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Oil & Gas Journal

Bob Tippee
Editor

Burning food for fuel is hurting hungry people.

This will surprise no one except, perhaps, politicians hawking biofuels. Some still think biofuels fight global warning and ensure energy security.

They're not just incorrect but also—in view of how their mistakes affect the impoverished—wrong.

"Poor people are suffering daily from the impact of high food prices, especially in urban areas and in low-income countries," said World Bank Group Pres. Robert B. Zoellick on Apr. 9.

He was commenting on a new World Bank study of the recent spurt in food prices and appealing for an international response.

"In some countries," he said, "hard-won gains in overcoming poverty may now be reversed."

The study says global wheat prices increased by 181% during the 36 months leading up to February. Overall global food prices were up 83%.

Increased biofuel production accounts for much of the increase, the study says. As though anticipating responses typical of biofuel fans, the study points out droughts in Australia and poor crops in Europe and Ukraine in 2006-07 were offset by good crops and increased exports elsewhere.

And only about 15% of the increase in food production prices, the study says, can be attributed directly to increased energy and fertilizer costs.

Relief will take a while.

"Food crop prices are expected to remain high in 2008 and 2009 and then begin to decline as supply and demand respond to high prices," the study says. "However, they are likely to remain well above the 2004 levels through 2015 for most food crops."

The World Bank study diplomatically points out that governments have been pushing biofuels out of concern about global warming and energy supply. It doesn't address the extent to which those supposed benefits have been oversold.

Its central message is that the biofuels surge is impeding the struggle against poverty.

Last year, an Organization for Economic Cooperation and Development "round table" challenged the environmental and supply extension claims made on behalf of biofuels (OGJ, Sept. 24, 2007, p. 17). It predicted the food-price jumps documented by the World Bank study.

When will the biofuels nonsense stop?

(Online Apr. 11, 2008; author's e-mail: bobt@ogjonline.com)