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Biofuels v. Oil -- The Case for Biofuels Just Keeps Getting Better

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In the world of oil and biofuels, it's never a dull day. Recent research confirms what biofuels advocates have been arguing all along: We need to account for the environmental cost of importing oil from the Persian Gulf; oil spills, explosions and fires are also taking a terrible human, financial and environmental toll; and biofuels aren't to blame for roller-coastering food prices. Three recent studies by researchers at the University of Nebraska, by the National Wildlife Federation (NWF) and by the World Bank, respectively, cast a sharp focus on all three issues.

Earlier this month, Environment magazine published a groundbreaking paper, Securing Foreign Oil: A Case for Including Military Operations in the Climate Change Impact of Fuels, authored by Adam J. Liska and Richard K. Perrin, professors at the University of Nebraska. The major finding of this impressive research: The military activities related to acquiring and protecting oil imports from the Middle East generate significant greenhouse gas emissions (GHG) that have, so far, been unaccounted for in fuel and climate regulations such as EPA's Renewable Fuels Standard and CARB's Low Carbon Fuels Standard. According to the authors, "...military activity to protect international oil trade is a direct production component for importing foreign oil--as necessary for imports as are pipelines and supertankers--and therefore the greenhouse gas emissions from that military activity are relevant to U.S. fuel policies related to climate change." Further, the authors correctly recognize that it is inaccurate and unfair to analyze GHG impacts of biofuels without considering similar impacts for oil. "The analysis presented here," the authors state, "suggests that GHG emissions from military activities should be included in the GHG intensity of gasoline, as the U.S. Environmental Protection Agency implements emissions requirements for biofuels relative to petroleum fuels."

Further highlighting the disastrous impact of our dependence on oil is a powerful report "Assault on America, A Decade of Petroleum Company Disaster, Pollution and Profit" from the NWF. Pointing to the fact that the BP Deepwater Horizon blowout is but one of many examples, the NWF argues, "Major oil spills are really only a small part of the real story. From 2000 to 2010, the oil and gas industry accounted for hundreds of deaths, explosions, fires, seeps and spills as well as habitat and wildlife destruction in the United States. These disasters demonstrate a pattern of feeding the addiction to oil leaving in their wake sacrifice zones that affect communities, local economies, and our landscapes." For anyone who doubts that our dependence on oil is preferable to expanding our production of biofuels, this report is both a wake-up call and a call to action.

And, in the "told you so" department, the World Bank, which just two years ago, through a leaked report, erroneously blamed biofuels for 75 percent of the increase in grain prices, sponsored a much more thorough study, "Placing the 2006/08 Commodity Price Boom into Perspective," which found that higher oil prices and commodity speculation had a much greater impact on food prices than biofuels. The study found "a stronger link between energy and non‐energy commodity prices is likely to have been the dominant influence on developments in commodity, and especially food, markets. Demand by developing countries is unlikely to have put additional pressure on the prices of food commodities, although it may have created such pressure indirectly through energy prices. We also conclude that the effect of biofuels on food prices has not been as large as originally thought, but that the use of commodities by investment funds may have been partly responsible for the 2007/08 spike."

In reversing course, this World Bank report reaffirms the marginal role biofuels play in world commodity and food prices. It is particularly important to note that ethanol production has continued to increase while corn prices have now returned to normal levels. Volatile oil prices, speculation and adverse weather conditions all played far more significant roles in driving commodity prices to record and near-record prices. This year, for example, drought conditions in Russia, Australia and Argentina and commodity speculation are driving up wheat prices.

The World Bank's report should silence critics in the food processing industry, the livestock industry, among some environmental groups aligned with these interests and others who portray ethanol as the bogeyman. With this phony food and fuel discussion put behind us and the true impacts of our addiction to oil coming to light, perhaps a real conversation about America's energy future can ensue.

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