Using Food to Make Fuel
FRED PALS & AYESHA DAYA / Bloomberg News 21apr2008
Using crops to produce fuel is "criminal" as the world suffers a food shortage, Venezuela's oil minister said in Rome where energy ministers from around the globe are meeting to discuss investment plans.
"Look at the effect it has, the craziness," Rafael Ramirez told reporters today in the Italian capital, where he is attending the three-day International Energy Forum. "All countries, and particularly in Latin America, have problems with food stuffs. It is such a bad idea to use foodstuffs for fuel, it is criminal."
The U.S. and Europe have been encouraging the development of fuels made from crops such as corn and soybeans to limit their dependence on oil imports as prices reach a record. Biofuels are also being promoted as a renewal energy source to limit climate change.
Global food stocks are at their lowest since the 1980s, according to the United Nations' Food and Agriculture Organization as food lines form in the Philippines and soaring rice prices cause riots in Haiti and Egypt. Biofuels are partly to blame for rising food prices because they displace crops that might otherwise be used to feed people or animals, oil industry officials said.
"Biofuels illustrates that in politics nothing is that easy," U.K. Energy Minister Malcolm Wicks said in a Bloomberg Television interview at the energy forum in Rome today.
Promoting biofuels was a popular policy choice a few years ago because of their low-carbon impact, Wicks said, while now "people say hang on, look at the sustainability issue." Consumers won't want to use biofuels "if that means some people are going hungry," he said.
The World Bank has said 33 countries may face unrest because of surging food costs and deepening poverty.
"Biofuels is all about how to develop it without unintended consequences, not only in the competition for food but also the competition for sweet water, and there may be more," Jeroen van der Veer, chief executive officer of Royal Dutch Shell Plc, the biggest European oil company, said yesterday in Rome.
The European Commission may scrap plans aiming for 10 percent of motor fuel to be provided by biofuels by 2020 as food costs rise, the U.K.'s Guardian newspaper reported. Joachim von Braun, director-general of the Washington-based International Food Policy Research Institute, today called for a moratorium on the use of biofuels because of their impact on food supplies.
Driving or Eating
"Biofuels is making the world face a lot of difficulty," Qatari Energy Minister Abdullah bin Hamad al-Attiyah said yesterday in Rome. "It's created a food shortage. Sometimes I ask myself `what is more important, driving or eating?' I can't stop eating."
Movement toward a low-carbon economy and high energy prices are being discussed at the biennial energy forum in Rome. Al- Attiyah is among more than 40 company chiefs and 90 energy ministers attending the three-day forum that ends tomorrow. Qatar is a member of the Organization of Petroleum Exporting Countries.
"Biofuels will just make food prices rise, and they won't solve the problem," Shokri Ghanem said. "How much biofuels can you produce? Not enough to stop reliance on fossil fuels."
Oil ministers are instead promoting measures to bury carbon dioxide emitted during the process of extracting oil as a way to promote production for fossil fuels and protect the environment.
"Why do we resort to holistically risky and costly solutions which may lead to water and food shortages, and rain forest destruction, when we can collaborate to make fossil fuels more carbon clean and environmentally friendly?" Kuwait's acting Oil Minister Mohammed al-Aleem said.
World leaders such as German Chancellor Angela Merkel and Brazilian President Luiz Inacio Lula da Silva have said growing affluence and rising demand in the developing world are the main reason for higher food prices.
"I am of those who are extremely concerned about food prices," Norway's Energy Minister Aaslaug Haga said in an interview with Bloomberg Television yesterday. "What we have to do is make sure sufficient aid is provided and we have to be cautious how we develop biofuels."
Poet LLC, based in Sioux Falls, South Dakota, is the world's biggest ethanol producer by capacity, using corn to make ethanol in states from South Dakota to Ohio. Energy companies are using foodstuffs to make biofuels while also researching ways of making fuel from non-food crops, such as jatropha, an oilseed-bearing tree.
BP Plc, Associated British Foods Plc and DuPont Co. formed a venture last year to build a biofuels factory in England that alone would use about one-third of the U.K.'s surplus wheat supply. BP and D1 Oils Plc are planting jatropha in India, southern Africa and Southeast Asia for future use as an energy crop.
Shell, based in The Hague, last week said construction of the world's first commercial production plant to turn non-food biomass into synthetic diesel fuel has been completed. The plant, built in Freiburg, Germany, by partner Choren Industries GmbH, will start producing fuel from wood waste in the next eight to 12 months.