In Case You Missed it

FROM-Western Farm Press

Collision coming between biofuels mandates and market reality

In the face of a small corn crop and high prices, there has been a great deal of debate about a partial temporary waiver of the Renewable Fuels Standards (RFS) mandate for ethanol in 2013. Our analysis of the likely impacts of such a waiver can be found here. While the headlines have focused on the short-term implications of waiving the ethanol mandate in 2013, a potentially much larger issue looms on the horizon. Beyond 2013, there are real questions about the feasibility of meeting the ever-increasing requirements of the RFS, and this concern goes beyond the well-known difficulties with meeting the mandate for cellulosic biofuels. The purpose of this post is to show why the RFS is likely to collide with market realities in the near future....

read here

Relax biofuel laws says World Bank as millions face food poverty

FROM-Green Car Web Site

The World Bank is calling on Governments around the world to relax laws requiring biofuels to be mixed with conventional fuels for road transport use as global food prices remain volatile.

According to the organisation, rising food and fuel prices is causing unrest in some of the world’s poorest countries as more people face being pushed below the $1.25 daily income extreme poverty line.

Driven in part by higher fuel costs connected to events in the Middle East and North Africa, global food prices are 36 per cent above their levels a year ago new World Bank Group numbers released this week reveal.

The bank is calling on governments to divert more crop production away from biofuel use and ease export controls to prevent even more people falling below the extreme poverty line.

“More poor people are suffering and more people could become poor because of high and volatile food prices,” said World Bank Group President Robert B. Zoellick. “We have to put food first and protect the poor and vulnerable, who spend most of their money on food.”

The World Bank says that a further 10 per cent increase in global food prices would push a further 10 million people below this line. This is in addition to the 44 million people who have been driven into poverty since last June as a result of price spikes. The World Bank estimates there are now about 1.2 billion people living below the poverty line.

The World Bank’s food price index, which measures global prices remains close to its 2008 peak. While not suggesting that biofuel laws should be abolished altogether, the organisation is concerned that many of the greatest food price increases link to plants commonly used as biofuel sources. Crops such as maize show a 74 per cent increase in price, while other biofuel crops such as wheat show a 69 per cent increase and soybeans show a 36 per cent increase, although rice prices have been stable.

Food prices have soared due to severe weather events in key grain exporting countries, export restrictions and low global stocks as well as biofuel production. The food price hike is also linked to surging fuel prices – crude oil increased 21 per cent in the first quarter of 2011as a result of unrest in the Middle East and North Africa.

In Europe, the European Renewable Energy Directive states that 10 per cent of transport fuel must come from renewable sources by 2020. In the UK a similar measure requires 5 per cent of transport fuel to come from renewable sources by 2013-much of this is currently met through the use of biofuels.

Turns out invasive noxious weed won't save the world

FROM-IRIN

CLIMATE CHANGE: Jatropha - not really green

JOHANNESBURG, 23 March 2011 (IRIN) - A new study has put the brakes on a rush by some countries and companies to establish plantations of jatropha, an oil-bearing shrub and cousin of the castor bean bush, as a source of biofuel.

The study by ActionAid, an anti-poverty NGO, the Royal Society for the Protection of Birds, and Nature Kenya, a conservation society, looked at whether biofuel made from jatropha grown in the Dakatcha woodlands in Kenya’s coastal district of Malindi, could indeed be a green fuel.

Chris Coxon of ActionAid said the oil yield of the seed from plants grown on land earmarked for jatropha cultivation in Malindi would determine whether the shrub provided a viable alternative to fossil fuel.

Previous land use was another critical factor. The study found that throughout the production and consumption process in the Dakatcha woodlands, the jatropha would emit between 2.5 and six times more greenhouse gases than fossil fuels, largely because of clearing the forest, which stores massive amounts of carbon in its vegetation and soil, to make room for the plant.

Other studies have also found that the yield from jatropha can vary considerably, because contrary to the popular perception that it can thrive in semi-arid conditions, the plants need water and nutrients to produce high yields.

So, if an investment in irrigation and fertilizer is required, why not grow food crops instead, the study argued. Much of the biofuel from the Dakatcha woodlands project, when it starts producing, is destined for Europe to meet regional targets for switching to renewable energy.

The study underlined what a joint UN Food and Agriculture Organization (FAO) and International Fund for Agricultural Development (IFAD) report on jatropha had found in 2010 - that the shrub was useful as a bio-energy crop for cultivation by small-scale farmers.

"Some communities in the dry sahel of Africa have told us they are not against jatropha, only large plantations established by foreign companies for export without their consent," said Tim Rice, ActionAid's biofuels expert.

"They proposed growing small plots of jatropha on their own agriculural land or as a 'hedge' to divide fields. Used locally, it could be used as fuel for stoves, irrigation pumps and generators."

But even then, growing jatropha could prove uneconomical if there was no investment in developing higher oil-yielding, non-toxic varieties.

The Kenyan government has suspended clearing the full 50,000 hectares of forest, which would have displaced 20,000 people for the proposed plantation in Dakatcha, pending an environmental impact assessment, the study said.

What concerns us is the growing move towards massive plantations of jatropha in developing countries,” said Coxon.

Here is a closer look at jatropha and why it has caught the imagination of so many.

How many?

In 2008, jatropha was planted on an estimated 900,000 hectares globally; 760,000 hectares (85 percent of the total) were located in Asia, followed by Africa with 120,000 hectares and Latin America with 20,000 hectares. By 2015, jatropha would be planted on a projected 12.8 million hectares, according to an FAO report.

By comparison, maize, one of the world’s major staple grain crops, is planted on more than 160 million hectares.

In another four years, Indonesia will be the largest jatropha producing country in Asia. In Africa, Ghana and Madagascar will be the biggest producers, while Brazil will be the main producer in Latin America.

Why jatropha?

Jatropha has a long history of being recognized as a substitute for fossil fuel. During the Second World War it was used as a replacement for diesel in Madagascar, Benin and Cape Verde, while its glycerine by-product was used to make nitro-glycerine, used in explosives and medicines for treating heart conditions.

FAO said jatropha had gained some ground as a source of oil for producing biodiesel because of the common perception that it could be grown in semi-arid regions with low nutrient requirements and little care.

Jatropha's extensive roots allow it to reach water deeper in the soil and extract leached mineral nutrients unavailable to many other plants. The surface roots also help bind the soil and can reduce erosion. Compared to other biofuel crops such as sugarcane, it requires less water.

It is a non-edible crop, “So the biodiesel sector does not compete with food and feed use of this crop,” said Simla Tokgoz, a researcher at the International Food Policy Research Institute (IFPRI), a US-based think-tank. Other feedstocks used in biodiesel production are rapeseed, soybean, coconut, and palm.

Jatropha is still in the early stages of development as a biofuel but is expected to be a less expensive source for biodiesel production, which could increase profitability, Tokgoz said.

Jatropha oil can be used directly in some diesel engines without being converted into biodiesel, but because it has a higher viscosity than mineral diesel, it works better in tropical environments, where temperatures are higher.

Is it a viable alternative?

Large-scale biodiesel production will need more water, and in water-stressed conditions this could lead to conflict. The FAO/IFAD report said jatropha biodiesel conformed to the required European and USA quality standards, but cautioned that "It is not a technology suited to resource-poor communities in developing countries."

Biodiesel production also requires expertise, equipment, and the ability to handle large quantities of dangerous chemicals such as toxic methanol and highly corrosive sodium hydroxide.

When comparisons are made of the return on labour input Jatropha performs poorly against other biofuel feedstocks, but much depends on the level of yields, which need to be improved, the FAO/IFAD report said.

Jatropha has a marketable non-edible by-product, but it is less valuable than canola, for example, which can be consumed by animals, said Tokgoz.

Instead of competing for agricultural land, or removing forests or displacing communities, Tokgoz suggested planting government wasteland or contract farming using small- and medium-scale farmers. But again, this would mean investment in irrigation, inputs and efforts to improve yields.

Jatropha is regarded by many as an invasive plant and has been declared a noxious weed in parts of Australia, FAO pointed out. South Africa has banned its commercial production.

‘Absolute madness’ of biofuels

FROM-Washington Times

By Robert Bryce

Last month, Peter Brabeck, the chairman of the Swiss food giant Nestle, declared that using food crops to make biofuels was "absolute madness."

The epicenter of that madness is the U.S. corn-ethanol sector. This year, it will consume 40 percent of all U.S. corn - that's about 15 percent of global corn production or 5 percent of all global grain - in order to produce a volume of motor fuel with the energy equivalent of about 0.6 percent of global oil needs.

Congress lavishes about $7 billion in annual subsidies, mandates and tariff protections upon an industry that is helping push global food prices to all-time highs and shrink grain reserves at the very same time that global grain production is faltering and protests over food prices are becoming common.

The quantity of grain to be consumed this year for ethanol production - 4.9 billion bushels - boggles the mind. That's more than twice as much as all the corn produced in Brazil and more than six times as much as is grown in India. Put another way, that's more corn than the output of the European Union, Mexico, Argentina and India combined.

Despite these facts, President Obama said last month in his State of the Union speech, "We can break our dependence on oil with biofuels." Meanwhile, Newt Gingrich, former speaker of the House, who is considering a run for the 2012 Republican presidential nomination, was in Iowa recently, cravenly wooing the ethanol producers and slamming "big city" critics of the ethanol industry. Alas, there's little reason to expect much bravery out of Mr. Gingrich's fellow Republicans on Capitol Hill. Current Speaker John A. Boehner, Ohio Republican, recently told reporters not to expect cuts to the ethanol subsidies because they are "not in the discretionary spending pot."

While Mr. Obama prevaricates and Congress dithers, ethanol boosters are once again claiming that their sector has negligible effect on grain prices. However, the events of the past few weeks - corn futures at near-record highs and social unrest related to food prices - are nearly identical to the mayhem that occurred in 2007 and 2008. Back then, more than a dozen studies, including ones by Purdue University, the World Bank and the Congressional Research Service, exposed the link between increasing ethanol production and higher food prices. Soaring food prices led to violent protests in Egypt, Cameroon, Ivory Coast, Haiti, Mauritania, Ethiopia, Madagascar, the Philippines and Indonesia. Worries about adequate food stocks led several countries to ban food exports.

In May 2008, the Rand Corp. warned that diverting corn to the ethanol sector was not only bad economics, but a security threat: "Using corn for ethanol is economically inefficient and has harmed U.S. national security. Diverting corn from food to ethanol production has pushed up world market prices for grains and other foods, which, in 2008, resulted in riots in a number of developing countries."

In recent weeks, we've seen food price increases and protests that are reminiscent of 2008. There have been food riots in Algeria and Mozambique. Last month, about 8,000 Jordanians protested in the streets of Amman and other cities over rising food prices. In Egypt, the world's biggest wheat importer, wheat prices are up by 30 percent over the past 12 months. Those higher wheat prices are being stoked by rising corn prices, which have doubled over the past six months and are at about $7 per bushel. "Higher corn prices always means higher wheat prices," says Bill Lapp, president of Advanced Economic Solutions, an Omaha-based commodity consulting firm.

In December, a study by two U.S. agriculture economists, Thomas Elam and Steve Meyer, found that corn prices are being directly stoked by demand from the ethanol sector. Mr. Elam and Mr. Meyer, who have done consulting work for the meat industry, found that without the ethanol mandates, the average price of corn would be lower by more than $2 per bushel. They also conclude that "biofuels policy has caused significant cost increases for all users of feedgrains."

David Orden, a senior research fellow at the International Food Policy Research Institute in Washington, told me that surging corn prices are "a continuation of what happened in 2008." The push for biofuels, he said, "has clearly tightened up agricultural commodity markets. That's good for farmers, but it is not good for poor people around the world."

Many of those poor live in the United States. Some 43.6 million Americans, about 14 percent of the population, are receiving federal food stamps. Since October 2008, the number of Americans relying on food stamps jumped by 41.5 percent, and enrollment in the program has increased for 26 consecutive months. And thanks to the ethanol scam, those many millions are being priced out of the meat aisle. Over the past year, beef prices have risen more than 6 percent, and pork prices are up 11 percent. Economists are expecting overall grocery prices in the United States to rise by about 5 percent this year.

But the real - and likely more dangerous - food-price increases will happen outside of this country. Last year, the Organization for Economic Cooperation and Development projected that global grain prices are likely to be as much as 40 percent higher by 2020, and a London-based nonprofit entity, ActionAid, predicted that some 600 million more people could be left hungry by 2020 because of increased production of biofuels.

Mr. Brabeck, the chairman of Nestle, the world's biggest food company, has rightly put the spotlight on the biofuels madness. As the head of a company with $100 billion in annual food-related revenues, Mr. Brabeck clearly has a keen understanding of the global food industry. And last month during the World Economic Forum in Davos, Switzerland, he identified the stunningly obvious solution to the ongoing insanity. "No food for fuel," he said.

It's time - no, it's long past time - to heed Mr. Brabeck's advice. "No food for fuel" should be the mantra on Capitol Hill and at the United Nations. In addition, it should be a required oath for all of the candidates (Mr. Gingrich in particular) who are planning to campaign in Iowa for the 2012 presidential election.

Stop the madness.

Robert Bryce is a senior fellow at the Manhattan Institute. His latest book is "Power Hungry: The Myths of 'Green' Energy and the Real Fuels of the Future" (PublicAffairs, 2010).

Is Green All that Should Matter?

FROM-Net News Ledger

ALGARY - In the world-wide race to develop energy sources that are seen as “green” because they are renewable and less GHG intensive, sometimes the most basic questions remain unanswered.

In a paper released today, authors Michal Moore, Senior Fellow, School of Public Policy at the University of Calgary and Sarah M. Jordaan at Harvard University in the Department of Earth and Planetary Sciences, look at the basic question of whether these energy sources are ethical.

In addition to arguing that the greenhouse gas benefits of biofuel are overstated by many policymakers, the authors argue that there are four questions that need to be considered before encouraging and supporting the production of more biofuel. These questions are:

1.What is the effect of biofuel production on food costs, especially for poor populations?

2.Should more land be used for biofuel when the return of energy per acre is low? Are there better uses for that land?

3.In addition to worrying about the impact of global warming, should we not consider the impact on land of massively expanding biofuel production?

4 What are the other economic impacts of large scale production of biofuel?

“Policymakers, especially in the US, have been in a rush to expand biofuel protection,” says Michal Moore. “But they need to start thinking outside of the box of climate change and the corn lobby.”

“If policy is designed to create better outcomes for everyone, then we need to subject policy to ethical tests.

In many respects, current policy around biofuels fails those tests.”

The paper can be found at www.policyschool.ca then click on “latest papers”.

From the World of Unintended Consequences

FROM-Reuters

Africa mulls biofuels as land grab fears grow



Large land acquisitions for biofuel alarm hungry continent

* Sierra Leone farmers say Addax project threatens rice crop

* U.N. says well managed biofuel projects could work well
By Simon Akam

YAINKASA, Sierra Leone, Nov 30 (Reuters) - Farmers in this iron-roof village in Sierra Leone say they didn't know what they were getting into when they leased their land for a biofuel crop they now fear threatens their food harvests.

Addax Bioenergy, part of privately-owned Swiss Addax & Oryx Group, says it went through long consultations with locals when it won a lease for around 50,000 hectares (123,600 acres) for ethanol sugarcane in the poor West African country's centre.

Despite that, a land dispute has flared up, one that highlights a major obstacle to efforts to tackle climate change by growing fuel in some of the world's poorest places.

"We were tricked. We feel the way we're being treated is not in line with our agreement," said rice farmer Alie Bangura, 68. "They promised things when we gave up our land that didn't happen."

Addax says a large share of a competitive $12 per hectare goes directly to farmers, rather than via landlords or officials, and that a development programme to help farmers improve yields will ensure all villages have enough to eat.
Proponents of biofuel crops in rural Africa say they will help fight climate change, meet Africa's own chronic energy shortages and give badly needed income from under-used farmland; critics say they take food out of hungry mouths by turning arable land over to feed cars, stoking tension with communities.

As environment ministers gathered in the Mexican resort of Cancun on Sunday for U.N. talks aiming for agreement on steps to slow down global warming, biofuels are likely to get little attention as doubts grow about whether they are realistic.

By one estimate, satisfying the EU's biofuel targets alone will require an additional 4.5 million hectares of land by 2020, an area the size of Denmark. [nLDE65T15G]


"ALARMING ACQUISITIONS"

Environmental groups have become alarmed at the pace with which vast tracts in Africa are being bought up for fuel crops.

A study by Friends of the Earth in August said biofuel demand was driving a new "land grab" in Africa, with at least 5 million hectares (19,300 sq miles) acquired by foreign firms to grow crops in 11 countries it had studied.

Ethiopia has earmarked 700,000 hectares for sugarcane and up to 23 million for jatropha. In Tanzania, rice farmers have been forced off their land to make way for sugarcane, the group says.

Kenya and Angola each have received proposals for the use of 500,000 hectares for biofuels and a plan for 400,000 hectares of oil palms is underway in Benin. Environmentalists are worried.
"The rush is definitely still ongoing. It is quite alarming the rate of land acquisitions by large companies," Greenpeace Africa director Olivia Langhoff told Reuters by phone.

"It's doubtful that Africans will see any benefits. There's very little involvement from local communities or farmers."

Langhoff said that in many cases promises are made that only fallow or marginal land will be used, but the plantation expands into good land as demand increases, squeezing out food crops.

Residents near the Addax plantation, many of whom signed away their land with thumb prints because they can't write, say they thought the farm wouldn't affect their fields in what they call "bolilands", seasonally waterlogged areas suitable for rice growing, because the sugarcane is being planted in drier areas.

But irrigation channels dug up by the company have drained some of the bolilands, they say, damaging their rice fields. Other food crops of theirs such as cassava and wild palm trees used for cooking oil were razed when it developed the land.

"Even if Addax leaves the bolilands we will not be able to work," said farmer Abdulai Serry in Lungi Acre village. "They have dug up canals and the water is no longer settling."


"NO SILVER BULLET"

Addax, which negotiated the lease directly with local people for its Sierra Leone plantation, says the villagers were consulted about the projects impacts and a local lawyer represented them, a rare example of a truly grassroots deal.
"Some of those who complain, it's out of ignorance," Addax social affairs manager Aminata Kamara told Reuters. "When they see outside people, they don't see the benefits they will get."

But on a continent where most people in rural areas live off subsistence farming and soaring populations compete for dwindling earth, conflicts over arable land are common. Adding foreign buyers in the mix can be explosive.

In 2008 high food prices prompted countries like China, and Saudi Arabia to seek farmland abroad, sparking protests. A lease by South Korea's Daewoo for nearly half of the arable land in Madagascar, an island bigger than France, triggered a wave of protests that eventually ousted President Marc Ravalomanana.

And, as in Indonesia, natural forest might be cleared to grow fuel, making net carbon emissions bigger than fossil fuels.

In the Democratic Republic of Congo, home of the world's second-biggest tropical forest, China's ZTE Agribusiness plans a million hectare palm farm. Environmentalists fear massive deforestation.

Biofuel produced this way is also likely to fall foul of European environmental rules. [ID:nLDE65919H]

Most environment experts think biofuels do have a future in Africa, but only if properly managed.

"Biofuels can in Africa improve access to fuels ... and contribute to reducing greenhouse emissions, but biofuels are certainly not the silver bullet," said the United Nations' Environment Programme spokesman Nick Nuttall. "Africa needs to be careful about the choices it makes with biofuel production."

(Writing and additional Reporting by Tim Cocks; Editing by Alister Doyle)

From the World of Unintended Consequences

FROM-I Stock Analyst

Biofuel and bobwhites


By Spencer Hunt, The Columbus Dispatch, Ohio

The push to produce more corn and soybeans for biofuels might help lower gas prices and fight global warming, but it also could wipe out as many as two-thirds of the bird species that nest near farms.

On the flip side, if farmers grow grasses, the number of birds that nest near farms could double in parts of Ohio and other Midwestern states, researchers say.

Species that nest in the grassy "margins" around farms have the most to lose or gain, said Tim Meehan, a University of Wisconsin ecologist.

"I think the biggest concern is there are so many grassland birds that are already in danger," said Meehan, lead author for a study recently published in the Proceedings of the Natural Academy of Sciences.

"Take what you've seen so far over the last 100 years or so in bird trends and extend it," he said. "If you continue to annualize landscape, then expect more of the same and certain species to disappear."

Bird species that nest in prairies and fields of tall grasses can't compete with farming. Corn, soybean and wheat fields offer no shelter or food for grassland birds.

Doubling Down On Economic Insanity

Consider how far from free markets and just plain common sense we have come in the pursuit of "green energy". Not only are bio-fuels being subsidized with tax payer monies directly and indirectly through mandates, we are now doubling down with direct payments to farmers. Nothing against farmers, but they must be laughing all the way to the bank-with our money.

FROM-AP


USDA to match farmers' cellulosic feedstock income

SIOUX FALLS, S.D. (AP) - Farmers supplying the nation's largest biofuels producer with corn crop residue that can be converted to cellulosic ethanol can double their income under a new USDA program.

The agency has finalized the pilot Biomass Crop Assistance Program, which will help farmers get matching payments for delivering nonfood feedstocks to cellulosic ethanol plants.

Sioux Falls-based Poet plans to build an advanced biofuels plant next to its corn ethanol facility in Emmetsburg, Iowa.

The company has been testing the feedstock delivery system this fall, paying farmers about $40 a bone-dry ton for round bales containing corn cobs, leaves and husks. Farmers can then take their scale tickets to a Farm Service Agency office and double their money.

OIL POLITICS: Nigeria’s unacceptable biofuels policy

FROM-NEXT
Nnimmo Bassey

At the time the barrel price of crude oil shot up, the world began to sing the biofuels song. Biofuels were touted as a replacement for fossil fuels and the answer to poverty and even the climate crisis. They were presented as being both renewable and environment friendly.

Moreover, it was said that they would not compete with food crops in terms of land uptake, as some of them would be grown only on degraded and marginal lands. The idea of biofuels giving fossils fuels a good fight was so widespread that the formation of a “green” OPEC was proposed.

Research has shown that biofuels are just as harmful to the climate as fossil fuels when factors like loss of soil carbon and deforestation are computed. It has been proven that the energy output is actually same or less than what it took to cultivate, process, and transport the fuels. Thus, biofuels are not so green.

The reality of the push for biofuels is that they quickly metamorphosed into agrofuels - targeting food crops and pumping foods into machines rather than empty stomachs.The food crisis that hit the world when commodity speculations, conversion of grains into fuels, and other factors drove food prices up, made the mantra of agrofuels of the energy saviour of the world to be re-examined.

Lester Brown, of the Earth Policy Institute, warned in 2007, for instance, that the “grain it takes to fill a 25-gallon (95 litres) with ethanol just once, will feed one person for a whole year.” In the same year, the United Nations special rapporteur on the right to food described agrofuels as a “crime against humanity”, and called on governments to implement a 5-year moratorium on their production.

The Nigerian biofuel policy has been gazetted as Nigerian Bio-fuel Policy and Incentives No. 72 Vol 94 and is dated June 20, 2007. Let us briefly look at what the wholesale adoption of the agrofuels highway means to Nigeria and the world.

The push for agrofuels has meant a massive uptake of lands for the cultivation of oil palms, corn, cassava, sugar cane, and jatropha, among others. It has translated to land grabs in Africa, loss of lands by pastoralists to jatropha in Africa and India, and slave-like engagement of farmers as mere outgrowers in many parts of the tropical world.

The rush for agrofuels has some benefits, but the benefits have been for agribusiness, and the losers are small scale and family farmers and pastoralists.

In Nigeria, this rush saw cassava as the major target, with large swaths of farmlands being set aside for cassava to be converted into ethanol. Jatropha has also been an attraction with one company allegedly promoting its cultivation in Ogoni land for the production of what they cheekily call Ogoni Oil! In many parts of Northern Nigeria, the best-watered lands, often along rivers, have been grabbed for agrofuels cultivation.

In many cases, communities have been cajoled to give up their lands and become farm hands to big business on the promises of regular income and a better life that often is nothing more than a mirage.

Bio fuel policy
The Nigerian Bio-fuel Policy was produced, packaged, and delivered by the Nigerian National Petroleum Corporation (NNPC) without any public participation. It follows the signature pattern of oil sector arrangements where everything is skewed in favour of corporate actors while the environment is opened to nothing except exploitation.

The policy allows for massive tax breaks and all manners of waivers - exempting the operators from taxation, withholding tax and capital gains tax. They are also exempted from paying import duties and other related taxes on the importation and exportation of biofuels into and out of Nigeria. Moreover, for the first 10 years, such companies would not have to pay excise duties and would also not be required to pay value-added tax.

For what is known as the seeding stage, Nigeria is expected to engage in large-scale biofuels importation. This appears to follow the path already well oiled by the NNPC, a path where Nigeria exports crude oil and still depends on imports of petrol to meet our domestic needs. Starting off with massive biofuels import may be a clever way of not kick starting the use of the fuel but of entrenching the dependence on imports, while the farms point at unreachable possibilities.

The biofuels policy also recommends a most liberal loan system for the industry, with the funds coming from an ‘Environmental Degradation Tax’ that would probably include fines from gas flares. The policy expects to profit from continued massive environmental degradation in the oilfields of the Niger Delta, rather than taxing polluters and utilising the funds to detoxify the degraded Niger Delta environment. The policy aims to benefit from the crude oil and also from the damage inflicted on the land and the people.

Instead of requiring that the biofuels sector strictly obeys the Nigerian EIA Act of 1992, this policy requires the Federal Ministry of Environment to “prescribe standards” for the conduct of Environmental Impact Assessment of biofuels projects. It appears the plan is to ensure the subversion of subsisting laws and regulations.

The policy says nothing about the social and other impacts assessments that an industry of this sort requires. The idea is to build up sacred cows, as seen in the oil industry with its jaundiced joint venture arrangements that allow fines and charges (including community development project costs) to be computed as production costs and, therefore, never touch the profits of the oil companies. In addition, it sees local farmers as outgrowers, with no sense of ownership or control in the entire scheme.

The present Nigerian biofuels policy must be repealed and public debate opened over what sort of policy is needed for this sector.

What's new here?

It is not like this is a new concern, we wrote about this a couple of years ago.

FROM-UK Telegraph

Biofuel requirements for cars may help destroy the rainforest, watchdog says

Using biofuel in vehicles could be destructive to the rainforest as well as leading to higher green house gas emissions than using just petrol and diesel, a fuels watchdog has claimed.


Fuel providers are compelled to add an increasing proportion of biofuel to diesel and petrol under the Renewable Transport Fuels Obligation. This year 3.23 per cent must be made up of biofuel and by 2020 that increases to 13 per cent.

However, the first annual report by the Renewable Fuels Agency (RFA) claims that fuel companies are exploiting a loop hole which means they are not required to disclose the origin of nearly half the biofuel supplied to filling stations in 2009.

Last year Esso reported the source of only 6 per cent of its biofuel while BP reported 27 per cent. Shell, the best performing of the main oil companies, only revealed two thirds of its biofuels origins.

Palm oil is the cheapest fuel to buy and is used by most companies to meet part of their biofuels obligation.

However, it is also the most damaging to the environment due to the CO2 released when forest is burnt down to create plantations.

The RFA said: "The large proportion of unknown previous land use is of concern. If even a small proportion of this was carbon-rich grassland or forestland, it could have substantially reduced the carbon savings resulting from the renewable transport fuels obligation as a whole, or even resulted in a net release of carbon."

Indonesia is the third largest CO2 emitter after America and China due to the expansion of the palm oil industry.

Oil companies can provide certified sustainable palm oil which is slightly more expensive but last year only 0.5 per cent of the 127 million litres of palm oil added to petrol and diesel came from sources approved by the Roundtable on Sustainable Palm Oil, an international monitoring body.

The RFA report named Chevron, Murco and Topaz as failing to report any of the requirements under the RTFO.


More...

Just around the corner

FROM- New Republic


How Big A Deal Is The Alabama Biofuel Scandal?

In 2007, a tiny Alabama start-up called Cello Energy was running around telling people that it had devised a way to produce cellulosic ethanol at $16 per barrel, using material like hay, switchgrass, and wood chips. Investors perked up and started plunking down millions of dollars for the venture. Cellulosic ethanol, after all, is a promising concept—a low-carbon biofuel that wouldn't have all the problems associated with using corn or soy as feedstock. True, cellulosic ethanol isn't commercial quite yet, but scientists are perennially insisting that it's just around the corner.

Well, turns out the whole thing was too good to be true. Not only were Cello's promises overblown, but an Alabama jury just found the start-up guilty of fraud, ordering the company to by $10.4 million to one of its investors, pulpmaker Parsons & Whittemore. At Earth2Tech, Josie Garthwaite sorts through the court documents and points out that most of Cello's backers, including P&W and noted Silicon Valley venture capitalists Khosla Ventures, didn't really do due diligence on Cello at all. (A lot of venture capitalist are lavishing money on next-generation biofuels, and Khosla is one of the most hyperactive.)

Anyway, if this was just a case of a few investors losing their shirts, it would be mundane news. But there's a policy angle, too. It turns out the EPA may not have done its due diligence, either. The EPA's Renewable Fuel Standard, which is currently being updated, mandates 36 billion gallons worth of biofuel to be produced in the United States by 2022 (up from 9 billion this year). As part of the revised standard, the EPA is expecting 100 million gallons worth of cellulosic ethanol to be produced in 2010. But, as Garthwaite reports, the agency was counting on 70 million of those gallons to come from… Cello Energy. And Cello's not going to get anywhere near that amount—a best-case scenario is about 20 million gallons, assuming the technology even works.

So the EPA basically has two options: either offer up new subsidies to ethanol makers or reassess whether the targets in the revised Renewable Fuel Standard are too ambitious (the EPA's comment period for the updated standard is still ongoing). There's already been a great deal of concern that the frantic push for corn- and soy-based ethanol has been counterproductive from an emissions standpoint—since, if diverting crops for fuel leads to farmers elsewhere cutting down forests for crop land, some types of ethanol may actually be worse for the environment than gasoline. And there are worries that the push to increase the required ethanol blend in gasoline may damage motors or reduce mileage. Add to all that new questions about whether the EPA's targets for next-generation biofuels are unrealistic, too.
More...

Drunk Driving the Economy

FROM- WSJ

So Much for 'Energy Independence'

Whenever you read about ethanol, remember these numbers: 98 and 190.

They offer an essential insight into U.S. energy politics and the debate over cap-and-trade legislation that recently passed the House. Here is what the numbers mean: The U.S. gets about 98 times as much energy from natural gas and oil as it does from ethanol and biofuels. And measured on a per-unit-of-energy basis, Congress lavishes ethanol and biofuels with subsidies that are 190 times as large as those given to oil and gas.

Those numbers come from an April 2008 report by the Energy Information Administration: "Federal Financial Interventions and Subsidies in Energy Markets 2007." Table ES6 lists domestic energy sources that get subsidies. In 2007, the U.S. consumed nearly 55.8 quadrillion British Thermal Units (BTUs), or about 9.6 billion barrels of oil equivalent, in natural gas and oil. That's about 98 times as much energy as the U.S. consumed in ethanol and biofuels, which totaled 98 million barrels of oil equivalent.

Meanwhile, ethanol and biofuels are getting subsidies of $5.72 per million BTU. That's 190 times as much as natural gas and petroleum liquids, which get subsidies of $0.03 per million BTU.

The report also shows that the ethanol and biofuels industry are more heavily subsidized -- in total dollar terms -- than the oil and gas industry. In 2007, the ethanol and biofuels industries got $3.25 billion in subsidies. The oil and gas industry got $1.92 billion.

Despite these subsidies, the ethanol lobby is queuing up for more favors. And they are doing so at the very same time that the Obama administration and Congress are pushing to eliminate the relatively modest subsidies for domestic oil and gas producers. Democrats want to cut drilling subsidies while simultaneously trumpeting their desire for "energy independence."

The cap-and-trade bill passed by the House aims to "create energy jobs" and "achieve energy independence." Meanwhile, Democrats are calling to eliminate drilling subsidies that have encouraged advances in technology that have opened up vast new U.S. energy sources. These advances have made it profitable to extract natural gas from the Barnett Shale deposit in Texas and the Marcellus in Pennsylvania -- deposits once thought too expensive to tap.

President Barack Obama's 2010 budget calls for the elimination of two tax breaks: the expensing of "intangible drilling costs" (such as wages, fuel and pipe), which allows energy companies to deduct the bulk of their expenses for drilling new wells; and the allowance for percentage depletion, which allows well owners to deduct a portion of the value of the production from their wells. Those breaks provide the bulk of the $1.92 billion in oil and gas subsidies.

In May, Mr. Obama called the tax breaks for the oil and gas industry "unjustifiable loopholes" that do "little to incentivize production or reduce energy prices."

That's flat not true. The deduction for intangible drilling costs encourages energy companies to plow huge amounts of capital into more drilling. And that drilling has resulted in unprecedented increases in natural gas production and potential.

An April Department of Energy report estimated that the newly available shale resources total 649 trillion cubic feet of gas. That's the energy equivalent of 118.3 billion barrels of oil, or slightly more than the proven oil reserves of Iraq.

Eliminating the tax breaks for drilling will make natural gas more expensive. Tudor, Pickering, Holt & Co., a Houston-based investment-banking firm, estimates that eliminating the intangible drilling cost provision could increase U.S. natural gas prices by 50 cents per thousand cubic feet. Why? Because without the tax break, fewer wells will be drilled and less gas will be produced. The U.S. consumes about 23 trillion cubic feet of gas per year. Simple arithmetic shows that eliminating the drilling subsidies that cost taxpayers less than $2 billion per year could result in an increased cost to consumers of $11.5 billion per year in the form of higher natural gas prices.

Amid all this, Growth Energy, an ethanol industry front-group, is pushing the Environmental Protection Agency to adopt a proposal that would increase the amount of ethanol blended into gasoline from the current maximum of 10% to as much as 15%.

That increase would be a gift to corn ethanol producers who have never been able to make a go of it despite decades of federal subsidies and mandates. Growth Energy is also pushing the change even though only about seven million of the 250 million motor vehicles now on U.S. roads are designed to run on fuel containing more than 10% ethanol.

There is plenty of evidence to suggest that gasoline with 10% ethanol is already doing real harm. In January, Toyota announced that it was recalling 214,570 Lexus vehicles. The reason: The company found that "ethanol fuels with a low moisture content will corrode the internal surface of the fuel rails." (The rails carry fuel to the engine injectors.) Furthermore, there have been numerous media reports that ethanol-blended gasoline is fouling engines in lawn mowers, weed whackers and boats.

Lawyers in Florida have already sued a group of oil companies for damage allegedly done to boat fuel tanks and engines from ethanol fuel. They are claiming that consumers should be warned about the risk of using the fuel in their boats.

There is also corn ethanol's effect on food prices. Over the past two years at least a dozen studies have linked subsidies that have increased the production of corn ethanol with higher food prices.

Mr. Obama has been pro-ethanol and anti-oil for years. But he and his allies on Capitol Hill should understand that removing drilling incentives will mean less drilling, which will mean less domestic production and more imports of both oil and natural gas.

That's hardly a recipe for "energy independence."


More...

US has had success with this

FROM- Business Mirror

Small-scale biofuel production holds more promise, says USAID

DECENTRALIZED biofuel production, or small-scale factories built on degraded or underused lands, has the potential to provide energy to half a billion people living in poverty in rural Asia.

The report, Biofuels in Asia: An Analysis of Sustainability Options, sponsored by the United States Agency for International Development (USAID) stressed that decentralized production offers a “promising avenue” to enhance the energy independence of Asian nations in a manner that is also commercially viable and without large subsidies.....

rest of article here
More...

"Let them eat-palm oil"

FROM-BBC

'Hidden cost' of Colombian biofuel

Colombia's government proudly claims that it is the biggest producer of biodiesel and ethanol in Latin America after Brazil, but human rights groups do not share that enthusiasm.

Critics warn that the cultivation of palm trees to produce biodiesel is a threat to Colombia's indigenous groups and other minorities, including Afro-Colombians.

In rural areas, there is evidence that some people have been forcibly displaced to make way for biofuel production.

Last year, the United Nations stopped its investment in the sector in Colombia.

But while ethanol production in Brazil has been pored over by experts and activists, the challenges faced by Colombia remain relatively unexamined.

Colombia's agriculture minister, Andres Fernandez, stresses that one of the main aims of President Alvaro Uribe's administration is to keep the production of biofuels "on a growing path".

Mr Fernandez argues that this is "not one government's policy, but State policy".

He dismisses accusations that the production of biofuels squeezes food output.

"There are 4.5 million hectares of cultivated land and another 4.5 million of hectares of uncultivated land, [but] that land would not be used for food production - it would stay just as it is," he says.

Fuel or food?

Last year, UN food chiefs warned that governments had to review urgently their policies on growing crops for biofuels.

The UN Food and Agriculture Organisation (FAO) said biofuels were of "limited use" for solving the planet's energy needs.

At the same time, they pushed up food prices by diverting valuable crops such as sugar maize and oilseed from food use to energy use.

Mr Fernandez says he respects the UN viewpoint and its decision to suspend investment in biofuels in Colombia, but he says his country has its own perspective.

He argues that bio-fuels have had a "wonderful effect" and have led to investment in deprived areas of the country benefiting peasants and minority groups.

But this effect is not viewed quite as wonderfully by many rural workers in the Choco province, in north-west Colombia.

They complain of being forced off their land to make way for palm trees - and accuse the government of being deaf to their pleas for help.

One of the workers, Eustaquio Polo Rivera, told BBC Mundo that he lost his land after an incursion by right-wing paramilitaries in 1996.

"We used to produce what we needed for ourselves: bananas, corn, rice. But one day, soldiers just arrived and took our land. They destroyed everything in the community," he says.

"They told me they needed the land to fight the guerrillas, but we soon realized that the point was to take our land.

"We tried to resist, but the armed men warned us they would take no responsibility for the families who decided to stay."

Violations denounced

According to Mr Polo, more than 500 people fled immediately.

"When we tried to go back, our land was planted with palm trees," he says.

"In my own community, there are between 30 and 40 hectares of palm trees.

"The government hasn't shown any interest in returning our land because the paramilitaries carry on moving from one location to another and the big companies have powerful allies."

Fidel Mingorance is chairman of Human Rights Everywhere (HRE), one of several NGOs denouncing the forced displacement of communities, often of African descent, to make way for palm trees.

"It all started in Tumaco, in South Colombia, and now there are all sorts of violations - forced displacement, assassinations, property invasion," he says.

Leonidas Tobon, the director of technological development at the Ministry of Agriculture, accepts there was a case of forced displacement in Choco, but says it was a one-off.

"The cultivation of palm trees is concentrated in four regions. Only 10% of it is in areas occupied by Afro-Colombians and 30% of land used to grow the trees belongs to small farmers in any case," he says.


More...

Is this a trick question ?

What can justify a policy that deliberately increases the price of food and fuel?

FROM- The American

Lose-Lose on Biofuels?
Forcing the market to produce large amounts of renewable fuel will harm consumers. Even though it reduces some emissions, it increases others.

The Environmental Protection Agency recently released its analysis of the renewable fuel standard enacted by the Energy Independence and Security Act of 2007. The standard requires 11.1 billion gallons of renewable fuel to displace petroleum fuel in 2009, ratcheting up each year until reaching 36.0 billion gallons of renewable fuels by 2022. There are separate volume requirements for advanced biofuels, cellulosic, and biodiesel.

Forcing the market to produce large amounts of renewable fuel will harm consumers in two ways: it will increase prices at the pump, because biofuels are more costly than gasoline, and it will drive up the price of food, because it diverts crops into fuel. The impact of food price inflation will weigh most heavily in developing countries where food purchases comprise larger shares of consumption. Food expenditures account for as much as 70 percent of household consumption among lower income groups in the developing world.

What can justify a policy that deliberately increases the price of food and fuel? Calling passage of the bill the “shot heard ‘round the world,” House Speaker Nancy Pelosi said it would improve the “health of our children.” But this is questionable at best. While the Environmental Protection Agency (EPA) analysis suggests that the switch toward renewables will decrease ammonia, carbon monoxide, and benzene, it also predicts “significant increases in ethanol and acetaldehyde emissions” and “more modest increases in nitrogen oxides, formaldehyde, particulate matter, hydrocarbons, acrolein, and sulfur dioxide.” Citing time constraints, the EPA did not do a full analysis of the net health effects of these emission profiles, but a reasonable assumption is that the detrimental health impacts from increased particulate matter will at least offset the health improvements from the predicted reductions in the other pollutants.

Supporters of the Energy Independence and Security Act of 2007 (EISA) also claimed that it will reduce greenhouse gases. Both Speaker Pelosi and then-President Bush said the bill will help reverse global warming. Indeed, much of the early enthusiasm for biofuels was based on the belief that their use would reduce greenhouse gases. It is true that burning biofuels results in less tailpipe emissions of greenhouse gases relative to burning petroleum. Yet this ignores the increase in emissions that results from the production of biofuels, especially the land use changes as farmers convert forest and grassland into cropland for biofuel production. An article published in Sciencemagazinein 2008 found that “corn-based ethanol nearly doubles greenhouse gas emissions over 30 years and increases greenhouse gases for 167 years.” Another article in Scienceconcluded that crop-based biofuels create a “biofuel carbon debt of 17 to 420 times more carbon dioxide than the greenhouse gas reductions that these biofuels would provide by displacing fossil fuels.”

Congress was aware of this concern. EISA requires that the mandated renewable fuels reduce greenhouse gases relative to petroleum, and it also requires emissions to be measured on a “lifecycle” basis that includes any “significant emissions from land use changes.” Under EISA, corn-based renewable fuel must result in a 20 percent reduction relative to petroleum; advanced (i.e., non–corn based) biofuels and biodiesel must result in a 50 percent reduction; and cellulosic biofuel must result in a 60 percent reduction. However, EISA gives the EPA discretion to lower these requirements by up to 10 percentage points.

This is where the EPA’s analysis is especially interesting. Given the results published in Science, many biofuels might not meet the greenhouse gas reduction required by EISA. This would largely gut the biofuel mandate.
More...
The EPA’s findings indeed show a substantial increase in greenhouse gas emissions stemming from the initial land use changes needed to meet the mandate. Only over a long time horizon do the relatively clean-burning fuels start to accrue reductions in greenhouse gases relative to petroleum.

The following figure from the EPA’s analysis shows the estimated emission profiles for corn-based biofuel, soy-based biodiesel, sugarcane ethanol, and switchgrass ethanol, stemming from the 2022 mandate of 36.0 billion gallons. There is an extremely large spike in emissions due to initial land-use changes, especially for corn-based ethanol and soy-based biodiesel. It takes more than 30 years for the emission reductions from these cleaner burning fuels to make up for the spike in emissions from the land-use changes. (Sugarcane and switchgrass biofuels fare much better.)



Opting not to substantially gut EISA’s biofuel mandate, the EPA evaluates these time profiles using either a very long time horizon of 100 years (so that there are more years in the future garnering emission reductions in order to dominate the first-year emissions spike), or a shorter time horizon (30 years) but with a zero discount rate (eliminating the typically assumed preference for current benefits relative to future benefits).

This figure clearly calls into question the merits of the renewable fuel standard. At a cost of higher fuel prices (the EPA predicts 2.7 to 10.9 cents more per gallon), higher food prices (the EPA predicts $10 more per person per year on food), increases in harmful local pollutants, and a considerable increase in short-term greenhouse gas emissions, the standard only starts paying climate-related dividends many years in the future.

There are three important concerns here: First, it is dangerously naïve to consider only direct emissions stemming from different fuels. As acknowledged in EISA, the full lifecycle emissions from a fuel include “all stages of fuel and feedstock production and distribution, from feedstock generation or extraction through the distribution and delivery and use of the finished fuel to the ultimate consumer.” A lifecycle analysis is extremely complex and the results are highly uncertain.

Second, a lifecycle analysis will present different emission time profiles for different fuels, leading to the tricky question of weighing the current emissions increase from land-use changes to the relative emission reductions in later years. The net results are highly contingent on the time horizon used for the evaluation, as well as the discount rate selected.

The third, and most important, lesson is an old one: reducing greenhouse gas emissions is best achieved from a comprehensive cap or tax that allows full flexibility across sectors or industries. Right now, Congress is considering the Waxman-Markey bill, which would establish an economy-wide cap on greenhouse gases. With a firm cap in place, a law that mandates different fuel mixes will increase the cap’s compliance costs and will not achieve any further reductions. Indeed, to the extent that land use changes are not captured by the cap, the biofuels mandate may actually lead to emission increases. Unfortunately, not only does the Waxman-Markey bill keep the biofuels mandate in place; it goes one step further by creating a renewable electricity standard that mandates different fuel types for electricity generation.

Ted Gayer is an associate professor at Georgetown University’s Public Policy Institute. From July 2007 to July 2008, he served as deputy assistant secretary of economic policy at the Treasury Department