Solutions that turn into disasters
By
Lorenzo Gonzalo Read Spanish Version
The
production of ethanol as a substitute for gasoline continues to be a
delicate subject. Recently, we learned of a substantial reduction in
U.S. foreign aid because of the high cost of corn. The price of this
product has risen from $1.60 per 35 liters in 2005 to $3.27 per 35
liters.
The
magnitude of such a horrendous aberration has been slightly mitigated
by a drop in the price of ethanol, from $2.00 to $1.55 in the same
time period.
The
reduction is due mainly to two factors. One is the lack of
infrastructure to carry the finished product to the East coast of the
United States, because of the lack of storage. The other factor is
the enormous increase in its production by the distilleries that were
immediately set up. This has overtaken demand and reduced the prices.
The
offensive by the Bush administration to substitute oil with other
sources of energy triggered an ethanol fever among investors. This
created something that is typical in unregulated markets: a reduction
in price, to a level below production costs.
Of
course, the Bush offensive is a clear signal that he doesn’t care
whether the replacement of oil by ethanol means an increase in hunger
among the 880 million people who do not eat every day and those who
would join them, if the trend continues.
All this
came up when Congress in 2005 established that the fuel consumed by
2012 should contain a mixture of 7.5 billion gallons of ethanol,
compared with the 3.5 billion gallons consumed in 2004. To the
producers, that’s not a problem, because they expect to produce 11.5
billion gallons by 2009.
In any
case, because ethanol is very corrosive, it cannot be carried by the
conduits that exist in this country. The manufacturers have resorted
to trains and tank trucks, which are not enough, even though the
railroad cars have increased from 10,000 in 2005 to 36,166 in 2007.
Although
this apparently cannot last for many more years, the immediate harm
to hungry people and low-income people will be devastating, according
to the experts.
Ethanol
can be produced in the U.S. only from corn, which is very expensive.
Besides, ethanol production immediately affects the price of such a
basic food product and the price of other foods linked to the
production of corn.
Producing
ethanol from sugar cane is cheaper and might be less harmful to the
food chain, but that would require policies that forbid the clearing
of land that produces vegetables, in order to replace the vegetables
with sugar cane.
Other
sources are also being investigated: the human urinary tract, a
mushroom found in Russia, certain hemipterous insects produced by
genetical engineering, chaff, agave, and many others.
But this
happens while U.S. food aid dropped from 5 million metric tons in
2000 to 2.4 million metric tons at present. This means a 50-percent
increase in the prices of foods like soy, corn, wheat and others.
On the
basis of those numbers, we can deduce that the people who depend on
miserly earnings have been geometrically affected.
Ethanol,
fuels in general, medicines, basic services and others can be great
remedies for mankind if they are managed socially, but they can also
cause great discord and disaster if they are cast into the blind game
of the market. Managed this way, they are good solutions turned into
disasters.
