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real effect of biofuels
naperlou   11/2/2012 11:01:55 AM
This is an interesting situation.  I really thought that the reason for the EU to limit biofuels was that there are food shortages from the drought in the US that have driven up the cost of basic foodstuffs.  The issue of using land that was not under cultivation is a really imprecise measure.  This happens in the realm of food production all the time depending on market conditions.  For example, in the US, peanut production was at an all time high this year.  The reason is two fold.  First, crops were down and prices up in the previous couple of years.  So, more land was put into cultivation.  There was also a very high yield becuase the regions where peanuts are grown had lots of rain this year.  In the EU, there are major distortions caused by the Common Agricultural Policy (CAP).  This has nothing to do with fuel production.  In the US we have our farm policy.  In both cases we have been paying farmers for years to not grow cash crops to keep prices to farmers up.  Now the market does that for us.

The alternatives are not all they are cracked up to be either.  Algae would have to cover a large area to be useful.  Are we ready for that?  In addition, do the crops get credit for the CO2 they absorb while they are growing?  This would be an interesting calculation.  I have seen oil refineries and I have seen ehtanol plants.  Is the CO2 from the oil refineries in the calculation?  What about the transport of oil around the globe.  Ethanol tends to be used near where it is distilled. 

Any real comparison should take into account the whole cycle of production, including the equipment.  I don't think we have seen that done for oil, or ethanol, in a comprehensive manner.

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