Thursday, July 10, 2008

Turning perfectly good food into poor fuel has never made sense

Turning perfectly good food into poor fuel has never made sense to me. Now even the New York Times and other folks who consider themselves environmentally conscious are starting to wake up to that.

The mandates that motor fuel contain a certain percentage of ethanol, and the subsidies for ethanol production are causing a significant portion of U.S. and European food output to be diverted to production of ethanol (and other biofuels at much lower volumes) despite the fact that ethanol is both a poor fuel and more expensive to produce than gasoline.

That's not especially hurting most of us here in the U.S. and in Europe because the resulting rise in food cost is fairly trivial. So what if some food prices go up 70% (which is what the World Bank has estimated as the effect of the diversion of food crops to ethanol and other biofuel production). We're still going to buy the bread we need and the corn dogs we like.

Things are a bit different in the poorer countries of the world where a rise in the price of food can mean actually going to bed hungry or worse. So it's not surprising that there have been food riots in a lot of countries.

Similar problems will become apparent about wind power a few years down the road after there are a lot more windmills. Too lengthy to go into now but it comes down to the fact that the wind is variable and people want power continuously, so it's going to cost a lot (a very lot) of money to make wind power supply any substantial percentage of the national grid.

A smart fellow named T. Boone Pickens is now pushing wind power. Ten years of so from now they will be writing stories about how much money he (and others) made off the poorly thought out government programs and subsidies that are going to be rammed through. Other articles are going to be telling about how the wind farms are producing much less energy than was promised.
If wind power made economic sense T. Boone wouldn't have to sell it to us with slick advertisements - he would just build windmills with his own money and make a ton of profits. Instead he wants to build them with our money, but he will still be the one who makes a ton of profits.

Update 7/15: I see where Newsweek Magazine asked T. Boone Pickens why there are no windmills on his ranch. T. Boone said, "There are no turbines on my ranch, because I think they are ugly." You cannot make this stuff up.

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