US mayors avoid discussion
of negative effects of biofuels
By Tony Favro, US Editor

14 August 2007: Mayors in the United States are among the strongest supporters of the biofuel industry. Ethanol and biodiesel, the primary biofuels today, are made from plant matter instead of petroleum. They can be blended with or directly substituted for gasoline and diesel. While other alternative power sources such as hydrogen and fuel cells require research breakthroughs and major modifications to vehicles, biofuels offer an immediate solution to energy and environmental concerns.

US mayors view biofuels as a way to reduce dependence on foreign oil and improve environmental health at the local level by reducing air and water pollution. Biofuels are also considered a potential economic engine. There is virtually no discussion among US mayors, however, of the negative impact of US biofuel production on world food prices and the consequences for the urban poor and Third World mayors and cities. 

Mayoral leadership
Biofuel use is a question of “leadership and commitment,” according to San Francisco Mayor Gavin Newsome who recently announced that 100 per cent of his city’s fleet will be powered by biofuels by the end of 2008. “Every city bears responsibility for taking local action to address our global climate crisis, and vehicle emissions are a major source of greenhouse gasses,” explained Newsome.

Other US mayors share the sentiment. “My goal is to take the lead… on solutions that will protect our environment, create good jobs, and reduce the country’s dependence on foreign oil,” said Cincinnati Mayor Mark Mallory in proposing a biofuel initiative.

The leadership often extends from biofuels for city fleets to bioheat to mandates for entire cities.

Las Vegas, Honolulu, and Fort Wayne, Indiana, for example, are among several cities moving rapidly towards the exclusive use of biofuels in municipal vehicles and equipment. New York City Mayor Michael Bloomberg’s environmental initiative requires that one-third of the heating oil purchased by the City contain biofuel beginning in 2008. Portland, Oregon recently mandated that all diesel sold within city limits contain at least 5 percent biodiesel, and all gasoline contain at least 10 percent ethanol. “Biofuels simply make sense,” said Portland Commissioner Randy Leonard.

Economic activity
Biofuels also make economic sense to many mayors. At the end of 2006, there were 166 ethanol and biodiesel production facilities in operation in the US and 429 plants under development, according to the US Department of Energy. These projects represent US$77 billion in capital spending.

The growth is driven largely by federal policies. The 2007 federal budget includes $61 million for biofuel research programs, an increase of $38 million over 2006, and hundreds of millions of dollars in federal tax credits for the construction or expansion of biofuel manufacturing facilities. President Bush has set a production goal of 35 billion gallons of alternative fuels by 2017.

Biofuel manufacturing plants are frequently located on the outskirts of cities, equidistant from the agricultural areas that supply the raw materials and the urban consumers of the final products. For example, six new or proposed plants will surround Seattle, and three will ring Rochester, New York. At least a dozen plants are proposed for the Chicago region. In each area, hundreds of new jobs are projected.

Construction on a $60 million, 60-million-gallon-a-year biodiesel plant is expected to begin soon in the small city of Cairo, Illinois. As many as 100 temporary construction jobs and 30 permanent factory jobs will be created.

“It’s huge news for the city,” said Cairo Mayor Paul Ferris. “It’s been decades since there’s been any economic development here of this size at all. The town has been in need for years for employment opportunities.”

What is happening across the US, according State of Pennsylvania Environmental Protection Secretary Kathleen McGinty, is that “environmental protection is driving economic development.”

Food prices
Most biofuels in the US are made from grain, especially corn. Ethanol someday may be distilled from plant waste or switchgrass, and biodiesal from algae or mustard seed, but for the foreseeable future nearly all biofuel produced in the US will come from grain.

By the end of 2009, an estimated 30 per cent of the US grain harvest will become fuel for cars and trucks. According to Farm Industry News, US growers had to plant another 6.5 to 7.5 million acres of corn just to meet this year’s demand from biofuel producers. Good farm land in corn-growing regions of the US sells or rents for 50 per cent more than a few years ago.

Increased demand and higher production costs lead to rising prices. Commodity price increases are felt worldwide since the US accounts for 40 per cent of the global corn supply. World corn prices have doubled over the past year. As consumers search for alternatives to higher-price corn, and land that produced other crops is converted to corn production, the price of other food staples, especially grains, is also under pressure. Wheat futures are trading at their highest level in 10 years, and rice and soybean prices are rising rapidly.

As the Earth Policy Institute points out, the countries initially hit by rising food prices are those where corn is the staple. In Mexico, one of more than 20 countries with a corn-based diet, the price of tortillas is up 60 per cent. Other countries such as China and India rely on corn indirectly as fodder for animals and corn syrup to produce a variety of foods. Rising grain prices have driven overall food prices up over 11 per cent in India and 8 per cent in China over the past year. 

The Christian Science Monitor reports that worldwide food prices are up 21 per cent since 2005. The neediest nations requiring emergency food assistance are most vulnerable. Food aid programs generally have fixed annual budgets. If the price of food increases, the amount of food that can be purchased with the aid is reduced correspondingly. The United Nations reports that the number of hungry people in the world has begun to increase after decades of decline. Food riots have been reported this year in China, India, Mexico, and Zimbabwe, destabilizing local and regional governments.

In the United States, the prices of bread, eggs, chicken, and milk have increased 10 to 20 per cent in one year. A likely result is that those who cannot afford the price increases, often the urban poor, will switch to less-healthy foods with predictably-negative public health consequences. 

Unintended consequences
It seems clear that as US biofuel production increases so will food prices. Stability in the US fuel market may bring instability to the world food market. Unfortunately, the well-meaning goals of US mayors for energy independence and economic development may contribute to the hardship and even hunger of millions around the globe.