Data Also Disproves Food v. Fuel Claims

The Wall Street Journal’s Scott Kilman reported earlier this week on a letter sent by General Mills, the Grocery Manufacturers Association and Kraft Foods to Ag. Sec. Tom Vilsack, asking for reduction of trade tariffs on sugar. From Kilman’s article and the letter, it’s clear that grocery manufacturers are once again trying to distract public attention from their price increases by pointing a finger of blame at biofuels.

Last year, you may recall, Roll Call exposed the Grocery Manufacturers Association’s plan to use the food vs. fuel debate to cover their industry’s price increases.

Kilman writes:

Prices are up because the world is consuming more sugar than farmers are producing. One big factor: The world’s largest sugar producer, Brazil, is diverting huge amounts of its cane crop to making ethanol fuel. Likewise, the food industry has complained bitterly in recent years about the U.S. ethanol industry’s ravenous appetite for corn, which helped push up prices for that key ingredient too.”

Sugarcaneblog provides the real explanation for current, temporary sugar price increases – rain has slowed the pace of harvesting – even while Brazil’s sugar production is up 15 percent this year.

Reuters reporter Brad Dorfman provides much more thorough, clearer analysis on the claims made by the grocery manufacturers:

Food industry analysts say inflation should be contained for an industry that sharply increased prices in the past year as costs for commodities such as vegetable oil, wheat and corn surged.
“Many commodity prices have retreated, and manufacturers are trying to defend the price increases as consumers and retailers try to rein in costs in a weak economy.”

The Consumer Price Index shows that food prices have actually declined a percentage point over the first half of this year, after rapid increases in the past two years. The data also show that the increases in the past year were out of proportion to inflation in other categories.

CPI Percent increase/decrease

2002

2003

2004

2005

2006

2007

2008

2009

Food

1.5

3.6

2.7

2.3

2.1

4.9

5.9

-1.1

Energy

10.7

6.9

16.6

17.1

2.9

17.4

-21.3

14.8

Other Goods

1.9

1.1

2.2

2.2

2.6

2.4

1.8

2.3

Source: Bureau of Labor Statistics.

Neither biofuels nor energy provide a good explanation for increases in food prices.

Increases in food price inflation do not correlate well to either biofuel production or energy price data.

Increases in food price inflation do not correlate well to either biofuel production or energy price data.

Even a Congressional Budget Office study requested by Members of Congress who wanted to make a case that biofuels’ were raising the cost of government food programs could only find a 10 percent to 15 percent impact on food prices from biofuels. That study showed that nearly two-thirds of the price increases could not be explained by either biofuels or energy prices.

Of the 5.1 percent CPI increase for food between April 2007 and April 2008, energy had a larger effect than biofuels. But even together, they account for a fraction of food price inflation:

Biofuels

0.5 to 0.8

10 to 16%

Energy

1.1

22%

Other Causes

3.2 to 3.5

62 to 68%

Source: Congressional Budget Office, “The Impact of Ethanol Use on Food Prices and Greenhouse-Gas Emissions,” April 2009

So why is GMA resurrecting its campaign to blame biofuels for food price increases? (See also their letter to Sen. Boxer from a few weeks ago.) Likely because it was a very profitable strategy for them last year and it continues to work, at least with half the time.

Land O’Lakes

16%

Kraft Foods

21%

Sara Lee

55%

General Mills

61%

Kellogg Co.

9%

Source: 2020 Project, FoodPriceTruth.org.

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Setting the Record Straight

I was pleased to read AP reporter Deborah Jian Lee’s story on Jan. 12, saying that the food and fuel debate has “receded to a murmur, and even the Grocers Manufacturers Association, one of the most vocal biofuel critics, seems to be backing off a bit.” Biofuel producers will likely remember that last May the Capitol Hill newspaper Roll Call revealed that the Grocery Manufacturers Association had launched a public relations effort to blame biofuels for rising food prices. I asked the question then whether the press would set the record straight, as noted economists and BIO have tried to do throughout the year.
It was interesting to note the comments of the GMA’s Scott Faber, who apparently said ethanol production is “just one in seven sources of commodity price inflation.”

Yes, Virginia

One of the most strikingly circular arguments put forward to support inclusion of current estimates of indirect land use change emissions in both California’s Low Carbon Fuel Standard and the EPA’s Renewable Fuel Standard Life Cycle Assessment is that these estimates are so large. The University of California Berkeley Letter to EPA from Michael O’Hare et al. and the previous letter to California’s Air Resources Board by the same group (Mark Delucchi et al.) are examples of the argument:

The salience of this requirement lies in the size of current estimates of these indirect emissions: added to typical direct emissions values, they indicate that substituting certain biofuels, especially corn ethanol, for gasoline will actually increase the global warming (GW) intensity of motor fuel, or decrease it so little (depending on how it is calculated) that these biofuels would fail to meet EISA required GHG reductions.”

And again:

The best methods currently available for estimating market-mediated effects are economic models such as partial and general equilibrium models. Several groups are currently employing these models to estimate indirect LUC, and despite considerable uncertainty, none has concluded that zero grams of CO2 per megajoule is the best estimate of the effect. Ignoring an effect that may be large simply because it is uncertain is unjustifiable.”

And once again:

So far no models, in particular no peer-reviewed models, have been advanced that come up with values for iLUC that are significantly lower than those in the Searchinger et al paper.”

So in the spirit of the holiday season, I’d like to offer a similar argument. This year, 2008, will be the 50th anniversary of the North American Aerospace Defense Command’s (NORAD) tradition of tracking Santa’s flight from the North Pole around the world. The tradition began in 1955, but NORAD inherited it in 1958. Fifty-plus years of scientific modeling and measurement of the phenomenon ought to be considered proof positive that Santa Claus exists.

Happy Holidays everyone.

Midnight Rule

The EPA apparently missed the statutory deadline (Dec. 19) to publish the Notice of Proposed Rulemaking for the Renewable Fuel Standard. The Bush administration last summer announced that it would not promulgate new rules during its final 30 days, in order to stay away from “midnight rulemaking.” That self-imposed deadline (Dec. 20) also passed.

The rule is said to be a victim of lobbying on the part of the biofuel industry and environmental groups. Marianne Lavelle, a former reporter with U.S. News & World Report now with The Center for Public Integrity, analyzes the activities of both sides, saying, “In the waning days of the Bush administration, a lobbying frenzy is now underway over the indirect impact this homegrown energy solution may have on land use around the world.” Lavelle reports that the dispute is over how to properly measure the theoretical impact of U.S.-produced biofuels on land use around the world. As she summarizes it, “‘Previous accountings of emissions for biofuels haven’t adequately considered that land is a scarce resource,’ said Jeremy Martin, of the Union of Concerned Scientists, one of the experts who met with OMB.”

According to TIME magazine’s Michael Grunwald, the dispute is over whether the EPA will use a “strong” or a “weak” test: “The EPA is now devising a “life-cycle” test designed to measure whether various biofuels really reduce overall carbon emissions from the field to the tank; the farm lobby is already pushing for a weak test, because a strict one could halt the biofuel revolution.” Grunwald, of course, is already convinced that biofuels are worse for the environment that gasoline. (See earlier post here.)

Grunwald’s article represents the problem with the EPA’s announcement of numerical calculations: neither the industry nor the environmental groups would be willing to accept them as accurate. Many environmental groups would like to convince the American public that biofuels are either worse than gasoline or that the reduction of greenhouse gas emissions is so small that it wouldn’t be worth it. That task might not be very difficult in the current economic climate.

With daily drops in the price of oil, biofuels now are assumed to be unable to compete on price with gasoline. Susan Wilson, a writer at Tech.Blorge, poses the question “Are biofuels still economically feasible?” She writes:

While the abundance of fuel and decrease in gas prices has been a welcome relief to most people in this awful economy, it has also lowered the perceived need for immediate fossil fuel replacements.
“Improving our air quality is a marvelous goal as long as it doesn’t inconvenience people too badly or cost too much. When gas prices were high, switching to cleaner cars and fuels was not only seen as good for the environment but patriotic. Now, it costs too much for people reeling from the collapse of our economy, massive job losses, and uncertainty over what lies ahead.”

If Americans are really wondering why this year’s recession occurred, the first place to look would be the $100-a-barrel swing in oil prices. Perhaps TIME should have considered the barrel of oil for its Man of the Year.

TIME Magazine’s Journalism Scam

Or How TIME Eliminated Fairness In Reporting

As a former reporter and scientist I read Michael Grunwald’s recent story in TIME, The Clean Energy Scam with a certain amount of dismay. The New York Times calls Michael Grunwald, “a talented Washington Post reporter.” However talented Mr. Grunwald may be, in this story he has broken one of the key tenets of journalism — tell the whole story, not just the part you like. For when you only tell part of the story, your audience can no longer trust you.

I went hunting around on the Internet for reporting guidelines and found the guidelines used by WGBH’s show Frontline. They have a section on fairness in which they say,

“Specifically, fairness means that producers:

  1. will approach stories with an open and skeptical mind and a determination, through extensive research, to acquaint themselves with a wide range of viewpoints;
  2. will try to keep personal bias and opinion from influencing their pursuit of a story;
  3. will carefully examine contrary information;
  4. will exercise care in checking the accuracy and credibility of all information they receive, especially as it may relate to accusations of wrongdoing;
  5. will give individuals or entities who are the subject of attack the opportunity to respond to those attacks;
  6. will represent fairly the words and actions of the people portrayed;
  7. will inform individuals who are the subject of an investigative interview of the general areas of questioning in advance and, if important for accuracy, will give those individuals an opportunity to check their records;
  8. will try to present the significant facts a viewer would need to understand what he or she is seeing, including appropriate information to frame the program; and,
  9. will always be prepared to assist in correcting errors.”

Mr. Grunwald’s piece reads less like the cover story of a prominent weekly news magazine and more like an opinion column on the editorial pages of a newspaper. Mr. Grunwald talks to four scientists about biofuels, all of whom had comments that support his doom and gloom thesis. He did not speak to anyone who had an opposing viewpoint. When he mentions Tim Searchinger’s study published in Science, he refers to it as, “groundbreaking.” Last time I checked it was scientists whom determined what was groundbreaking.

Let’s see, so far Mr. Grunwald has broken rules 1, 2, and 3.

Well who else could Mr. Grunwald have spoken with. Well, the National Corn Growers Association seems to have an opinion on this issue — in fact they make it crystal clear on their homepage. He also could have called the American Lung Association of the Upper MidWest, or any number of other groups or scientists.

Mr. Grunwald closes with, “Advocates are always careful to point out that biofuels are only part of the solution to global warming, that the world also needs more energy-efficient lightbulbs and homes and factories and lifestyles. And the world does need all those things. But the world is still going to be fighting an uphill battle until it realizes that right now, biofuels aren’t part of the solution at all. They’re part of the problem.”

Who are these advocates? It reminds me a bit of the “some people say,” criticism of Fox news (see video below).

Could it be that Mr. Grunwald is inserting his own opinion?

An Interesting Coincidence?

The papers published in Science two weeks ago continue to make headlines, as a quick search of Google News will show. Also this week, oil reached the $100 per barrel mark.

Meanwhile, debate over the Science papers continues, and some truths are out there, as we said when we began this public forum.

Nathanael Greene of the Natural Resources Defense Council notes the media have made rather simplistic assessments of the Science papers.Greene writes that the issues of land use raised by the Science articles have already been addressed through public policy. “Fortunately, we knew about these dynamics before yesterday, and we’ve won a preemptive victory in getting the dynamics written into the legislation in the form of the land-use safeguards and minimum lifecycle GHG standards.” Greene’s posting drew many comments worth reading.

Candace Wheeler, Technical Fellow of Research & Development at GM, notes that the issues raised by the Science articles have been addressed by the biofuel community. She writes on the GMNext.com blog: “It’s true: when we analyze biofuel pathways, we need to properly account for impacts of land use changes. No argument there. But the idea that this concept is being ignored just isn’t so.” Note especially the discussion surrounding Wheeler’s posting by Michael Wang and Bruce Dale.

Perhaps the media will take a fresh look at the issue. Angel Gonzalez of the Seattle Times posted the following on Feb. 21.

Biofuels have taken flak in recent studies that claim running cars on Midwestern grain and Malaysian palm oil creates more greenhouse gases than created by the reviled fossil fuels. But what about fuels made out of agricultural waste, combined with high-yielding biotech-enhanced crops exclusively dedicated to energy?

“The next generation of dedicated energy crops shows tremendous potential of improving the greenhouse gas profile of agriculture,” said Matt Carr, an official with the Biotechnology Industry Organization in Washington during a conference call today to discuss biofuels.”