Tuesday, February 28, 2006
What's Wrong with Free Trade in Biofuels?
"Fantasies of self-sufficiency won't fly -- there's not enough crop land in the U.S. to replace imported oil with ethanol. At best, ethanol can be an additional source of fuel supply, contributing to a strategy of diversifying our supply base to soften the possibility of price shocks.
But this runs straight into the clout of the farm lobby. Brazil has already established itself a low-cost producer of cane-based ethanol churned out in large volume at the oil-equivalent price of $25 a barrel without any heroic biogenetics involved. Its example is already inspiring copycat behavior by other Latin, Caribbean, African and South Asian countries, with similar conditions that make them potentially prolific exporters of biofuels.
Unfortunately, against the danger that poor countries might find profitable new niches for themselves as energy producers, rich countries have been busy erecting trade barriers to kill off the incipient competition to their own farmers. The U.S. imposes a 54-cent-a-gallon tariff on Brazilian ethanol, to discourage competition with domestic ethanol, which receives a 54-cent subsidy from taxpayers. The European Union just slapped new duties on Pakistani ethanol.
This should lay bare the fraud that what's going here has anything to do with energy security. It has only to do with the agricultural lobby masquerading its interests behind foolish and misleading rhetoric about energy security."
But this runs straight into the clout of the farm lobby. Brazil has already established itself a low-cost producer of cane-based ethanol churned out in large volume at the oil-equivalent price of $25 a barrel without any heroic biogenetics involved. Its example is already inspiring copycat behavior by other Latin, Caribbean, African and South Asian countries, with similar conditions that make them potentially prolific exporters of biofuels.
Unfortunately, against the danger that poor countries might find profitable new niches for themselves as energy producers, rich countries have been busy erecting trade barriers to kill off the incipient competition to their own farmers. The U.S. imposes a 54-cent-a-gallon tariff on Brazilian ethanol, to discourage competition with domestic ethanol, which receives a 54-cent subsidy from taxpayers. The European Union just slapped new duties on Pakistani ethanol.
This should lay bare the fraud that what's going here has anything to do with energy security. It has only to do with the agricultural lobby masquerading its interests behind foolish and misleading rhetoric about energy security."
