Gas pumps around Mississippihave recently begun to feature a new sticker, albeit one less shocking than the bottom line of your receipt. The state legislature recently rewrote the rules defining allowable gasoline mixtures, opening the door for producers to blend in up to 10 percent ethanol. While it's true that the use of ethanol could potentially reduce oil prices, bring us a step closer towards energy independence and provide a renewable energy source, corn-based ethanol has some important downsides to consider.
The recent spike in world food prices hasn't caused us too much headache in the United States,but the diversion of land resources from food production towards ethanol has had a global ripple effect. Agricuture Secretary Edward Schafer estimates that biofuel production is responsible for 2 to 3 percent of the global price hike, a negligible impact. The United Nations, however, sees a much greater danger.
Special rapporteur on the right to food Jean Ziegler believes the switch to biofuel could upset the global market, leading to starvation in poor countries. He has called for a five-year ban of the production of biofuels. A grain market tightened by ethanol production not only increases corn prices, but also those for cattle feed. Crops like peas and beans may also be affected as fields are converted to biofuel production.
The International Food Policy Research Institute estimates that biofuels could bump corn prices by 26 to 72 percent over the next dozen years, depending on how much biofuel expansion actually takes place. This year, nearly one-fifth of American's corn production will go towards ethanol, while population growth will require feeding approximately 70 million more people.
The U.S. Department of Agriculture estimates that biofuels are already reducing the demand for imported crude by a million barrels a day, and their impact on oil prices may be positive. But before you fill up with a tank of 10 percent ethanol, remember that short-term solutions to the energy problem may affect more than just the price of a fill-up. Clean your plate and drain your tank; there may be children going hungry on the other side of the planet.