Corn on the Mob

Thursday's Editorial   —   Posted on January 31, 2008

(by Patrick J. Michaels, Spectator.org) – Indonesia is a land in turmoil, home to massive volcanoes, tsunamis, and earthquakes. On Monday, January 14, it experienced a brand new type of disturbance, the world’s first food riot caused by another nation pandering to the global warming mob. Indonesians took to the streets, demanding that their government to do something about the price of soybeans, a dietary staple.

All over the world, food prices are on the rise. For most of the late 1990s and up until 2005, the price of beans on the Chicago Board of Trade had remained stable at about $5 a bushel. Since then, they have shot up over 150 percent, to around $13. Corn has doubled, to $5. Wheat prices have tripled.

It all started with the 2005 Energy Policy Act, passed by a Republican congress and signed by a Republican president, mandating that an increasing amount of ethanol be admixed with gasoline. The bill was sold as a road to “energy independence” and as lowering the amount of carbon dioxide we emit, reducing dreaded global warming.

By now, 15 percent of our corn crop is being distilled, diverted from the proper purpose for such distillates (i.e. drinking), combusted, and sent out your car’s tailpipe.

The Act required production of four billion gallons of ethanol in 2006, increasing by approximately 700 million gallons each succeeding year. Enter those familiar characters supply, demand, and price. Supply tightens, prices escalate, and more and more farmers divert cropland from other crops (mainly soybeans and wheat) to corn. In the U.S., most crops are turned into animal feed, but in poorer countries, such as Indonesia (soybeans) or Mexico (corn for tortillas) they are consumed directly.

The ethanol malaise has also hit here at home, as a trip to the grocery store will reveal that the price of just about everything containing corn, wheat, or soybean products, or parts of animals fed on those crops, is skyrocketing. It’s hard to find a decent steak for under $12 a pound these days.

IT’S ONLY GOING to get worse. As if to add more 200-proof to the fire, President Bush, citing global warming in his 2007 State of the Union speech, called for production of 35 billion gallons of ethanol by 2017, displacing 20 percent of our current gasoline consumption with this intoxicating elixir. This is five times the amount mandated in the 2005 Energy Act. He claimed that this would help us get off Middle Eastern oil.

I’ll leave the hocus about energy independence to my fellow energy wonks, because the pocus about global warming is an even easier kill.

Let’s stipulate that, indeed, 20 percent of our current gasoline consumption is somehow replaced. Transportation accounts for roughly one-third of our national emissions of carbon dioxide, so this would reduce our total emissions by 6.7 percent. That’s today’s emissions. Based upon recent data, the number of cars on the road will rise by this percent in about four years.

What does that do about global warming? It prevents .02º F worth of warming in the next century, based upon a formula published by the National Atmospheric Research Center in 1998. You experience this ambient temperature change every second of your life.

Now, suppose this policy were extended to all the nations of the world in which there are appreciable numbers of cars (called “Annex 1” countries by the United Nations), and the amount of warming that doesn’t occur is .05º F. No one will ever be able to detect these temperature changes in global records, which vary naturally by about .15º from year to year

Displacing 20 percent of gasoline consumption is probably impossible. The U.S. produces more than half the world’s corn, and if we turned every kernel of it into ethanol, we’d still be 40 percent short of the President’s target.

To get there, we would have to find an economic way to make ethanol from cruder plant materials — so-called “cellulosic” ethanol. No matter how much money governments throw at this (including a lot from the 2005 energy bill), no one has figured out how to do this economically, and people have been at it for decades.

OF COURSE, we won’t completely burn up our corn. We’ll incrementally ratchet it up until the inflation in food prices becomes politically untenable. Don’t be surprised, one day, if there’s a March for Food down Constitution Mall.

In other countries, there will be more riots, perhaps a coup or two, some pretty hungry people, maybe some genocide. And everywhere not a dram of a change in climate owing to ethanol will ever be measured.

The sad fact is that Indonesia’s unrest is only the slightest foreshock preceding the massive civil earthquake that is going to be unleashed as more and more absurd policies are mandated by the global warming mob.

Patrick J. Michaels is senior fellow in environmental studies at the Cato Institute and a member of the United Nations’ Intergovernmental Panel on Climate Change.

First published at Spectator.org on Jan. 30, 2008.  Reprinted here Jan. 31st with permission from The American Spectator. Visit the website at Spectator.org.

Questions

1.  List the reasons Mr. Michaels gives for opposing the 2005 Energy Policy Act. (see paragraphs 2, 6, 12-13, 15)

2.  Why have the prices of soybeans, corn and wheat dramatically increased since 2005?  (see para. 3-6)

3.  What percent of the U.S. corn crop is now being used for ethanol?

4.  Mr. Michaels is not arguing in this commentary against the belief in man-made global warming, but rather the proposed solution, which has now unintentionally caused harm to Americans – and the poor of the world.  Whether you believe that man-made catastrophic global warming is imminent or not, what do you think about the government’s attempt to solve the perceived global warming problem?  Be specific.

5.  If the U.S.’s 2005 Energy Policy Act was successful in reducing global warming, would the harm it causes to the world’s poor be worth its success?

OPTIONAL:  Email your reaction to Mr. Michaels’ commentary to pmichaels@cato.org.  Remember to name the article you are commenting on, and that you read it at StudentNewsDaily.com.  Be clear, concise and polite.


Background

NOTE:  In a new Free Trade Bulletin, the Cato Institute’s Sallie James examines the forces behind recent surges in food prices and how the government can provide some relief to consumers. Drawing on the latest available figures, James shows that food prices are indeed rising faster than prices of other goods, and much faster than in the past. The U.S. government’s own actions are contributing to the hike in food prices.

Citing major international studies, James concludes that while international factors-drought in major agricultural exporting countries, changing global food consumption patterns, and higher fuel prices- go some way to explaining increased grocery bills, U.S. government action is adding to consumers’ woes. By encouraging the growth of corn-fueled ethanol, the federal government is adding to corn demand and therefore to higher prices for the grain. Other commodity prices rise, too, as land is diverted to growing corn. That in turn increases the cost of livestock products, as feed prices rise.  (Read the entire bulletin here.)

Resources

Read an article about how the poor in Haiti may have been hurt due in part to the U.S.’s 2005 Energy Policy here.

Read a brief biography of Mr. Patrick Michaels the CATO Institute here.