Another (unintended) Consequence of BP´s Oil Spill

British Petroleum’s recent oil spill in the Gulf of Mexico is expected to cause both immediate and prolonged environmental disaster as well as long-term economic distress in the Gulf region.

In the urgent short run: the corruption of beaches, the despoiling of fisheries and the pollution of wetlands demand concentrated and immediate attention.

The protracted effects of the spill, however, may be as diffuse and indefinite as the plume itself.

In a recent paper with Georgia Tech Industrial Engineering graduate student Dexin Luo and Professor Valerie Thomas, we found strong evidence of competition between the constituents of corn yield – corn for food, feed stocks, and export – and the production of corn based ethanol for fuel.[i]

This competition between corn yield for fuel and other uses has greatly strengthened – even as the overall corn harvest has increased over the past thirty years.

The Energy Independence and Security Act (EISA) of 2007 mandated an increase in ethanol production to 36 billion gallons per year by 2022.[ii] In 2009, the United States produced about 11 billion gallons of ethanol fuel – an increase of more than 6000 percent since 1980.

At the same time, the total U.S. corn production has (only) doubled. The environmental impacts of this mandate (net energy budget, effect on corn based commodities, greenhouse emissions, etc.) are unresolved, significant, and addressed (better) elsewhere.[iii]

This was the landscape prior to the Gulf disaster.

A recent Slate column illustrates how the oil spill offers an especially advantageous occasion for ethanol producers to position ethanol fuel as a desirable, “clean” alternative.[iv]

President Obama himself, in a recent speech at an ethanol plant, called for a tripling of U.S. biofuel production over the next 12 years.[v]

We might have expected losses of oil output from the recent disaster in the Gulf – direct losses from production and indirect increased costs – to place additional pressures upon the fuel supply. We would then expect, in ordinary political terrain, for these pressures to further exacerbate competition among corn for feed stocks, exports and food and corn to ethanol.

The current and future mise en scène, a direct result of the spectacle of BP’s oil spill, may foster a growth in ethanol production far beyond previous expectation.

It is debatable whether it is a good idea to treat fuel as fungible and to increase the replacement of oil with ethanol. This is a debate that must be engaged, especially in view of the spectre of the oil spill.

The effects of increased ethanol production – on the energy budget, on the production of greenhouse gas carbon dioxide, on land use change – have not been fully accounted for.

These inadequately measured, and higher order, effects are another (unintended) consequence of BP’s oil spill.

http://trueslant.com/kobiabayomi/2010/06/16/another-unintended-consequence-of-bps-oil-spill/

For more information about Biofuel Investments please visit www.sceptreinternational.com

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