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The ‘Food for Oil” Program, And It’s Consequences

The much talked about “oil for food’ program had it’s share of problems. Corruption, mostly. Not to be wondered at, give we’re dealing with the UN there. But apparently, trying to exchange food for oil isn’t much better, as James Joyner at OTB this morning, notes [1]:

The drastic rise in prices for corn, rice, and other staples that is wreaking havoc in parts of the developing world is due in large part to Western investment in biofuels, according to a recent report [2] of the World Bank.

World Bank President Bob Zoellick was on NPR [3] this morning talking about this.

Demand for ethanol and other biofuels is a “significant contributor” to soaring food prices around the world, World Bank President Robert Zoellick says. Droughts, financial market speculators and increased demand for food have also helped create “a perfect storm” that has boosted those prices, he says.

The soaring costs of food and fuel led to riots in Haiti and Egypt and a general strike in Burkina Faso this week. Skyrocketing food prices are topping the agenda this weekend of the World Bank and International Monetary Fund annual spring meetings in Washington.

Zoellick held up a bag of rice during a news conference Thursday to illustrate the severity of the food crisis. “In Bangladesh a two-kilogram bag of rice … now consumes about half of the daily income of a poor family,” he said. “The price of a loaf of bread … has more than doubled. Poor people in Yemen are now spending more than a quarter of their incomes just on bread.”

And Zoellick says prices for basic staples will remain high for an extended period of time. “I think you have a perfect storm of things coming together,” he tells NPR’s Steve Inskeep in an interview. “You have high energy prices. You have the increase in demand from some of the developing countries. … As the Indian commerce minister said to me, going from one meal a day to two meals a day for 300 million people increases demand a lot. “You have some of those countries moving to a different diet. So more meats require more grains. You have the biofuels expansion, which is a big source of demand.”

It has long struck me as wrongheaded, if not immoral, to take cheap, efficient sources of nutrition to turn them into expensive, inefficient fuels. A gallon of ethanol produces roughly two-thirds the energy of a gallon of gasoline and is far more expensive. And, while farmers and, especially, processors make more money by the increased demand for biofuels, it means that food is now out of reach for millions.

They’re called ‘alternative fuels’ for a reason, folks. They’re not ready for prime time, now, nor will they ever be, for the most part. They’re a nice to have, assuming there’s no colateral damage, but that’s all. And there has been, as James rightly points out, damage, already.

While there are alternative fuels, there’s very little available, particularly to the poor, in the way of alternative FOOD.

Wouldn’t we be better off talking the huge amounts of money we’ve been pouring into biofuels, and putting it elsewhere… meanwhile, removing the regulations on using what oil we have here in the States? We have enough oil, by many estimates, right here in the US, even assuming current use growth rates, to last 60 years… given the current drilling technology. It seems reasonable to assume that in the next 60 years, that technology will improve, and more oil will be found, which will extend that even further.

It’s time to admit it; The left has screwed us over for generations on the question of energy, and the environment. What shortages have occurred, and the price we’re paying at the pump now, is due to our own shortsightedness, in our refusal to use what resources we already have, in the name of ‘the environment’. It’s “for the kids”.

We’re all worried that our use of carbons will cause ‘global warming’. That myth has been disproven many times over. Moreover, the solution being presented by biofuels is no solution at all, but instead produces greenhouse gasses at a rate far higher than oil burning does. Meanwhile, the poor starve. Gee, guys, great solution you promoted.

The answers are simple: Domestic oil and Drilling. Including ANWR, and anywhere else it exists. Period. No holds barred.

And, of course added refining capacity with some diversity in the locations of thsoe reinding efforts. It’s never made much sense to have all our refining ability established in a region prone to hurricanes, where it can all be wiped out thus creating product shortages. Remove the governmental red tape to establishing new refineries.

I say it’s time.