Biofuel vs Food

[TOM4CWB]

WD9,

I see on DTN that the Warren Staley, chief executive of Cargill Inc., speaking at the Society of American Business Editors and Writers.

Staley told them that even if 100% of US corn production was used to produce Ethanol, only 20% of US motor fuel could be replaced. He noted that sugar cane is the principal source for ethanol in other nations. Grain Biofuel is much more sensitive lower oil prices... when those occur.

"If it's ethanol and biodiesel, we have to look at the hierarchy of value for agriculture land use: food first, then feed and last fuel," Staley said.

"We need to be clear about what interests are driving renewable fuels -- is it farm policy? Energy policy? Environmental policy? Rural development policy?," Staley said. "How do we get a thoughtful discussion of these choices, so that we end up both with the right policy choices and investor confidence in those choices?"

Obviously we need a Canadian biofuel strategy that is balanced.

It would be a waste if we invest $billions only to have $30-40/barrel oil wipe out our biofuel industry.

What is our contingency plan for this problem?

[sawfly]

yes your right a contgency plan would be in order.
it shouldnt be a problem, as their is something in biofuel for everyone.
farmers get markets and hopefully price. rural areas get development.
consumers get supply options and enviromentel benifits.
you will need leglislated % use of biofuels and a mechanism to make sure $ make it back to the farm.
a run up in grain prices (i wish) and a tumble in oil prices could wipe out the whole industry, and youd be back to square one.
As much as those on the right hate govt. intervention this is the place for it. a sensible plan to smooth out the yo yo effects of an open market.

[wd9]

A B2 blend costs nothing. Yup, nothing. No sulfur emissions due to the extra lubricity and elimination of acid rain, less CO2, better mileage, easier on the environment for all the other reasons. It is a win for all sectors including the public and environment, but do we need to compete head on with oil? Don't know, but there should still be at least a B2 in the fuel for it's benefits. In Canada that is still 700 million litres of BD. I sure don't see BD or ethanol replacing hydrocarbon fuels, but if efficiencies, and who knows what some genius will come up with, of 1000% come along, requirements of fuel would change dramatically.

A lot of articles seem to challenge the notion of replacing all the fuel with biofuel and prices like above, but the reality is in Canada, it hasn't even started. One step at a time I guess.

Not that this isn't a question on everybody's mind - fuel vs food and who will make the decision some day of legislating production for food as opposed to burning for energy? When that day comes, I would sure like to be a farmer having a product everyone wants.

[charliep]

Canada still exports over 50 % of the crops grown so a more active bio fuels industry just means more grains/oilseeds used at home versus shipped off shore.

This will create more opportunities for other countries to replace Canadian supplies in export markets. An example would be the Ukraine where production could likely over double with the right mixture of government policy, sources of farm credit and access to technology.

Just of interest, spent the last two weeks in the Ukraine on a project with a side assignment to find out their plans for ****seed/bio diesel for the European market. The question is definitely being asked there but the uptake to date/switch to ****seed is slow. Mainly has to do with cultivation and seeding technology. Still plow in many cases and traditional cultivators in all others along with old style seed drills (and I mean old as in 1960's technology). Low disturbance/minimum tillage seeding is being talked about but between not believing/no money, not much being done. Mainly winter canola and most farmers still see this as a higher production risk crop relative to alternatives. Having said that, the extension agents I was working with talked about a farmer in the west with access to technology/financing for inputs that was achieving 70 to 80 bushels/acres.

[TOM4CWB]

Charlie,

Good to hear from you!

I believe we need to have good CDN public policy that will assist a biofuel blueprint for the next 25 years.

[TOM4CWB]

A couple of remarks....couldn't agree more that we need a good public policy on bioenergy. As usual the pols are way behind the learning curve and still think that biofuels are small potatoes and not a growing future industry. I wonder if the true start of biofuels is going to come from government however. I am aware of one MB farmer who is presently burning biodiesel that he is making on farm. A little internet research and a few grand buys you a canola press and all the supplies to maek biodisel in your shop during the winter. NOt sure about warranties on engines etc, though. So maybe the adoption of biofuels will begin at the bottom rather than the top.

Tom, don't know if we have to worry about 30-40 dollar a barrel oil wiping out a biofuel industry. Any situation that I can think of that would cause the price of oil to drop by that type of margin would bring about much more devastating effects than simply the disruption of biofuel industry. Oil is based on supply and demand, supply at this point is basically fixed. No new deposits of meaningful size are presently available and even what Alberta and Alaska, if allowed, could produce would not be enough to demostrably shift the supply curve. I know people say these are huge deposits but when you look at the size of world demand they jsut are not enough to make a difference. On the demand side if demand for petro products, gas, oil, plastic, etc fell by the amount required to force oil to 30-40 dollars a barrel the state of the entire economy would be more of a concern than one industry. The point I am making is that high energy costs are here to stay and we need to learn to deal with it. Adopting an alternative fuels strategy in Canada is one way to do that and reduce our costs of production at the same time.

[TOM4CWB]

A couple of remarks....couldn't agree more that we need a good public policy on bioenergy. As usual the pols are way behind the learning curve and still think that biofuels are small potatoes and not a growing future industry. I wonder if the true start of biofuels is going to come from government however. I am aware of one MB farmer who is presently burning biodiesel that he is making on farm. A little internet research and a few grand buys you a canola press and all the supplies to maek biodisel in your shop during the winter. NOt sure about warranties on engines etc, though. So maybe the adoption of biofuels will begin at the bottom rather than the top.

Tom, don't know if we have to worry about 30-40 dollar a barrel oil wiping out a biofuel industry. Any situation that I can think of that would cause the price of oil to drop by that type of margin would bring about much more devastating effects than simply the disruption of biofuel industry. Oil is based on supply and demand, supply at this point is basically fixed. No new deposits of meaningful size are presently available and even what Alberta and Alaska, if allowed, could produce would not be enough to demostrably shift the supply curve. I know people say these are huge deposits but when you look at the size of world demand they jsut are not enough to make a difference. On the demand side if demand for petro products, gas, oil, plastic, etc fell by the amount required to force oil to 30-40 dollars a barrel the state of the entire economy would be more of a concern than one industry. The point I am making is that high energy costs are here to stay and we need to learn to deal with it. Adopting an alternative fuels strategy in Canada is one way to do that and reduce our costs of production at the same time.

[MBFarmer1]

A couple of remarks....couldn't agree more that we need a good public policy on bioenergy. As usual the pols are way behind the learning curve and still think that biofuels are small potatoes and not a growing future industry. I wonder if the true start of biofuels is going to come from government however. I am aware of one MB farmer who is presently burning biodiesel that he is making on farm. A little internet research and a few grand buys you a canola press and all the supplies to maek biodisel in your shop during the winter. NOt sure about warranties on engines etc, though. So maybe the adoption of biofuels will begin at the bottom rather than the top.

Tom, don't know if we have to worry about 30-40 dollar a barrel oil wiping out a biofuel industry. Any situation that I can think of that would cause the price of oil to drop by that type of margin would bring about much more devastating effects than simply the disruption of biofuel industry. Oil is based on supply and demand, supply at this point is basically fixed. No new deposits of meaningful size are presently available and even what Alberta and Alaska, if allowed, could produce would not be enough to demostrably shift the supply curve. I know people say these are huge deposits but when you look at the size of world demand they jsut are not enough to make a difference. On the demand side if demand for petro products, gas, oil, plastic, etc fell by the amount required to force oil to 30-40 dollars a barrel the state of the entire economy would be more of a concern than one industry. The point I am making is that high energy costs are here to stay and we need to learn to deal with it. Adopting an alternative fuels strategy in Canada is one way to do that and reduce our costs of production at the same time.