The Rational Optimist_ How Prosperity Evolves - Matt Ridley [113]
The mad world of biofuels
This is what makes the ethanol and biofuel boondoggle so enraging. Not even Jonathan Swift would dare to write a satire in which politicians argued that – in a world where species are vanishing and more than a billion people are barely able to afford to eat – it would somehow be good for the planet to clear rainforests to grow palm oil, or give up food-crop land to grow biofuels, solely so that people could burn fuel derived from carbohydrate rather than hydrocarbons in their cars, thus driving up the price of food for the poor. Ludicrous is too weak a word for this heinous crime. But I will calm myself just long enough to go through the numbers in case nobody has heard them.
In 2005, the world made roughly ten billion tonnes of ethanol, 45 per cent of it from Brazilian sugar cane and 45 per cent from American maize. Add in a billion tonnes of biodiesel made from European rape seed and the result is that roughly 5 per cent of the world’s crop land has been taken out of growing food and put into growing fuel (20 per cent in the United States). Together with drought in Australia and more meat eating in China, this was the key factor that helped push world food supply below world food demand in 2008 and cause food riots all over the world. Between 2004 and 2007 the world maize harvest increased by fifty-one million tonnes, but fifty million tonnes went into ethanol, leaving nothing to meet the increase of demand for all other uses of thirty-three million tonnes: hence the price rose. The poor, remember, spend 70 per cent of their incomes on food. In effect, American car drivers were taking carbohydrates out of the mouths of the poor to fill their tanks.
Which might just be acceptable if either biofuel had a big environmental benefit, or it saved Americans money so they could afford to buy more goods and services from the poor and help them out of poverty that way. But since Americans are in effect being taxed thrice over to pay for the ethanol industry – they subsidise the growing of maize, they subsidise the manufacture of ethanol and they pay more for their food – the ability of American consumers to contribute to demand for manufactured goods is actually hurt by ethanol, not helped. Meanwhile, the environmental benefits of biofuels are not just illusory; they are negative. Fermenting carbohydrate is an inefficient business compared with burning hydrocarbon. Every acre of maize or sugar cane requires tractor fuel, fertilisers, pesticides, truck fuel and distillation fuel – all of which are fuel. So the question is: how much fuel does it take to grow fuel? Answer: about the same amount. The US Department of Agriculture estimated in 2002 that each unit of energy put into growing maize ethanol produces 1.34 units of output, but only by counting the energy of dried distillers’ grain, a by-product of the production process that can go into cattle feed. Without that, the gain was just 9 per cent. Other studies, though, came to less positive conclusions, including one estimate that there was a 29 per cent loss of energy in the process. Drilling for and refining oil, by contrast, gets you a 600 per cent energy return or more on your energy used. Which sounds the better investment?
Even if you grant a net energy gain from ethanol – and Brazilian sugar cane is rather better, but only thanks to the fact it employs armies of underpaid human labour – that does not translate into environmental benefits. Using oil to drive cars releases carbon dioxide, which is a greenhouse gas. Using tractors to grow crops also releases nitrous oxide from soil, which is a stronger greenhouse gas with nearly 300 times the warming potential of carbon dioxide. And every increment in the price of grain that the biofuel industry causes means more pressure on rainforests, the destruction of which is the single most cost-effective way of adding carbon dioxide to the atmosphere. Converting the cerrado soils of Brazil to soybean diesel, or the peat lands