November 23, 2006

High Yielding BIOstock of the Southern Hemisphere

Biopact is a developing consortium based in Brussels that is focused on the development of biorefineries in "the Southern Hemisphere" (mainly Africa). Their thesis is that environmental conditions exist in southern continents that are ideal for the cultivation of energy-rich feedstock for biorefineries. By harnessing this geographical advantage, developing nations there can build export industries while supplying local biofuel alternatives to increasingly expensive fossil fuels.

Two recent articles posted at Biopact's blog present their "Biofuels Manifesto" and provide a stinging comparison of Northern vs. Southern hemisphere biomass feedstock by an American professor familiar with policymaking in Washington, D.C. Here are some excerpts from each...

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A Biofuels Manifesto - why green fuels should be priority number one for developing countries

At this crucial time in history, developing nations can leapfrog away from the petroleum paradigm and the relations of inequality and dependence it creates, and into a sustainable, secure, autonomous and independent future. With a green development strategy they can reduce their economic, cultural and political dependence on the West.

Conventional wisdom has it that the developing countries will have to replicate the energy steps of the developed world... But what the conventional wisdom failed to foresee was that perhaps India and China would find an alternative pathway – one not based on fossil fuels and extreme dependence on oil imports, but on a different trajectory, namely one of energy independence and in particular independence from fossil fuels. Unlike Russia, which is playing strategic games with its vast oil and gas reserves, Brazil, India and China (the countries we can christen the ‘BICs’) are strategizing around how they can build energy independence through a variety of renewable fuels and energy sources – starting with liquid biofuels, since this is where their vulnerability to balance of payments disasters caused by rising oil import bills would be most pronounced.

John Mathews is professor of Strategic Management at the Graduate School of Management (Macquarie University). We present Mathews' 10 core arguments below. They can be seen as reference points in the great debate that is currently raging around bioenergy and biofuels. The arguments in favor of developing countries moving vigorously towards promotion of biofuels industries center around the following issues:
1. Energy security and the peaking of oil supplies globally;
2. Biofuels as tested substitutes for fossil fuels;
3. Abundance of land for producing energy crops in tropical countries;
4. Biofuels’ potential to reduce fuel import bills and fossil fuel dependence;
5. Biofuels production is a rural industry and can promote social inclusion;
6. Countries with even low levels of science and technology can get a start in biofuels, and they can create thereby a ‘development bloc’ that can drive industrial development;
7. Biofuels are greenhouse gas neutral and can earn countries carbon credits;
8. Developing countries can develop their own distinctive latecomer institutional innovations to capture benefits
9. Biofuels promote South-South cooperation; and
10. Biofuels represent simply the first step on a clean technology development trajectory

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From oil addicts to alcohol addicts: U.S. distorts the global biofuels market

In its report entitled, Should the Clean Air Act Be Used to Turn Petroleum Addicts Into Alcoholics? [*.pdf], lead author Professor Arnold W. Reitze makes an important contribution to the hotly contested debate over the disadvantages of biofuels produced in the Northern hemisphere.

It says that subsidies under the US Clean Air Act have made ethanol production immensely profitable in the US even though it is more costly and performs worse than gasoline. Moreover, it says subsidisation in the US has "distorted the market for renewable fuels".

Biofuels produced in the US (so-called "lobby fuels") are based on feedstocks such as corn (for ethanol) or soya (for biodiesel). The resulting fuels have a very weak energy balance (some have found them to have a negative balance, which means you put more energy into making the fuel, than you get out of it). They are also very expensive to produce and do not contribute in any significant way to the reduction of greenhouse gases.

In contrast, biofuels produced in the global South, based on high yielding feedstocks such as sugarcane, cassava or sorghum, have a very positive energy balance. They can be produced at a cost competitive with petroleum fuels and their use contributes significantly to the reduction in greenhouse gases. Biofuels made in the US must be heavily subsidized in order to survive. Tax payers in the US literally pay billions for uncompetitive fuels, while farmers in the South are kept outside of the market and in poverty because of US subsidies.

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I posted my own comments to the second article at Biopact. After reading the full article, I would be interested in any other responses.


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1 comment:

henriqueoliveira said...

As a Brazilian, I sometimes get a bit exasperated at the pace of the debate around biofuels. Claims are made every day in the English-speaking blogosphere that have been evident to the naked eye in Brazil for several decades, if not centuries.

The problem is, nobody bothers to look - and Brazilians are terrible at selling their country's products and services for the very simple reason that even highly-educated Brazilians couldn't speak English if their lives depended on it, although they learn the language for seven years (from the Fifth Grade until they graduate).

With biofuels in general, the ongoing debate about why, when, where, or how they should be produced seems terribly misguided. At the end of the day, there is really nothing wrong with this or that particular feedstock. If someone wants to make biofuels from roses in Greenland, by all means, put nothing in their way. Let them try.

Why not? After all, there is no process that the market won't fix - let people the world over produce whatever biofuel they want, and let the American (and European) consumer sort them out.

Sort them out they will. Just as Americans have come to avoid clothes made in Third World sweatshops, they won't buy biofuels that involved illegally-clearing forests and using child labor. It is a matter of pubic education, one which is taken up by any number of organizations the world over, private and public, for- and not-for-profit.

The problem is that there is currently NOT a market for biofuels in the U.S. and the E.U. As is the case with so many other issues, the biofuels debate is clouded over by powerful political money machines, machines that have been successful so far in maintaining a tariff against imported ethanol.

In the U.S., the Senate Finance Committee has the final say on such matters. Currently, its chairman is one Charles Grassley, a big-government, tax-and-spend Republican senator from Iowa.

So the crux of the problem actually has a name and a face: Grassley. Advocates of biofuels have to make it perfectly clear to Mr. Grassley's constituents what it is exactly that he is doing: while lobbying to make biofuels more expensive, Mr. Grassley claims to be advancing biofuels (by encouraging the development of corn fields, a quite ridiculous idea). How can Mr. Grassley get away with such claims? Because nobody challenges him.

The ten issues the BioFuels Manifesto mentions above would all play themselves out if only there were a market in place. Open markets with free trade - two revolutionary ideas worth fighting for.