Should we Produce More Food or More Biofuel?
69The Political Process Won't Work Here
Before answering this question it would be helpful to define who "we" refers to and, once that is determined, how "we" are to make our wishes on the topic known.
If we refers to a family that owns property with oil under it then that family can choose to either grow food or pump oil. However, once the size of our we expands beyond an individual family and the property they own, the problem becomes more difficult. First of all how are we supposed to make our wishes known? One way would be to support politicians who take a stand on either side of the issue however, I am unaware of any politician in the world whose campaign is limited to supporting either producing more food or more biofuel. Instead, all politicians have positions on a large number of issues making it impossible to determine just what the people voting for a particular politician really want. Take the current U.S. Presidential candidates, John McCain and Barak Obama each with positions on thousands of issues. If an individual casts a vote for one of them based upon that candidate's position on the issue of food vs biofuels how will the candidate, or anyone else, know if the vote was because of the food vs biofuel position or their position on some other issue such as the Iraq War?
Group meetings and/or plebiscites devoted to the issue of food vs biofuel production alone are another possible way of trying to get a consensus on the issue. But these take time and, with literally thousands of other issues needing decisions this way is not very practical either. Further, conditions change so these meetings and voting for each issue would have to be called every time there is a change in conditions.
There is a better way and that is to use the free market. By letting the impersonal market set prices based upon supply and demand of the product lets individual consumers vote on the issue every time they choose to purchase one product over another. In this way resources are directed toward the production of products that society wants.
The Food "Crisis", Like the Energy "Crisis" is the Result of Government Mis-management
Today the world is facing bogus crises in energy and food. The so called energy crisis is mainly the result of the mistaken belief that the world is running out of oil, which is currently the main source of energy for the industrialized world. The fear here is that not only is the supply of that resource finite, which technically it is, but that the bulk of the deposits are in the Middle East, an area of the world that is both politically unstable and, thanks to the Middle Eastern dominated OPEC (Organization of Petroleum Exporting Countries) regulates oil drilling production within its member nations so as to maximize the price of oil. Because of this we are supposedly relying on an area of the world that can, it is feared, cut off our supplies at any time.
To combat this supposed threat, politicians in the rest of the world have decided to become energy independent by subsidizing the production of biofuels (with corn based ethanol being the crop of choice in the U.S.). With large amounts of taxpayer funds being directed toward the subsidizing the production of biofuels and government regulations mandating that a certain percentage of fuel sold must consist of the local biofuel, the demand by taxpayer subsidized producers of biofuels for corn and other agricultural crops to produce biofuels has skyrocketed which in turn has led farmers to convert their fields from production of food crops to the production of the taxpayer subsidized crops of choice (they vary by country) for biofuels. With their production costs covered by taxpayer subsidies and demand for the biofuel guaranteed by government mandates forcing consumers to either purchase biofuels or go without fuel, it is no wonder that world food production has decreased substantially with the result that prices consumers pay for food in the wealthier nations has risen drastically while, in poorer parts of the world people have to just go without.
It is very clear that the current so called food crisis is the direct result of governments throughout the world attempting to "solve" an energy crisis and ending up not only making the energy problem worse but creating a food crisis as well.
There is Plenty of Oil in the World
As to the so called energy crisis, tracing its source is a little more complex thanks to nearly 40 years or more of misguided government interventions into this sector of the economy along with confusion and misinformation spread by politicians seeking to advance their careers. But here are a few facts:
- First of all the world is no where near running out of oil as the U.S. and Canada alone each have huge reserves in the form of shale oil deposits in Colorado in the U.S. and Alberta in Canada. In each nation these reserves alone equal the known reserves of the Middle East (that is the U.S. reserves in Colorado exceed those of the Middle East while, at the same time, the Canadian reserves by themselves also exceed those of the Middle East)
- The U.S. also has additional reserves, which are being pumped in places like Texas and California as well as off shore in the Gulf of Mexico and off the coast of California. In addition to these sources, from which oil is currently being pumped, the U.S. as large reserves in the Alaskan National Wildlife Refuge (ANWAR), along with additional untapped offshore reserves along the Pacific, Gulf and Atlantic coasts.
- There are potentially huge underwater reserves in the north polar regions of the world which is why nations that border the North Pole such as Canada, Denmark (through its connection with Greenland), Russia and Norway are scrambling to extend their borders to the North Pole itself.
- In the south polar region, all economic development in Anarctica is prohibited by international treaties, so we have no idea as to what potential oil reserves are there.
- There are also other untapped reserves and potential untapped reserves in other parts of the world.
While these reserves are plentiful they are more expensive to drill as the oil is not only deeper and and more spread out in these areas than the oil found in the Middle East (where there are large pools close to the surface) but it is also of a much lower grade which requires more expensive refining. Which is partially why Middle Eastern oil has been the oil of choice - despite OPEC, it costs less. The other reason is political constraints which limit or forbid production from these areas outside the Middle East which have large known oil deposits. Thus, thanks to political acts which place our own reserves off limits, we make ourselves dependent upon Middle Eastern oil and then complain about our dependence upon that area for oil. Compounding the problem further, our political leaders have decided to produce biofuels which, in the production process, requires the use of one gallon of oil produced energy to produce one gallon of biofuel. The net result is zero new energy at a huge cost to taxpayers. Thus, rather than importing oil from the Middle East and using it for energy purposes, we now import oil from the Middle East and consume it in the production of an equal amount of biofuel which we then use for regular energy consumption.
In addition to the exaggerated fear that nations in the Middle East will cut off our fuel supplies (thereby preventing us from producing biofuels as well as not having it for regular energy consumption), people are upset over the fact that large sums of money are flowing from the non-oil producing nations and into the coffers of the Middle Eastern oil producing nations. However, money by itself is basically useless as it cannot be eaten, worn as clothing or used as shelter. Instead, to be useful, money must be exchanged for other, more practical and useful, goods and services. Despite their attempts to diversify their economies, the economies of the oil producing states of the Middle East remain almost totally dependent upon the pumping and sale of oil in order to get the money to purchase the goods and services they need and these goods and services are purchased mostly from nations outside of the Middle Ease. Look at Iran, for instance, which is one of the larger oil producing states in the Middle East. They pump and sell large quantities of oil but, lacking refining capabilities, they are forced to sell the oil abroad and then use the money gained from the sale to purchase gasoline from the same countries they sold the oil to in the first place. The money flows in both directions and the oil producing states can no more afford to stop selling oil to the non-oil producing states than those states can afford to stop purchasing oil from the Middle East. If nations like the United States don't like the idea of seeing Middle Eastern nations make huge profits from selling oil to the United States, we can easily remedy that by exploiting our own oil reserves and give them some competition. Competition and an increase in the supply of oil on the market will not only force the price of oil down but weaken OPEC's ability to manipulate the price and quantity of oil.
Let the Market Decide the Role of Biofuels in the Economy
So the question is not whether we should sit around debating about whether we should have government, which got us into this mess in the first place, put more resources into food production or into biofuel production - instead we should get governments out of the economy and let the collective intelligence of the market decide these questions.
Biofuels may have a role as a future source of energy, however, they will never develop into an economical source of energy so long as governments subsidize their production since the guaranteed profits from such subsidies remove incentives for producers to find ways to reduce the price of such fuels by finding more efficient, and less costly ways of producing them. And, without the huge subsidies and forced purchases of biofuel by consumers, farmers will no longer have an incentive to convert their croplands away from growing food crops and into the production of biofuel crops.
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Comments
Chuck I am really concerned about the future food shortages that the USA and all other nations will be facing...I is all a huge lie to control us and is completely unnecessary. Food sources should not be used to replace energy sources. My squidoo lens The Energy Non-Crisis explains further. http://www.squidoo.com/the-energy-non-crisis
Chuck, what a great, informative hub. Since the capability of ethanol to burn as efficiently as gasoline is not a reality, the foolishness going on with this debate is just that. Bottom line is that it takes more ethanol to produce the same mileage as a lesser amout of gasoline since it burns at lower BTUs. This entire fuel/food crises is, as you say, a product of gross govt. negligence and political spin. It's really a catch 22, produce more ethanol, export less food, buy more oil, export more food. It's a circular argument with too many variables on the bubble.
Thumbs up! Great hub!
The rising cost of oil and food are the direct result of politicians and government.
Most often the use of the word "crises" is code for raising taxes. Government can call something a crises and with policies make sure that it is!
There is also a feeling that it is unfair that USA has so many resources and wealth. Thereby we should raise our misery index to make things more faiir!
My opinion!













mulder says:
2 years ago
Great question Chuck I really dont know Im afraid you need both I guess ?