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Valero CEO Says Corn Ethanol Will Cause More Misery Than Global Warming

Reuters. In a keynote address at the annual meeting of the National Petrochemical and Refiners Association, Valero Energy CEO Bill Kless said that using corn to produce ethanol will make food so expensive in poor countries that it will cause more misery than global warming.

...Klesse blasted US policy makers, the US Congress, the press and environmentalists for conducting a “serious attack” on the oil industry while ignoring problems associated with ethanol.

“Where is the investigation into corn prices and farm prices and land speculation? Of course, that would not be politically acceptable,” Klesse said, noting oil companies routinely face scrutiny when fuel prices rise.

Ethanol offers no net reductions in emissions once the effort to make it is considered, nor do ethanol backers acknowledge the impact of using corn to make fuel rather than for feeding a growing world population, Klesse argued.

Valero Energy Corporation is the largest refiner in North America, with a throughput capacity of approximately 3.1 million barrels per day.

Comments

Treehugger

Saddly he is right

DS

Bless his heart! CEO Bill Kless really does care for the hungry of the World.

sjc

Kind of what you would expect a refinery guy to say.

chokin

This guy sounds terrified of losing his monopoly. Hogwash.

Henrik

CEO Bill Kless is perfectly aware that the global corn ethanol production consumes less than 5% of global grin production and that this is far from enough to explain the rise of global grain prices of 300% in the past 3 years. He perfectly knows that the key reason for the increasing prices is the rapidly increasing demand for grain for animal feed to produce meat for the increasingly wealthier people in China and India. He could have made a speech with the theme “We face a challenge: How do we get from fossil to renewable energy in a profitable way”. Instead he chooses to use his keynote address to spread lies about a potential competitor to the fossil fuel industry. As if the oil industry has ever cared about the poor in the third world. What a jerk.

Jon

A few years ago everyone was complaining that the US was selling their corn for so little that developing nations could not compete. Now the same people are saying the same countries are all going to starve if we don't grow food for them. If places with large amounts of agricultural land (like the majority of countries in central Africa) would inprove their ag skills they could be the food giants that feed the world and not need handouts anymore.

GreyFlcn

Well, it's not really about "corn" persay.

It's about the scarcity of arable land, water, and fertilizer.

Henrik

I am sorry I made an error. I said grain prices have increased 300% in the past 3 years. This is not true. I meant 200%. For a source to confirm the 200% see http://commodities.thefinancials.com/

Herm

There is a demand for fuel and there is a demand for food.. whomever can pay the most will get it.. basic supply and demand economics.. CO2 causing global warming is poppycocks.

Harvey D

Treehugger:

I have to agree with you.

Corn ethanol is not a sustainable way to feed our gas guzzlers in the mid and long terms.

It may be more or less acceptable up to 5% or as long as we have surpluses, but it will have a snow ball effect on food price in many places. We are sending the wrong signals, i.e. we are willing to use food stocks to keep our inefficient ICE monsters on the road. What a way to make the rest of the world like us?

Of course, many will pretend that we could put many more million acres into corn production and satisfy 10% of the liquid fuel demand. What would be the total effect on the environment and food price?

There must be better ways. PHEVs + BEVs + biofuels produced with wastes and other non-food stocks would be more sustainable and less damaging. We have the technologies and the opportunity to be the world leader in this new economy. Why shall we miss the boat?

litesong

It is obvious that bio-fuels pit hungry engines directly against hungry people. It is obvious that full bellied bio-fuels advocates, instead of accepting the consequences of their acts, now wish to blame poor people...& they do.

It is well known that rich countries' economic policies whiplash the poor. Bio-fuels truly clarifies this truth.

Mark M

The price of food is tied to the price of fuel and energy, poor people everywhere will suffer until this gasoline monopoly is reduced.

Jane

I support homegrown biofuels as a replacement for imported oil. And I believe biofuels are more sustainable than petroleum based fuels. Guess what Valero. I just cancelled my Valero credit card.

DS

"It's about the scarcity of arable land, water, and fertilizer."
The first two are decreased directly by Global Warming.
How does Mr.Kless's product affect fertilizer you ask?
More Petrochemical for transport means higher prices for fertilizer. More Petrochemical for transport means more Global Warming, which means less arable land & water, which means more demand for fertilizer.
It appears that Mr.Kless has all his bases covered.

JoSmith

Food plus Fuel

Corn diverted to ethanol would otherwise be fed directly to livestock, not people. 3 out of 5 bushels of corn are fed to animals for the meat and dairy industry. Last year, the starch was removed from 1 out of 5 bushels of corn to make ethanol. And since cattle do not digest the starch, it would have gone to waste anyway. The other half of that one bushel produced high protein distillers grains livestock feed and corn oil. The byproducts of ethanol production are used to produce food. Corn ethanol equals Food plus Fuel.

There is a surplus of corn. Farmers would like to export more, but exports of corn are flat. The same amount was shipped in 2006 and 2007. However, exports of high protein distillers grains doubled during the same time period. Increasingly, distillers grains are being imported by foreign countries to fatten animals, as consumption of meat and dairy products in China and other foreign countries is on the rise. Does that sound like ethanol is causing starvation? Far from it.

ICRASAT, a research group of agricultural scientists in India have developed a variety of Sweet Super Sorghum that produces a phenomenal 44 tons per acre per year from 2-3 cuttings. The juice is squeezed to make ethanol; the tops produce grain for human consumption; the leaves are used for animal feed; and the stalks produce fiber and burn pellets. Again, Food plus Fuel.

In Vicksburg Arizona is a 2,700 acre dairy farm integrated with a state of the art dual fuel biorefinery, operated by XL Renewables. Corn is fractionated into 3 components. The starch is converted to ethanol. The oil is extracted from the corn germ and made into biodiesel. And the high protein distillers grains byproduct is fed to onsite dairy cows to produce milk. The CO2 is collected and sold for industrial use. Self-powered from adjacent dairy cow manure producing methane, this is a 10 to 1 efficiency plant, totally disconnected from the grid.

Biofuel critics make the mistake of lumping together all biofuels, which includes corn ethanol, sorghum ethanol, biodiesel, biogas methane, biocrude oil, cellulose ethanol, biobutanol, synthetic biofuels, and more. Lumping all forms of biofuels together and smearing them is ignorant and unscientific. Each type of biofuel has a very different set of parameters. You would need to do a case study on actual farms and biorefineries to be accurate. Furthermore, the biofuels industry is evolving and diligently reinventing. Sure, if you use old data, you can make ethanol look pretty bad, but corn and sorghum farming and ethanol production is much more efficient today than it was just three years ago. Today, the average return is over 2 to 1. And when a source of manure is used for production power, and distillers grains are consumed by nearby feedlots, the return can be much higher.

Its remarkable how many people make false claims about corn ethanol, without knowing what they are talking about. While one oil company embraces ethanol, another is afraid of losing its oil monopoly.

Ethanol plays an important role in waste disposal, and so does methane. The two fuels are becoming integrated. Manure, agricultural waste, organic garbage, and sewage, detrimental waste products that cost money to dispose of, are being converted into methane, from which power and ethanol are being produced. We are also making ethanol and biodiesel from Algae, grown on methane digester effluent waste. Farm manure that is left to rot or run off releases methane gas into the atmosphere, which is 22 times more potent than CO2 as a green house gas. Critics typically ignore the fact that biorefineries are mitigating this problem.

If people are starving, its because they live in countries with corrupt governments that are confiscating most of the food aide before it gets to the people. Food is also a control mechanism. When people are hungry, they will do anything to survive. Hunger is also caused by global organizations who have groomed poverty stricken countries to become dependant on outside sources of food, instead of helping them to grow their own and be self reliant.

If you are concerned about people starving, then you and your friends should skip a few meals now and then and send them overseas. Take a look around. There is no shortage of food. Two thirds of Americans are overweight. With the high price of oil, it’s the cost to ship the food to where its needed that is a cost constraint.

Instead of making false claims about biofuels, take a closer look at the amount of money Americans are blowing on two oil wars: One to control a new oil pipeline running though Afghanistan, which the U.S. bullied away from the Taliban. The other to restrict the flow of Iraqi oil down to half of what it was before the war. These two American wars caused crude oil to double, from $45 a barrel to over $100 a barrel, in just a few years. As a result, higher fuel and transportation costs have made everything more expensive, INCLUDING FOOD. Huge amounts of fuel are being consumed by the military, driving up the demand for oil and pushing fuel prices higher. Shipping surplus food now costs way more than it used to. If anyone is going hungry, blame Big Oil for manipulating supply and price, before you blame biofuels.

OPEN SOURCE, PUBLISH FREELY Anonymous

The basic staples like corn are ideall for feeding the poorer consumers in part because they are scalable, have good shelf life etc the very qualities that make them easy pickings for big biofuel.
The large numbers of economically and culturally dependant poorest at a relative disadvantage compared to resources defended by more economically powerfull interests.
It would seem that as a general principle food crops should not be under competition from biofuels on humanitarian grounds.
While "Alternate energy has always been understood to refer to non competitive sources.
These are the untill fully realized best thought as wastes, incl surplus or non competitave.

Treehugger

JoSmith

The point is if biofuel industry is making progress that's fine, but these progresses should be implemented before ramping up in volume production.

We are criticizing corn ethanol, not sweet shorgum ethanol so far, maybe sweet shorgum is a better choice than corn, but let's demonstrate and validate it before planting a million acres of it.

an EROI of 2 is still very low especially when you use Natural Gas to distillate ethanol. Natural Gas is so precious that it is a crime to bun it to make ethanol. Biofuels have interesting potential but the current corn ethanol policy is going to ruin it because it is badly conducted and then nobody will be willing to invest in biofuel anymore when it will become clear than corn ethanol is anti-economic.

I am no in faor of corn ethanol project but there is always positive sides in anything, the fact that it increases the price of food (which I agree with you is greatly exagerated) is not necessarily a bad thing since the price of agriculture commodities where too depreciated these 40 past years then discouraging people to even grow antyhting without governmental subsidies. As you mention it, the number of people overweighted is more than the peoples malnurished these days and corn syrup, as recently pointed out, is partly responsible of this, higher price of corn will mean less corn syrup in eveything which is a good news (I personaly hate sugar).

Also a lot of country like mexico, Iran, Egypt are more and more dependent of foreign grin imports, it is time for these country to tackle their problem of unsustainably growing population (which Iran and China do actueally) Fast increase in the price of food could send them the signal that it is really time for them to stop that trend and prompt serious birth control national program. At leas I hope.

Andrey

Jo:

Cattle DOES digest the starch, yet no so efficiently as pigs and chicken. Also it is better to feed cattle with balanced diet with high percent of fodder, not just pure grain.

Jonas

Biofuels will at last make much needed investments in African agriculture a reality.

That's why think tanks like the World Watch Institute say biofuels can help end hunger.

It's a counterintuitive idea, but one that most agriculture experts understand well.

sjc

I do not know if elephant grass is native to parts of Africa, but if you can get land that is good enough to grow it and it does not take much water nor fertilizer, I could see African nations becoming exporters of biofuels.

Remember, the island of Japan had very few natural resources and they built it to be one of the largest economies in the world. They had to import almost everything, but with value added supplying what the world markets wanted, they prevailed.

Steve-O

What a farce. An oil CEO spreading BS about ethanol. Surprise. Bye Bye oil monopoly here come biofuels. Bye bye corrupt oil industry executives and corrupt politicians accepting big money from the Saudis.

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