Agricultural Policy and Energy Policy

After listening to President Obama get sworn into office on Tuesday and hearing him talk about the need for change in energy policy, I couldn't help but think about the link between our food system and energy policy. This occurred to me primarily because my fiancee and I are in the midst of reading The Omnivore's Dilemma by Michael Pollan, which is an excellent analysis of the deficiencies in America's food system and how it impacts the country's health, environment, economy, and way of life.

Pollan also contributes to the NY Times Magazine. In an October 2008 open letter to the next President, Pollan cites some striking statistics. For instance:

• 19% of the fossil fuels burned in the US are used by the agricultural sector, making it the 2nd largest category of fossil fuel use (cars are #1)
• One study says that agriculture contributes as much as 37% of the greenhouse gases we put into the atmosphere
• While in 1940, 1 calorie of fossil fuels could produce 2.3 calories of food energy, it now takes 10 calories of fossil fuel to produce 1 calorie of food

This means that while we can talk about electricity generation and hybrids until we are blue in the face, we will be missing a huge piece of the energy picture. While measurements such as yield per acre have gone up tremendously during this transition in agriculture, such a measurement gives a very flawed picture of agricultural efficiency. If efficiency is measured by amount of output for a given amount of input, the more relevant input should be energy. What's worse is that policymakers are making the situation progressively worse, and "organic" agriculture does relatively little to fix the problem. As Pollan points out,

It must be recognized that the current food system — characterized by monocultures of corn and soy in the field and cheap calories of fat, sugar and feedlot meat on the table — is not simply the product of the free market. Rather, it is the product of a specific set of government policies that sponsored a shift from solar (and human) energy on the farm to fossil-fuel energy.

In order to develop any kind of comprehensive energy policy, the agricultural dimension must be considered. Electrical grid operators complain about solar energy because of intermittancy problems, but we could be using solar power even more efficiently to power our food system. Policymakers can hopefully seize this moment to lead us to a more responsible system of agriculture. As for consumers, when people talk about "calls for sacrifice" for the sake of the country, they should keep in mind that changing our food choices as consumers could have an even bigger impact on America's energy security and the environment than many of the other conservation measures that tend to get more attention.

Corn Prices Hit Record High

As corn prices hit a record high of $6 a bushel this Thursday, I could not help but smile and shake my head at the predictable effects corn ethanol fuel demand has had on corn prices:

"For years, corn was cheap and fermentation processes for ethanol production came to completely dominate the biofuel industry in North America," Michael Jackson, president and chairman of Vancouver-based ethanol maker Syntec Biofuel, said this week. "Now, with corn prices well over $5 a bushel, corn ethanol economics have gone out the window."(AP Story)

Higher corn prices also cause other food prices to go up. Because corn is used as feedstock, the price of corn is linked to meat and dairy prices, meaning that higher corn prices also mean higher food prices in general.

Looks like corn based ethanol is still a pretty corny idea...

Biodiesel from...Scrapple?

Here's another example of how the ridiculous federal subsidies and mandates for corn based ethanol are starting to backfire. High soy prices have prompted a biodiesel plant in Cleveland to retrofit its facility to process discarded pig fat into fuel rather than its original soy feedstock. Not only is there capital expenditure involved, but using pig fat requires an additional processing step that will increase operating costs as well. Even with the biodiesel blending tax credit, processing soy is no longer economical. Soy price has ballooned from an increased worldwide demand of soy compounded with loss of supply from crop switching to heavily subsidized corn for ethanol.

For one, I find it amazing that the additional costs associated with switching to pig fat are economical. Also, I wonder if this is a reasonable use of waste from pork rendering facilities. I imagine there are some site specific factors that make the aforementioned relationship work, but it would be great to turn another waste stream into fuel (as opposed to a major food crop).

I really don't understand how our federal government can keep saying that all the tax breaks to domestic food-fuels are a good idea. It seems to me that a rise in food prices should be a big red flag. I guess that a good chunk of Americans may be more insulated from changes in food price than fuel price, but there are also millions in poverty that must be acutely affected. I did appreciate the fact that Bush's State of the Union generally lauded biofuels instead of corn ethanol specifically, but the goverment certainly hasn't made any major policy changes to reflect the recognition that corn and soy are not the answer. May this be the 954,102,041th time a member of this course wished it to be January 20, 2009.