Biofuels: Friend of Foe

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Talk Given by Thawat Watanatada
TBLI Conference Asia 2008
Bangkok, Thailand
May 29 2008

Published in: Business, Technology
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Biofuels: Friend of Foe

  1. 1. Bi f l F i d or F ? Biofuels: Friend Foe? Thawat Watanatada A.T. Tri TBLI Conference Asia 2008 Bangkok, Thailand May 29, 2008 29, Photo credit: Alternative Fuels Institute May 29, 2008 29, 1
  2. 2. “Life first, cars second.” - Evo Morales, President of Bolivia Photo credit: The Guardian Photo credit: BBC News “Biofuels have made food too expensive for the poor.” - Alan Garcia, President of Peru , 2
  3. 3. “It’s in our national interest that our farmers grow energy ” energy. - George W. Bush, President of the United States Photo credit: US National Institute of Health “Bi f l aren’t the villain th t “Biofuels ’t th ill i that threaten food security.” - L l d Sil Lula de Silva, P id t of B il President f Brazil Photo credit: Spiegel 3
  4. 4. “Biofuels are the clean energy scam” “Is ethanol getting a bum rap?” Is rap? May 29, 2008 29, 4 4
  5. 5. “Biofuels p t t e 800 million peop e o ue s pit the o people with cars against the 800 million people with hunger problems.” - Lester Brown, Earth Policy Institute Photo credit: Time “Biofuels “Bi f l are a very, very smallll factor in rising food costs.” - David Morris, Institute f Local Self- for S f Reliance May 29, 2008 29, 5 5
  6. 6. The questions… Have biofuels really caused the food crisis? Should Sh ld we support bi f l ? biofuels? May 29, 2008 29, 6 6
  7. 7. Ethanol prices track oil prices Ethanol Price vs. Oil Price 120 2 100 USD pe r ba rre l oil USD p e r ga llon 1.5 80 e t ha nol 60 1 40 0.5 20 0 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 Year Oil (USD/barrel) Ethanol (USD/gallon) Data sources: US Department of Energy & North American Millers’ Association May 29, 2008 29, 7 7
  8. 8. Corn prices track ethanol prices Corn vs. Ethanol o o 250 2 1.8 200 1.6 USD pe r to n co rn USD pe r ga llo n 1.4 e th a no l 150 1.2 1 100 0.8 0.6 50 0.4 0.2 02 0 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 Year Corn (USD per ton) Ethanol (USD per gallon) Data sources: North American Millers’ Association & UN Food and Agricultural Organization May 29, 2008 29, 8 8
  9. 9. Sugar prices track ethanol prices Sugar vs. Ethanol g 16 2 14 USc pe r lb suga r 12 1.5 a n USD pe r ga llon 10 e tha no l 8 1 6 p 4 0.5 2 0 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 Year Sugar (USc per lb) Ethanol (USD per gallon) Data sources: North American Millers’ Association & UN Food and Agricultural Organization May 29, 2008 29, 9 9
  10. 10. Wheat prices track corn prices Wheat vs. Corn vs 400 250 350 USD per to w heat 200 300 USD per ton corn 250 150 on 200 t 150 100 100 50 U 50 0 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 Year Y Wheat (USD per ton) Corn (USD per ton) Data source: UN Food and Agricultural Organization May 29, 2008 29, 10 10
  11. 11. Chain of causes and effects Oil prices Biofuel prices Biofuel crop prices Food crop prices pp Food prices p The above explains why food crop and food prices have skyrocketed May 29, 2008 29, 11
  12. 12. Other causes of food price crisis ① Energy price hikes raising the costs of food inputs ② Greater demand for food in China and India ③ Shortage of land for food crops g p ④ Weather events causing temporary food shortages May 29, 2008 29, 12 12
  13. 13. Rising energy prices affect food costs Indirect effect of energy price rise via food feedstock is greater than direct effect. Data source: US Department of Agriculture May 29, 2008 29, 13 13
  14. 14. Rise in income in China and India Rise in income in China and India has a small effect, as Chinese and Indian meat and grain consumption is still small. Data source: US Department of Agriculture May 29, 2008 29, 14 14
  15. 15. Land Availability Case of Brazil: Ethanol production Less than ½ % of Brazil’s land for ethanol sugarcane Potential expansion of ethanol sugarcane area 34 times Data source: Uniao da Agroindustria Canavieira de Sao Paulo May 29, 2008 29, 15 15
  16. 16. Land Availability Case of Thailand: Ethanol production thru 2022 Graph of ethanol production volumes p p Million litres per day 10 8 6 4 2 0 M 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Year * Unpublished sources Molasses Cassava Sugarcane/Sweet sorghum Cellulose Marginal lands will be used to grow biofuel crops. May 29, 2008 29, 16 16
  17. 17. Land Availability Case of the USA: Ethanol production thru 2015 Target for 2015: 230% of 2007 level All increase from boosting corn yield per acre No reduction in corn for food and feed No increase in planted area p Data source: McKinsey & Company May 29, 2008 29, 17 17
  18. 18. Biofuels did not cause food crisis Biofuel price hikes is an economic fallout of oil price hikes Biofuels is not the original cause of food crisis g Real cause of food crisis: Sharp rise in petroleum price Photo credit: Spiegel Photo credit: CNN Photo credit: Time May 29, 2008 29, 18 18
  19. 19. Main benefits of biofuels Keep energy prices down Biofuels provide 50% of increase in non-OPEC oil supply Biofuel supply keeps crude oil price from rising by 15% Data source: International Energy Agency & The Wall Street Journal May 29, 2008 29, 19 19
  20. 20. Main benefits of biofuels Help H l small farmers ll f More income for 500 million smallholders Impact not immediate but enormous over time p May 29, 2008 29, 20 20 Photo credit: Telegraph, UK
  21. 21. How can we support biofuels? Grow biofuels without harming the environment or displacing food crop lands Commercialize second and third generation biofuels – from cellulose and algae May 29, 2008 29, 21 21
  22. 22. Second generation biofuels Cellulose biofuel technologies Can use agricultural residues or plants grown on marginal lands with few fertilizers or pesticides Emit less CO2 th fi t generation bi f l E it l than first ti biofuels Yield at least twice more energy per acre Commercial production in 5 to 10 years May 29, 2008 29, 22 Photo credit: Energy Future Coalition
  23. 23. Third generation biofuels Algae biofuel technologies: Can use algae species that grow in saltwater and other harsh conditions Yield 30 times more energy per acre than land plants Commercial production in 10 to 15 years? May 29, 2008 29, 23 23 Photo credit: Sheepscot Valley Conservation Association
  24. 24. Third generation biofuels g To replace all petroleum used in the US with algae fuel requires a l d area slightly l i land li htl larger th M l d than Maryland Map credit: Wikipedia Data source: US Department of Energy May 29, 2008 29, 24
  25. 25. Myth in the Media Biofuels Bi f l compete directly with f d f l d t di tl ith food for land We must choose between food and fuel May 29, 2008 29, 25 25
  26. 26. Reality If oil prices remain high ….. Farmers will keep growing biofuel crops Biofuels ill be here t stay Bi f l will b h to t May 29, 2008 29, 26 26
  27. 27. Ways to deal with biofuels ① End subsidies and tariffs that support inferior biofuels ① Stop deforestation and employ marginal lands ① Practice precision farming and promote biodiversity ② Adopt high yield biofuel technologies May 29, 2008 29, 27 27
  28. 28. Think Food and Fuel May 29, 2008 29, 28 28
  29. 29. Thank you! May 29, 2008 29, 29

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