Biofuels Driving Up Food Prices

[ewv 0]

As for the original rationale for the Iraq war, it is pretty clear that Bush came to office in 2001 desiring the opportunity to start a war with Iraq... The Bush administration was clearly, rightfully annoyed with the Oil for Food (Fraud) program that benefitted French and German oil companies (why they didn't point this out back in 2003 is beyond me) at the expense of American oil companies. I think it is clear that Iraq's oil fields were certainly an important part of the war. Remember that "shock and awe" was intended to ensure that Saddam didn't have sufficient time to set fire to the oil fields like he did in 1991. Iraqi oil revenue was supposed to be used to reimburse the US for the cost of the war. It doesn't require much of a stretch to go from "reimbursement" to spreading favors to politically-connected oil companies. Of course, things didn't work out that way because of the bungled post-war strategy, but that's a different story.

These are more left wing kook conspiracy theories without foundation. There is no evidence that Bush came into office wanting to start a war with Iraq or anyone else. There are no Bush conspiracies on behalf of "big oil". The Bush administration did not attempt to use the "Iraqi peoples' oil" as compensation. He should have but did not.

Anyway, this thread is about biofuels. It is clear that Bush has been a leading proponent of developing biofuel capacity. It's also clear that biofuels aren't viable short or medium term replacements for more than a small fraction of our current oil consumption.

Bush is not a "leading proponent of biofuels". They go along with so-called "alternative energy sources" politically correct to viros. The biofuels scam is only one part of that.

[Thales 0]

The war was over terrorism. This was the stated purpose. Anyway, your whole take is very statist in nature. No government is supposed to develop any energy source. They are supposed to uphold individual rights and that's it. After that people are free to do what they want.

That may have been the stated purpose, but as you may have gathered, I'm skeptical that it was the primary reason. The war in Afghanistan was about terrorism, but since the connections between al-Qaeda and Saddam were always tenuous at best (and weren't part of the initial justification), it seems obvious that it was, at best, a convenient excuse to start a war.

Al Qaeda was not the only target. Bush made it clear that he was going after terrorists as such, not just Al Qaeda. Remember, Americans had been attacked and killed by more than Al Qaeda. Al Qaeda was the straw that broke the camel’s back. This is another annoying aspect of the left, they never seem to grasp that point.

To be sure, Iraq was not a good choice as a primary target, but Hussein was a terrorist and he had connections to other terrorists, so it was logical to go after him on those grounds. His far bigger mistake was not naming the enemy: Islamo-fascism. The first lesson of war: know who your enemy is.

Don't let your preconceived notions cloud your assessment of my comments. The reason I'm looking at Iraq and Bush's energy policies from a statist perspective isn't that I'm a statist (I'm not), but that it's clear that Bush is. I'd have expected a statist with oil connections to use the mechanisms of the state to advance projects beneficial to the oil industry.

He didn't, so how does that fit your preconceived notions? What it tells me is that I'm right, he did go after Saddam because of terrorism. Bush is not a dishonest person. He's not like your typical liberal politician. He's screwed up ideologically, but he is honest.

That's why I'm surprised shale has gotten comparative short shrift in the Bush administration. Bush has gone around extolling the virtues of corn-based ethanol (which has few, if any virtues), and hasn't done so with shale. That's what I find surprising.

He buys into environmentalism. He believes it will reduce use of oil and lower greenhouse gas emissions. So, it doesn’t surprise me.

Btw, another point, even though I think that government funding for ethanol is a bad idea, the fact that food prices are being driven up should be a short term effect until supply catches up with demand. That's the way a free (or semi-free) market works.

[RickWilmes 0]

It looks like the Europeans are starting to smell the burnt popcorn.

Europeans backpedal on switch to biofuels

"When we will look back we will say this was the beginning of a turning point for Europe on biofuels," said Juan Delgado, a research fellow specializing in energy and climate change at Breugel, a research organization in Brussels. "It will be very difficult now for Europe to stick by its targets."

In the United States, one-quarter of the corn crop is going to biofuels. An energy bill passed last year requires that 36 billion gallons of biofuels be produced annually by 2022, but criticism of the policy is growing, including calls to end tax breaks for corn-based ethanol.

A major reason is that in the past 18 months, studies have shown that the generation of biofuels -- reliant on food crops such as canola, corn and soybeans -- helps drive up food prices and promotes deforestation, and may be worse for the climate than conventional oil when the costs of production and transport are taken into account.

Most of the world's biofuel is extracted from corn in the United States, sugar in Brazil, and both grain and oil-seed crops in Europe.

Europe's reversal on biofuels has gained significant momentum in recent days. Last weekend, energy ministers gave one of their strongest signs that EU governments were prepared to back away from the 10 percent target. "We have to decide if the quota can be kept," Jochen Homann, the German economics minister, said Saturday in Paris. "It might be changed."

Britain, one of the biggest proponents of increased biofuel use, signaled a new course on Monday. Ruth Kelly, the British transport minister, said the introduction of biofuels should be slowed down, citing a newly released report warning that current targets for biofuel production could cause a global rise in greenhouse gas emissions and an increase in poverty in the poorest countries.

(Bold is mine.)

[RickWilmes 0]

Does anybody have any sources for existing books that cover that history?

The following books and article may be of interest.

Easy Minus West = Zero, is one of the books in the Recommended Bibliography from Capitalism: The Unknown Ideal.

Russia also owed to the West the exploitation of its most valuable raw material: oil.

Some time after 1870, huge wooden structures began to rise towards the sky where the spurs of the Caucasus mountains fall away to the Caspian Sea. Where Marco Polo en route to China has seen the field of 'flames which are never quenched', at Baku, a group of Swedes directed and administered the first exploitation of the oilfields. The Nobel brothers, and particularly Ludwig, produced capital, machines and technicians. They sank borings and brought into being the Baku oilfields, then the most modern in the entire world. The shores of the Caspian almost belonged to the "Nobel Brothers Naphtha Company'.

Before the arrival of the Nobel brothers, conditions were extremely backward on the Apsheron peninsula. All the oil wells combined had a yearly output of a mere eight thousand tons of petroleum, which was transported in the most primitive Asiatic manner, using skin bags or wooden barrels, loaded on a two-wheeled cart or arba.

All this was changed by the Nobel brothers, and Alexander II sent Professor Mendeleyev to America in 1876 to 'collect ideas' concerning the vast oilfields of Pennsylvania which had been producing since 1859. The Nobels built the first pipeline on Russian soil, a pipe some seven miles long.

Alfred Nobel, the inventor of dynamite and founder of the Nobel Prize, developed a new method for the continuous distillation of oil. His brothers, Robert and Ludwig, had iron 'tanker wagons' built for transport of the oil by rail, and the first iron-built tanker, the Zoroaster, for sea-borne transport.

In 1886 another very large foreign company was floated, under the auspices of the Paris banking house of Rothschild, "The Caspian Black Sea Industrial and Trading Company'. Just as naphtha production had become a major technical industry thanks to Nobel, so the Russian naphtha industry was now developed into an international export trade by Rothschild's. Dr Ischchanian says: 'A historian, writing of production and trade development within the oil industry on the Apsheron peninsula, can correctly describe these two European companies as the "apostles of the Russian naphtha industry".'

There is overwhelming statistical evidence of what the foreigners achieved here. In 1860 the United States produced 70,000 tons of petroleum, the Russians a mere 1,300 tons: twenty-five years later the total production of the United States was 3.12 million tons, while that of Russia was already 2 million tons and in 1901 Russian production was 12.17 million tons, which exceeded the American total of 9.92 million tons. Russia, in fact, had jumped to first place among the oil-producing countries of the world.

Accepting in good faith the 'guarantees' given by the Russian government, Western Europe now invested more and more capital in the country. In 1887 France raised a sum of 500 million francs for Russia, and further large loans followed in 1889 and 1891, liberally subscribed to by the French public.

Millions were also invested by Belgium, England, and Germany. In 1900 half of the enormous capital of all the Russian joint stock companies came from Europe, a fortune which the Soviets wiped out with one stroke of the pen in 1917. (East Minus West = Zero, p. 178-180)

The following quotes are from a chapter titled, China's Energy Strategy toward the Middle East: Saudi Arabia,(p. 143 -161) in China's Energy Strategy: The Impact on Beijing's Maritime Policies, which is a book recently published by The Naval Institute Press.

CHINA BECAME A NET IMPORTER OF OIL IN 1993, an event which had a dramatic impact on the country's autarkic model. Forced to look outside its borders for its most strategic commodity, China naturally turned its attention to the largest holders of hydrocarbon reserves in the world, namely the Middle East Gulf states. In doing so, it quickly ran up against the fact that the United States has long maintained a strategic interest in the region and, in the aftermath of the Gulf War, positioned significant armed forces there. Beyond the U.S. presence, Chinese planners were also concerned with the fact that the region as a whole has always been one of the most volatile areas in the world, especially over the last century. Given these factors, the Chinese looked elsewhere initially for their oil, starting with Sudan and Southeast Asia. Over time, however, the scale of China's import requirements have forced it back to the Middle East, and projected future oil demand will bring ever-increasing Chinese(and, indeed, global) reliance on the Gulf producers. While Chinese deals in Iran have dominated headlines, the more critical relationship over the long term will be the one emerging between Saudi Arabia and China. Intersecting strategic interests between the two countries have markedly changed their level of energy interdependence and will continue to do so for the foreseeable future. Recent actions include extensive Chinese investment in Saudi energy infrastructure; substantial Saudi investment in Chinese refineries, possibly including partial Saudi ownership of China's Strategic Petroleum Reserve; guaranteed Saudi oil exports to China of 1 million barrels per day by 2010(double 2006 levels); and Chinese participation in a limited opening of the Saudi gas sector.(p. 143-144)

China has realized that merely trading with a country is not enough to secure goodwill in the long run, and that a deeper, multifaceted and nuanced strategy needs to be employed to be moved to the front of the line for favored projects. In fact, by now almost all of the Gulf countries have entered into similar, multitiered bilateral agreements with China. (p. 148)

Although a very recent entrant on the international oil scene, at least from a corporate perspective, China has made substantial strides in securing fields and production rights and is beginning to undertake larger and more complex projects. In less than ten years, Chinese companies have managed to secure fields in Sudan, Iran, Saudi Arabia, Kuwait, Iraq, and Kazakhstan, to name but a few areas. The crucial point to note here is that China has been able to secure these deals despite its lack of world-class technical expertise primarily by leveraging two approaches(often in concert): offering extremely favorable contract terms and utilizing "soft power" and arms sales linkages.(p.151)

Managing China-U.S. Energy Compettion in the Middle East, covers some of the same ground discussed in China's Energy Strategy toward the Middle East: Saudi Arabia (p. 143 -161)