The unintended consequences of the ethanol quick fix
The push to increase ethanol production and ease dependence on oil has created a price runup in fuel and food prices.
Grand Rapids, Mich. — Ronald Reagan once said that the most terrifying words in the English language are, "I'm from the government and I'm here to help." His one-liner immediately comes to mind when looking at the problems behind the federal government's campaign to boost production of corn-based ethanol with a massive 51-cent-per-gallon subsidy.
Ethanol and other biofuels are advertised as one of the main cures for our oil-thirsty economy. But it's clear that the ethanol boom, with a major assist from Washington, is succeeding in simultaneously raising both fuel and food prices.
With more than 20 percent of corn now dedicated to ethanol production, the US Department of Agriculture is projecting a record US corn crop in 2007 – along with record prices.
Outside the United States, the unintended consequences of ill-considered policies promoting ethanol and other biofuel crops are already in full view. The poor, of course, are hit hardest.
In Mexico, where corn is a staple, rapidly rising prices for tortillas have sparked open revolt. Tortilla prices skyrocketed more than threefold last year. Protesters took to the streets in Mexico City, compelling the normally free market-minded President Felipe Calderón to cap prices at 78 cents per kilogram.
Religious leaders are speaking out. In March, Roman Catholic bishops in Brazil warned that a rapid increase in ethanol production based on sugar cane could lead to widespread deforestation, massive relocation of workers and their communities, and harsh working conditions for cane cutters.
Analysts predict that Brazil, the world's largest exporter of ethanol, may increase ethanol production as much as 40 percent in the next four years. "We are going to turn the country into a huge cane [plantation]," said Cardinal Geraldo Majella Agnelo.
In Colombia, Christian aid organizations say armed groups are driving peasants off their lands to make way for plantations of palm oil, another biofuel. Acreage dedicated to production of the palm oil tree has more than doubled in the past four years.
Religious leaders who are demanding action on global warming may soon be demanding action on some of the quick fixes put in place in the name of "renewable" energy sources such as ethanol.
I attended an evangelical Wesleyan seminary where the global-warming scare rapidly gained exposure in chapel and in the classrooms. Consumerism – exemplified by profligate energy use – is considered one of the greatest sins of the West by many religious leaders.
One professor declared the polar bears were groaning with creation (a reference to Romans 8:22) because of the melting ice caps. Several professors admonished US dependence on oil and called for repentance. Now that Big Oil has been demonized in many seminaries, can Big Corn be far behind?
Religious leaders should be thinking about the economic impact of ethanol, which goes far beyond the price of tor-tillas. Ethanol is expensive to produce, has contributed to a rise in gasoline prices, and has its own pollution problems. It requires a lot of fertilizer, fresh water, and farm land. And, because of corrosive properties that make pipeline transportation problematic, it takes a lot of trucks to haul it.
Americans may have been able to afford their corn on the cob for this year's Fourth of July celebration, but price increases are more noticeable for a wide array of foods. That's because of the widespread use of corn products in US food, less land for other crops due to an increased need for cornfields, and the higher cost of corn feed for livestock.
In the first quarter of this year, food prices rose at an annualized rate of 7.1 percent, according to the Bureau of Labor Statistics. Think of it as a regressive tax on the consumer.
Today's religious leaders would do well to look to the example of their forebears. John Wesley, the 18th-century Anglican minister who founded Methodism, was a man of practicality who published articles, tips, and advice for helping the poor reduce costs. Wesley's ministry reached out especially to the kind of poor and marginalized who were hit extremely hard by rising food costs.
It's hard to imagine that Wesley would side with the unintended consequences of environmental quick fixes and against the poor and needy of the world – especially when the quick fixes are so impractical or destructive.
Ray Nothstine is associate editor at the Acton Institute for the Study of Religion and Liberty in Grand Rapids, Mich.