy, it appears, then “Shields up, Mr. Spock.” Regrettable.

But there is more than grain prices at the heart of this. There is the ongoing “hate debate” over emissions.

The Wall Street Journal, whose editorial page writers are among the “efficiency freaks” identified by Gross, recently ran an article by Stephen Power on the subject of indirect land use changes. It detailed efforts by “DuPont, ADM, GM and representatives of the biotechnology industry” to persuade the EPA to “hold off on quantifying the greenhouse-gas impacts of so-called indirect land-use change”. The move was opposed by the Clean Air Task Force, the EWG Action Fund, and Friends of the Earth in a letter to EPA Administrator Johnson and republished in the New York Times by Green Inc blogger Tom Zeller.

The Times opined in an editorial this week that “Environmentalists want an honest accounting, which the public deserves,” and notes that “it is the E.P.A.’s duty under the law to give the most unbiased, accurate accounting it can. The issue here is the fate of the planet, not the fate of a particular industry.” The argument advanced by numerous distinguished scientists that no generally-accepted model exists for measuring indirect land-use changes is attributed by the Times to “the industry”.

The controversy is being structured by the Times and others as a battle between the biofuels industry, its competitors for grain (including consumers and food producers), and environmentalists. That’s as convenient as it is untrue.

The opponents of biofuels are, generally, on an agenda rant and have long since parted company with the facts. The opposition to biofuels is tactical, not strategic: most opponents are upset about some way that the utterly mundane, utterly practical cultivation of energy crops blocks some Nirvana that they seek: usually profits, and other times a better, more just world written in terms of their choosing.

I have written here and elsewhere that critics of Amazonian deforestation should travel to Brazil and experience the culture and economy of that country before wading into geopolitics from the armchair. Poverty advocates should travel to Africa and Asia-Pacific and actually experience the culture and economies of those regions before wading into the complex issue of global food distribution. Eco-tourism, refugee camp visits, or staying at home and reading about it are not substitutes for real field experience. Go get some.

Here are the hard truths:

We do not have a food supply crisis, according to the hard data. We have a monetary distribution crisis participated in by anyone who has ever accepted higher wages for the same work that an African does. That means you and me.

We do not have a grain supply crisis, according to the hard data. We have a grain distribution crisis caused by rising meat consumption, participated in by anyone who has ever partaken of turkey at Thanksgiving dinner. That means nearly every American, myself included.

We do not have a fuel crisis, according to the hard data. We have a crisis of escalating demand in developing nations that have every right to the same lifestyle that Westerners enjoy, except for the embarrassing fact that there simply isn’t enough cheap energy around to provide an affordable Western lifestyle to all.

We do not have a crisis of subsidies and mandates caused by the emergence of ethanol. We live in a state-subsidized and state-directed economy in almost every corner of importance in the business of the Republic we love and serve. Food, aerospace, defense, banking, environment, oil exploration, drugs, pensions and yes, both farming and renewable energy. The argument from meat producers that they are subsidy free is a canard. They benefit from the same supports of the grain industry that biofuel producers do.

As Harper’s Magazine editor Lewis Lapham wrote in his 1990 essay “The Visible Hand” at the time of the S&L bailout:

The national economy depends not only on systematic price-fixing and noncompetitive bidding but also on the guarantee of government intervention. The theory of the free market works at the margins of the economy—among cabdrivers and the owners of pizza parlors, for small businessmen who make the mistake of borrowing $20,000 instead of $20 million—but the central pillars of the American economy rest firmly on the foundation stones of state subsidy…as with the subsidizing of the farms and the defense industry, so also with paying off the bad debt acquired by the savings and loans associations. Except for the taxpayers (who as always, didn’t know what was being promised in their name), nobody took the slightest risk. Always and whenever possible, the participants in the swindle adhered to the fundamental American principles of “no money down” and “something for nothing”.

We do not have a shortage of solutions to the emissions crisis, according to the hard data. We have a crisis of decreasing interest in paying for solutions to hard problems, preferring to direct our dollars to the purchase of SUVs and larger-screen televisions. The average American home is nearly 50 percent larger than homes built in the 1930s. Electricity-munching devices are proliferating, including the device I used to write this essay and the one you are using to read it.

We do not have a crisis of emissions and food supply in the Third World caused by biofuel development in the United States. We have a crisis of emissions and food supply caused by a growing population in Africa and Asia that is doing better, and wanting more. The large tracts of land in Africa and Asia that are being “converted” from “valuable carbon sinks” to cropland were, in fact, cropland before. They were abandoned, in some cases because of local farming and water practices, in other cases because Western food aid caused the local market for grains to collapse, creating the same massive migration to cities and cycle of dependency and political unrest that was the undoing of the Roman Empire.

Those lands are not “carbon sinks”, except in the calculations of cynical Westerners who conceive of the developing world as a toilet to flush away Western excess. Those lands are no more a “carbon sink” than the land under the home you currently occupy; or the land under mine.

“This Land is Your Land, This Land is My Land” went the Woody Guthrie song. Not “Your Land is My Land”.

The critics of biofuels have their points. It is not even close to a perfect industry. It is turbulent, risky, unproven and yet promising. Critics who say that it has had thirty years to prove itself (and that’s enough) forget that our primary US transportation system, the railroads, took nearly sixty years to complete, and were massively subsidized by the US Government. 309 railroads went into receivership or bankruptcy during the period between 1884 and 1894, despite all the help. Yet who denies the importance of rail transport for freight, the very means of distributing cheap grain from the farms to the cities?

The second leg of our transportation system, the interstate highway system, was built entirely with tax dollars, and is 50 years now in construction and still we are spending our public dollars on it. But who disagrees on the vital importance of our highways? Or the military, or airport security? And so on.

The suggestion that a vital national strategic interest — the quest for energy independence, or something closer to it — should be funded entirely by the private sector is the first suggestion of that type since the old Jeffersonian party disintegrated over its opposition to federal funding of canals in the 1830s.

Biofuels are on the verge of a transformation from first- to second-generation. As BlueFire Ethanol CEO Arnold Klann points out, we have finally come to the point where we have more financing issues than technical issues. The era of 100 Mgy cellulosic ethanol plants, such as Coskata proposes in South Florida using sugar cane residues, 20-50 Mgy plants that use municipal waste, and 10-20 Mgy plants that use agricultural waste, is at hand.

The critics of biofuels would be best advised to stand down and let the future happen: a shutdown of biofuels development will affect next-generation fuels far more than the first-generation fuels such as corn ethanol that they are most concerned with. The future will be fine. Corn ethanol will not rule the world, or even Iowa.

Meanwhile, they would be well advised to revise their direct land use models before proceeding to indirect models.

Most data published from direct models assume a large percentage of farm inputs are coming from fossil fuels: diesel for trucks and equipment, plus petroleum-based fertilizers. This is changing with the growth of biofuel-based fertilizers and the approval of B20 and B100 biodiesel for farm equipment. Once that work is complete, let us indeed take up the question of indirect land use changes, and the true impact of biofuels on land use and food supply.

But let us not have the debate chaired by Kellogg’s, Sara Lee, or the National Chicken Council. Good organizations, but hardly disinterested. Their goal is cheap grain to fund their business models in an era where other inputs are rising quickly in price.

Let us also suggest that emissions studies, or indirect land use studies, be comparative in nature. Assessing the indirect land use impact of biofuels, let us compare it something aside from carbon neutrality. Carbon neutrality is a standard that human breathing can’t live up to. Let us compare it, instead, to that which it proposes to replace or its competitors in that replacement.

An end-to-end analysis of biofuels should be compared to an end-to-end analysis of oil. For example, is the war in Iraq an “indirect land use change” attributable to rising oil consumption?

An end-to-end analysis of hybrid cars, and plug-in hybrids, would also be useful. It would be interesting data. What is the social cost of open-mining for nickel and lithium to make batteries? What is the energy cost of the construction of solar PV?

Let’s get all the facts on the table, and thereafter form coalitions to compete for the federal purse.

If we get this right, we can make progress in our environmental goals and energy security. That is a more important priority than making the world safe for cheap chicken wings.