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what’s that got to do with the price of beer?

By enelson
Monday, July 16th, 2007 at 6:21 pm in Environment, fuel, technology.


I may have been too eager to believe the dairy clerk that the steep increase of a price of milk at my local grocery store had something to do with the ethanol industry gobbling up our bovine friends’ feed corn.

That price is fixed according to international demand for dairy products, which (I don’t think this is a wild stab here) doesn’t fluctuate with our demand for energy.

But stories are coming in from around the globe indicating that borrowing from the food chain to fill up our tanks may not be the brightest solution ever conceived to deal with our energy problem.

Granted, mass starvation would likely lead to lower population and fewer people needing to commute or light their stoves with soybean diesel, but that’s a bit Dickensian.

I’m not sure how reliable the Green Car Congress website is, but I noticed through my weekly Consensus alternative fuels mailer a story on GCC:

Speaking at the EC’s International Conference on Biofuels in Brussels, India’s New and Renewable Energy Minister Vilas Muttemvar said that his country’s national biofuels policy will “likely be in place in a few months time from now.”

The program will mandate a 5% renewable component in fuels by 2012, increasing to 10% by 2017, with higher levels to come thereafter. The program will also establish minimum support prices for jatropha and other non-edible oilseeds. Nine states and the Union Territory already have 5% ethanol blending in gasoline.

The policy, said Minister Muttemvar, has to balance food security and energy security.

And here’s the kicker from Muttemvar:

We cannot afford the conversion of cereals and other foods to ethanol, or use edible oils for biodiesel as is being proposed in some countries.

And, from a better-known source, a Spiegel (picked up by Business Week) story about how the competition between food and fuel is manifesting itself:

Mamma mia! The price of a plate of pasta is expected to rise 20 percent this summer as a bad wheat harvest and increasing competition from biofuel manufacturers send the price of delicate, delicious durum wheat skyrocketing.

Just as I did, this story puts out the sexy lead paragraph and headline before the fine print that qualifies the whole thing:

Cooler heads have pointed out that the biofuel boom may not be singlehandedly responsible for this year’s shortage. Mother Nature herself may shoulder some of the responsibility. Unusually hot weather in grain producing countries like the US, Canada, Australia, Syria and Morocco has resulted in unusually low crop yields. Europe, on the other hand, has been drenched by rain, damaging delicate durum wheat crops. The weather’s one-two punch means the 2007 harvest is going to be at least 3 million tons short.

So are biofuels putting a hurting on foodstuffs or what? Thanks to Consensus, I have another story to offer with the same “tea in China”-type hook:

Biofuels may be good for the environment, but they are bad news for German beer drinkers. Prices in the country’s pubs look set to rise by 40 per cent this year, because Germany’s farmers are growing less barley for beer production and more crops for biodiesel and bioethanol.

Even if you aren’t quick to point out that we’re not going to starve for lack of beer or barley, this story, too, has a similar disclaimer:

Poor-quality harvests, caused by unusually hot weather, have not helped either.

Still, beer producers have found their enemy:

As a result, Germany’s brewers, which insist on the purity of their beer and offer organic brands to emphasise their green-tinged credentials, have turned over a new leaf. They are now demanding an end to the use of crops to make fuel.

Perhaps the lesson here is you can drink, or you can drive, but you can’t do both.

Still, there have been some breakthroughs here. The Sierra Nevada Brewing Co. in Chico generates nearly all of its power with leftover beer waste and solar panels. And believe me, they get a lot more from the beer than they do from the sun.

Photo from Associated Press.

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4 Responses to “what’s that got to do with the price of beer?”

  1. david vartanoff Says:

    yes ethanol diversion does effect milk pricing. agricultural production chases price just like any other business. this is BTW part of why ethanol made from petro fertiliser grown crops is so completely wrongheaded. converting the stalks and other waste is fine, but diverting food to fuel single driver commuting is dumb. from my reading while ethanol is cleaner burning, energy inputs to produce a gallon far outstrip that available at the pump merely moving wasted oil from cars to ethanol conversion plants.

  2. Reedman Says:

    There is a possible solution to the problem/question about the cost of ethanol
    production ==> deregulation. Presently, the USA (with limited exceptions)
    doesn’t allow ethanol to be imported. So, even though Brazil is the low cost provider
    in the world, we’re not allowed to buy their fuel. Similiarly, the price of sugar (another
    possible feedstock in the ethanol world) in the USA is kept artificially high in order to keep farmers planting it instead of something else. We might not be using corn to
    make ethanol if the government didn’t intervene in the marketplace. Biofuels are a
    good idea, we just have to let them find their place.

  3. david vartanoff Says:

    right, just let the free market fix ethanol like it fixed electricity. I agree about cutting sugar subsidy, but ethanol wouldn’t even be an issue if we were not REGULATING emissions. and you have I hope noticed the “free market” SUV drivers and their fuel economy efforts.

  4. Bruce De Benedictis Says:

    The long term problem is that one gallon of gasoline contains 31,000,000 small calories, or 31,000 large calories, the latter being what we count when we eat. So replacing each gallon of gasoline’s energy content from foodstocks is the equivalent of feeding over a dozen people a day. I think on the average, Americans use at least 2 gallons of gasoline a day. So replacing gasoline with foodstocks like ethanol will be like feeding a population of about 4 billion people in this country alone.

    As I said before, we are living lives of incredible ease, so that our children will not in the future.

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