Page 2 of
2 The great biofuel
fraud By F William Engdahl
the past seven years. Carryover
reserve stocks of all grains fell at the end of
2006 to 57 days of consumption, the lowest level
since 1972. Little wonder that world grain prices
rose 100% over the past 12 months. This is just
the start.
That decline in grain reserves,
the measure of food security in event of drought
or harvest failure - an increasingly common event
in recent years - is pre-programmed to continue
going as far
ahead
as the eye can see. Assuming a modest world
population increase annually of some 70 million
over the coming decade, especially in the South
Asian subcontinent and Africa, the stagnation or
even decline in the tonnages of feed corn or other
feed grains, including rice, that is harvested
annually as growing amounts of bio-ethanol and
other biofuels displaces food grain in fact means
we are just getting started on the greatest
transformation of global agriculture since the
introduction of the agribusiness revolution with
fertilizers and mechanized farming after World War
II.
The difference is that this revolution
is at the expense of food production. That
pre-programs exploding global grain prices,
increased poverty, and malnutrition. And the
effect on gasoline import demand will be minimal.
Professor M A Altieri of the University of
California at Berkeley estimates that dedicating
all US corn and soybean production to biofuels
would only meet 12% of gasoline and 6% of diesel
needs. He notes that although one-fifth of last
year's US corn harvest went to bio-ethanol, it met
a mere 3% of energy needs. But the farmland is
converting at a record pace. In 2006 more than 50%
of Iowa and South Dakota corn went to ethanol
refineries.
Farmers across the US Midwest,
desperate for more income after years of depressed
corn prices, are abandoning traditional crop
rotation to grow exclusively soybeans or corn,
with dramatic added impact on soil erosion and
needs for added chemical pesticides. In the US
some 41% of all herbicides used are already
applied to corn. Monsanto and other makers of
glyphosate herbicides such as Roundup are clearly
smiling on the way to the bank.
Going
global with biofuels The Bush-Lula pact is
just the start of a growing global rush to plant
crops for biofuel. Huge sugarcane, oil-palm and
soy plantations for biofuel refining are taking
over forests and grasslands in Brazil, Argentina,
Colombia, Ecuador and Paraguay. Soy cultivation
has already caused the deforestation of 21 million
hectares in Brazil and 14 million hectares in
Argentina, with no end in sight, as world grain
prices continue to rise. Soya is used for
bio-diesel fuel.
China, desperate for
energy sources, is a major player in biofuel
cultivation, reducing food-crop acreage there as
well. In the EU, most bio-diesel fuel is produced
using rapeseed plants, a popular animal feed. The
result? Meat prices around the globe are rising
and set to continue rising as far as the eye can
see. The EU has a target requiring minimum biofuel
content of 10%, a foolish demand that will set
aside 18% of EU farmland to cultivate crops to be
burned as biofuel.
Big Oil is also driving
the biofuels bandwagon. Professor David Pimentel
of Cornell University and other scientists claim
that net energy output from bio-ethanol fuel is
less than the fossil-fuel energy used to produce
the ethanol. Measuring all energy inputs to
produce ethanol, from production of nitrogen
fertilizer to energy needed to clean the
considerable waste from biofuel refineries,
Pimintel's research showed a net energy loss of
22% for biofuel - they use more energy than they
produce. That translates into little threat to oil
demand and huge profit for clever oil giants that
re-profile themselves as "green energy" producers.
So it's little wonder that ExxonMobil,
Chevron and BP are all into biofuels. This past
May, BP announced the largest ever
research-and-development grant to a university,
$500 million to the University of
California-Berkeley, to fund BP-dictated R&D
into alternative energy, including biofuels.
Stanford University's Global Climate and Energy
Program got $100 million from ExxonMobil;
University of California-Davis got $25 million
from Chevron for its Bio-energy Research Group.
Princeton University's Carbon Mitigation
Initiative takes $15 million from BP.
Lord
Browne, the disgraced former chief executive
officer of BP, declared last year, "The world
needs new technologies to maintain adequate
supplies of energy for the future. We believe
bioscience can bring immense benefits to the
energy sector." The biofuel market is booming like
few others today. This all is a paradise for
global agribusiness industrial companies.
All this, combined with severe weather
problems in China, Australia, Ukraine and large
parts of the EU growing areas this harvest season,
guarantees that grain prices are set to explode
further in coming months and years. Some are
gleefully reporting the end of the era of "cheap
food". With disappearing food-security reserves
and disappearing acreage going to plant corn and
grains for food, the biofuel transformation will
impact global food prices massively in coming
years.
Another agenda behind
ethanol? The dramatic embrace of biofuels
by the Bush administration since 2005 has clearly
been the global driver for soaring grain and food
prices in the past 18 months. The evidence
suggests this is no accident of sloppy legislative
preparation. The US government has been
researching and developing biofuels since the
1970s.
The bio-ethanol architects did
their homework, we can be assured. It's
increasingly clear that the same people who
brought us oil-price inflation are now
deliberately creating parallel food-price
inflation. We have had a rise in average oil
prices of some 300% since the end of 2000 when
George W Bush and Dick "Halliburton" Cheney made
oil the central preoccupation of US foreign
policy.
Last year, as bio-ethanol
production first became a major market factor,
corn prices rose by some 130% on the Chicago
Mercantile Exchange in 14 months. It was more than
known when Congress and the Bush administration
made their heavy push for bio-ethanol in 2005 that
world grain reserves had been declining at
alarming levels for several years at a time when
global demand, driven especially by growing wealth
and increasing meat consumption in China, was
rising.
As a result of the diversion of
record acreages of US and Brazilian corn and
soybeans to biofuel production, food reserves are
literally disappearing. Global food security,
according to Food and Agriculture Organization
data, is at its lowest since 1972. Curiously, that
was just the time that Henry Kissinger and the
Nixon administration engineered, in cahoots with
Cargill and ADM - the major backers of the ethanol
scam today - what was called the Great Grain
Robbery, sale of huge volumes of US grain to the
Soviet Union in exchange for sales of record
volumes of Russian oil to the West. Both oil and
corn prices rose by 1975 some 300-400% as a
result. Just how that worked, I treated in detail
in A Century of War: Anglo-American Oil
Politics.
Today a new element has
replaced Soviet grain demand and harvest
shortfalls. Biofuel demand, fed by US government
subsidies, is literally linking food prices to oil
prices. The scale of the subsidized biofuel
consumption has exploded so dramatically since the
beginning of 2006, when the US Energy Policy Act
of 2005 first began to impact crop-planting
decisions, that there is emerging a de facto
competition between people and cars for the same
grains.
Environmental analyst Lester Brown recently noted,
"We're looking at competition in the global market
between 800 million automobiles and the world's 2
billion poorest people for the same commodity, the
same grains. We are now in a new economic era
where oil and food are interchangeable commodities
because we can convert grain, sugarcane, soybeans
- anything - into fuel for cars. In effect the
price of oil is beginning to set the price of
food."
In the mid-1970s, secretary of
state Henry Kissinger, a protege of the
Rockefeller family and of its institutions,
stated, "Control the oil and you control entire
nations; control the food and you control the
people." The same cast of characters who brought
the world the Iraq war, and who cry about the
"problem of world overpopulation", are now backing
conversion of global grain production to burn as
fuel at a time of declining global grain reserves.
That alone should give pause for thought. As the
popular saying goes, "Just because you're paranoid
doesn't mean they aren't out to get you."
F William Engdahl is author of
the book Seeds of Destruction: The Hidden
Agenda of Genetic Manipulation, about to be
released by Global Research Publishing, and of
A Century of War: Anglo-American Oil Politics and
the New World Order, Pluto Press. He may be
reached via his website,
www.engdahl.oilgeopolitics.net.
Head
Office: Unit B, 16/F, Li Dong Building, No. 9 Li Yuen Street East,
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