Paul Walker on food prices

July 25th, 2008 at 2:00 pm by David Farrar

Paul Walker takes a long hard look at the causes of global food inflation. He looks at the three theories:

  1. Newspapers have cited an internal World Bank document as having found that 75% of the price increase was due to
  2. Several governments and commentators see speculation as a major driving force.
  3. Widely held view has it that rapidly growing food demand in the emerging economies is pushing up global .

So how does theory 2 hold up:

Yet, there is no hard evidence that “speculation” has added much to the price increase on spot markets. After all, it is only when “speculators” actually buy produce on the spot market that they can drive up the price, and this would have to be reflected in growing stock levels – but stocks appear to have declined throughout the period of rising prices

So how about theory 3 – blame China and India:

Food demand in China, India, and other emerging economies is rising as their incomes grow. However, domestic food production in most of these countries is growing in parallel. China, for example, has been a consistent and growing net exporter of cereals (including rice). The Agricultural Outlook expects China’s net cereals exports to decline only very gradually in the coming decade. For India, the picture is similar, though there was significant variability in its net trade position in the past. In short, growing food demand in the major emerging countries cannot be held responsible for the rise in world market prices for cereals.

So that leaves theory 1 – biofuels:

The use of agricultural products, in particular maize, wheat, and vegetable oil, as feedstock for biofuel production has expanded dramatically in recent years. Between 2005 and 2007, i.e. in the period when food prices began to explode, nearly 60% of the growth in global consumption of cereals and vegetable oils was due to biofuels. Global output of cereals and vegetable oil did not decline during that period, but just grew slower than the rapid expansion of use.

In a situation of depleted stocks and very low demand and supply elasticities, this gap between use and output growth has pushed prices up very strongly.

And the conclusion:

Thus we find that there cannot be much in the way of doubt that biofuels are a significant factor in the rise of worldwide food prices. Add to this the fact that other research suggests that biofuel support policies are disappointingly ineffective on environmental grounds, then it should be clear that governments need to reconsider their support for biofuels. But many governments, including New Zealand’s, seem to want to push ahead with such policies despite the kind of evidence Tangermann brings to bear on the issue.

, quoted by Walker, is Director of Trade and Agriculture for the .

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39 Responses to “Paul Walker on food prices”

  1. Kimble (4,440 comments) says:

    Supports the anecdotal evidence I have been hearing for a while. 60% of the growth in demand is an interesting stat. So theoretically, if bio-fuels were never invented there would be 60% less “new” demand than is the case right now?

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  2. JC (958 comments) says:

    Three things.. the unintended consequences of a political programme to make oil a major villain in the supposed AGW process, laws made to require a rising proportion of fuel be biofuel, and the subsidies to make production of biofuels attractive.

    Add in a heaping dose of stupidity and a green mantra that we must reduce world population to 1 billion to support Gaia and you have a developed world that really doesn’t care if the world’s poor dies of starvation.

    JC

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  3. stephen (4,063 comments) says:

    What if bio-fuels were economical thanks to a genuinely free market? At some time in the next year or so, they could well be. Would everyone still be objecting to ‘taking food out of people’s mouths’?

    Odd that Tangermann doesn’t mention the US subsidies etc in that last paragraph…just lil old NZ.

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  4. pete (416 comments) says:

    Biofuels can be made from food grown directly for that purpose, or they can be made from waste products.

    Subsidising the former is obviously a really bad idea, but setting up a market for the latter is a completely different policy.

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  5. Redbaiter (13,197 comments) says:

    Food prices are just one part of the equation. The idiotic policies of the enviromarxists are going to have tremendous cost impact on every facet of life. Soon, your average weekly wage will be worthless. The left only know how to do one thing well, and that is destroy living standards.

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  6. RRM (9,933 comments) says:

    The left only know how to do one thing well, and today that’s: Make generalizations.

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  7. Redbaiter (13,197 comments) says:

    “The left only know how to do one thing well, and today that’s: Make generalizations.”

    No, the knuckle dragging psychotics of the left know how to do other things, they just don’t do them as well. Stalking other posters with meaningless and off topic crap they mistake for wit for example.

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  8. toad (3,674 comments) says:

    What’s having the impact on food prices is the fact that oil demand is exceeding supply, and short-sighted Governments have seen growing biofuels on land that is suitable for food production as a way of responding to this.

    Ours would have too, if the Greens had not been able to stop them.

    The impact of oil prices on the cost of fertilisers used in conventional farming is another factor, of course. The cost of organic produce (although still usually higher than conventional, because organics is labour intensive) is not increasing as quickly as that of produce from conventional farming.

    C’mon Redbaiter – waiting for your meaningless, unresearched and/or abusive response, as usual.

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  9. stephen (4,063 comments) says:

    “C’mon Redbaiter – waiting for your meaningless, unresearched and/or abusive response, as usual.”

    Beat it you idiotic half educated moron, i’ve had enough of your psychotic rambling crap.

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  10. Redbaiter (13,197 comments) says:

    “What’s having the impact on food prices is the fact that oil demand is exceeding supply”

    Even if that were true, even blind and stupid Freddie and his three legged dog could see that the reason there is any short supply of oil is down to the dumbfuck policies of the enviromarxists.

    “C’mon Redbaiter – waiting for your meaningless, unresearched and/or abusive response, as usual.”

    Always eager to please, that’s me.

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  11. toad (3,674 comments) says:

    No, Redbaiter – it is because there is only a finite amount of oil, and when you’ve found and extracted the oil that’s easy to get, which we largely have, that which remains becomes harder to find and extract – and therefore more expensive. It’s got nothing to do with environmental policies – just the economic principles of supply and demand.

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  12. PaulL (5,987 comments) says:

    toad, so far as I can tell the Greens haven’t stopped them. They have written into the legislation an unenforceable hope that there won’t be substitution of food into bio fuels, but I haven’t yet heard of any mechanism that is capable of verifying that. In short, it won’t work, and you are deluding yourself so you can feel good.

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  13. Redbaiter (13,197 comments) says:

    “No, Redbaiter – it is because there is only a finite amount of oil, ”

    So why are oil prices falling right now?

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  14. Dr Robotnik (533 comments) says:

    Did they find some more behind the sofa?

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  15. toad (3,674 comments) says:

    Redbaiter asked: So why are oil prices falling right now?

    Not sure I want to get into this. At the risk of provoking Owen and the other AGW deniers, this question is like asking “Well, if global warming is for real, how come it’s been so cold over the last couple of months?”

    Of course there are other factors that will cause short-term fluctuations, but it is the long-term trend that is important.

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  16. dave strings (608 comments) says:

    >
    >>
    What’s having the impact on food prices is the fact that oil demand is exceeding supply
    >
    It is interesting that the Saudis, who have some particular political challenges vis-a-vis the American block, have said that there is no shortage of supply, and that they would lift production if there was. America’s oil stocks haven’t taken a beating, nor (as far as I can find,) have anyone else’s.
    I’m afraid this postulation doesn’t hold water dear Lisa dear Lisa.

    There have been enough protests about the pollution of cities and people’s lungs from oil burning combustion engines, that alternatives that pollute even more, but don’t consume Nasty Horrible Oilses, have been identified, and in many countries accepted politically, as acceptable alternatives.

    It is interesting that over 25 years ago Brazil decided it couldn’t afford to buy oil, and so started growing sugar caner specifically for converstion to ethanol for the exclusive use of those internal combustion engines. By the time they’s finished, there’s no waste product and the cost is acceptable. Now if only we could be as innovative (NUMBER 8 FENCE WIRE ANYONE?)

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  17. unaha-closp (1,165 comments) says:

    So why are oil prices falling right now?

    Because the Western World is entering a recession so consuming less and at the same time production is increasing for the first time in 5 years.

    The US Commodities and Futures Trading Commission has just issued a report, has pretty graphs which you can skim or in depth summaries.

    http://www.cftc.gov/stellent/groups/public/@newsroom/documents/file/itfinterimreportoncrudeoil0708.pdf

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  18. Redbaiter (13,197 comments) says:

    “Not sure I want to get into this.”

    Of course not. Wouldn’t want the reality (that bullshit about polar bears (for example) keeps millions of acres of reserves locked away) to intrude on your sad little enviromarxist delusions. Wouldn’t want the reality (that if you took the tax that you commies steal from the production of oil out of the equation oil would be cheap) to intrude on your pathetic self serving efforts at enviromarxist propaganda. Wouldn’t want the reality (that greens and leftists have as much idea about economics as they do about any form of politics outside the big government over-regulated paradigm that is all they can ever see) foul up their plans for a totalitarian leftist enviromarxist utopia.

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  19. unaha-closp (1,165 comments) says:

    It is interesting that the Saudis, who have some particular political challenges vis-a-vis the American block, have said that there is no shortage of supply, and that they would lift production if there was. America’s oil stocks haven’t taken a beating, nor (as far as I can find,) have anyone else’s.
    I’m afraid this postulation doesn’t hold water dear Lisa dear Lisa.

    Huh? If there were an insatiable demand for a company’s product the last thing I’d expect to see would be its stock price taking a beating.

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  20. insider (1,028 comments) says:

    Toad

    Bollox. The biofuels mandate was specifically targeted at a level that required and was based on the promise to govt that corn based ethanol could be grown on pasture land in the Waikato. The greens supported both the mandate and its level right up to the select committee.

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  21. toad (3,674 comments) says:

    Insider – you are the one talking bollox.

    Here is an extract from Jeanette Fitzsimons First Reading speech on the Biofuel Bill – at the first opportunity and before it was even referred to Select Committee:

    The biofuel with the worst press — and deservedly so, and the previous speaker referred to it as well — is ethanol from corn. In the United States Government subsidies encourage diversion of corn from food markets to fuel and the high price of petroleum with which it competes has encouraged a large increase in corn growing and has just about dried up US exports of corn for food. The price of tortillas in Mexico has doubled as a result and a source of food grains for Africa has virtually gone.

    Some say that raising the price of corn will help struggling farmers in developing countries, but the simple fact is that the poor in those countries cannot buy food at that price. Worse, high corn prices for fuel are international so the market will divert corn grown in developing countries into exports for fuel production in the West, perhaps making a few farmers in those countries a bit richer, but starving many more of their people.

    It is clear that your assertion is not supported by what Jeanette actually said, at the first opportunity, on the Biofuel Bill.

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  22. PhilBest (5,125 comments) says:

    The whole “biofuels” scandal is slowly gaining traction ON THE LEFT because they have started to realise that they can BLAME it all on poor old GEORGE W. BUSH……..again………

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  23. PaulL (5,987 comments) says:

    unaha-closp: I think he meant stocks in the sense of “strategic reserves” – so oil on hand – not in the sense of sharemarket. That makes sense – everyone goes on about speculation driving up the cost, but that can only happen if speculators are buying physical product and stockpiling it. If every barrel of oil extracted from the ground is getting delivered to someone and made into refined product, and stockpiles are neither growing nor shrinking significantly, then pure supply and demand must be driving the price. Because all the oil is being bought by end consumers at the market price point.

    Some notes though:
    1. Oil consumption is inelastic in the short term – so just because every barrel of oil is consumed at present doesn’t mean that will continue. Despite the fear mongering to the contrary, oil consumption is actually falling in every western country – oil demand is actually elastic over the medium term – 3-5 years. That’s how long it takes to buy a smaller car, insulate your house a bit better etc. All logical market-based reactions to an increased price.

    2. Many third world countries don’t have a market price for oil. Their consumption continues to rise irrespective of global price, because they subsidise the oil inside their own country. Indonesia and China are good examples. It is costing them a fortune, and they are working towards getting rid of the subsidies, as they do this it will start to restrict their growth in demand (but the continued process of them getting wealthier will probably still result in increased consumption, even if consumption per unit output declines)

    3. The Chinese have actually been increasing stockpiles of certain fuels ahead of the olympics – particularly of diesel, which they will use to run their (normally coal fired) power stations so as to reduce pollution. Once this is over the diesel price should fall again.

    4. Refining capacity is the major bottleneck in the process at present – and the nimby brigade make it likely that this will continue. There is a quite large margin between raw and refined costs – and I think owning a refinery is a license to print money at the moment. Unless somebody starts giving licenses to build more of the things, this will continue. It’d be nice if the Aussies started giving licenses to build some of them in the middle of that large red area that nobody goes into – the bit that you could build 100 refineries in with nobody noticing – but i don’t see it happening soon.

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  24. PhilBest (5,125 comments) says:

    The Truth about Oil
    By Vasko Kohlmayer
    FrontPageMagazine.com | Thursday, May 08, 2008

    “A recent survey on the environment found that seventy percent of people worldwide think that the planet is running out of oil. Only less than one quarter believe that there is enough of it to keep it as a primary source of energy. Petro pessimism runs especially high in the United States where a full two thirds think that the point of depletion is within sight.

    Here are some hard facts.

    According the Energy Information Administration as of January 2007 there was more than 1.3 trillion barrels of proved crude oil on earth. Even if this were all the oil on the planet there would be no immediate danger of shortages, because at the current rate of consumption – roughly 85 million barrels a day – this supply would last for more than 40 years.

    But the 1.3 trillion in these so-called proved reserves refers only to a tiny fraction of earth’s oil, designating only that portion which can be extracted under current ‘economic and operating conditions.’ As it happens, this figure grows with each decade and usually dramatically so.

    In 1882, for instance, there were 95 million barrels of proved petroleum reserves. This number jumped to 4.5 billion in 1926 and then to 10 billion in 1932. In 1944 the quantity stood at 20 billion. In 1950 it leaped to 100 billion and in 1980 it was 648 billion. In 1993 the world’s proved reserves grew to 999 billion, and today they stand at 1.3 trillion barrels.

    These figures show that our ever-increasing consumption has not over the years reduced the pool of available oil. In fact, the exact opposite is the case – each successive year we have more of it than ever before. Contrary to the conventional wisdom, mankind’s oil supplies are not getting depleted, but they keep continually expanding.

    There are several reasons for this. New exploration and advancements in surveying techniques in particular result in fresh finds almost every year.

    We have seen a dramatic instance of this at the end of last year when a massive reservoir was discovered in the Tupi sector off the coast of Brazil. Estimated to hold some 8 billion barrels of recoverable crude it was the second largest find in the last 20 years. Two months later an even greater deposit was located nearby which may hold as much as 30 billion barrels. If confirmed, the field would be the third biggest on the planet, behind only the Ghawar in Saudi Arabia and the Burgan in Kuwait. Many scientists are now convinced that intense exploration fuelled by high prices will yield comparable discoveries in other places of the globe.

    Adding appreciably to the proved reserves is the continual perfecting of drilling techniques. This makes it possible to tap deposits which because of their depth or geological environment were off limits only a few years ago. Today’s equipment can perform mind-boggling feats of horizontal drilling and there are oil rigs capable of reaching 35,000 feet under the surface, about double of what the previous generation could do.

    Rising prices also make available oil which was previously considered unrecoverable commercially, because for whatever reason the extraction cost per barrel exceeded the price it could fetch on the market. With every jump in price, however, more and more of such oil is brought up as its production becomes profitable.

    Finally, improvements in extraction processes make it possible to more fully utilize currently harvested reservoirs. Due to technical and economic limitations, normally only a portion of an oilfield can be recovered (it is this part that is referred to as the ‘proved’ reserve). A few decades ago the average oil recovery rate from reservoirs was 20%, but thanks to technological progress this rate is nearing 40% today.

    It is the combination of these factors that accounts for the fact that more and more is added every year to mankind’s stock of crude oil. This in turn results in a seemingly paradoxical outcome. Even as our consumption increases with each passing year, the projected depletion point keeps moving further out into the future.

    In 1986, for instance, it was estimated that the world’s proved reserves would last 38 years. On that estimate we should only have 17 years worth of oil left. But because the figure in the ‘proved reserves’ column keeps getting larger, we now have more than 40 years.

    This dynamic has been in place ever since gasoline began to be mass consumed. Due to the continuing exploration and technological advancement, we can be virtually assured that two or three decades from now we will be talking about another 40 or 50 or more years worth of crude. Cambridge Energy Research Associates, one of the world’s premier energy advisors, predicts that earth’s proved reserves could increase by as much as 25% by 2015.

    But there is more to the story. So far we have only been considering crude oil, but crude is not the sole source of this strategic commodity. There are far greater amounts of it locked in other materials such as shale, coal and tar sands.

    Proven technologies exist to obtain oil from these resources but they have not yet been widely exploited, because until quite recently the extraction costs – ranging from $40 to $90 per barrel – exceeded the market price. The currently high and rising prices, however, are quickly turning these methods into potentially profitable ventures.

    With many companies positioning themselves to take advantage of the opportunity, we are witnessing the birth of a giant industry and one that might eventually eclipse that in crude oil. This is because the estimated global deposits of recoverable shale oil alone exceed three trillion barrels. This is more than twice the world’s current crude oil reserves.

    America is especially well endowed on this front as it has nearly 75% of the planet’s known oil shale deposits. The Bureau of Land Management estimates that the Green River Formation of Colorado, Utah and Wyoming alone ‘holds the equivalent of 800 billion barrels of recoverable oil.’ This is three times the proved oil reserves of Saudi Arabia. At current consumption levels, that quantity would satisfy America’s needs for 110 years.

    Like shale, coal is another enormous repository of oil. Technology to liquidify it has been around since the 1920s. Germany was the first country to utilize it on a mass scale when during World War II it sought to compensate for a lack of crude. Today this technology is successfully exploited by South Africa whose three liqudification plants produce150,000 barrels a day, the equivalent of the output from a medium-sized oilfield.

    The United States – with roughly 27 per cent of the world’s recoverable coal – is especially well positioned to benefit from this resource. A couple of years ago, the New York Times pointed out that ‘the coal in the ground in Illinois alone has more energy than all the oil in Saudi Arabia.’ It is estimated that at a standard conversion rate of two barrels of synthetic fuels from one ton of coal, America’s reserves are equivalent to 20 times the nation’s proved crude. In other words, liquefied coal could satiate America’s petrol thirst for two hundred years.

    But even coal’s potential is exceeded by that of tar sands which may hold as much as two thirds of the planet’s petroleum. Tar sands occur in many parts of the world with large deposits in Canada, Venezuela, the United States, Russia and various countries of the Middle East. Canada alone is estimated to have some 1.7 trillion barrels of which about 10% is recoverable at today’s prices and with existing technology. The country’s tar sands alone make Canada second only to Saudi Arabia as an oil resource country.

    Tar sands account for one million barrels (about 40%) of Canada’s oil production with the number growing each year. America’s largest oil supplier, Canada provides about 20% of our imports of which a substantial portion comes from this untraditional source. So vast is its potential that a CBS broadcast stated ‘the reserves [of tar sands] are so vast in the province of Alberta that they will help solve America’s energy needs for the next century.’

    With estimated 30 billion barrels of recoverable petroleum from tar sands, America’s own supplies are not negligible either. A concentrated effort to launch wide scale commercial mining was launched in the late 70s, but the subsequent drop in oil prices led to the project’s abandonment. The $100 plus per barrel rate, however, is likely to change this situation in not-too-distant future.

    All this should make one thing amply clear – there is enough oil to go around for a very long time. Even on conservative assumptions – accelerating consumption and few new discoveries – earth’s oil supplies should last for at least a century.

    This, however, is the worst case scenario. We can be reasonably certain that new exploration and advancing technologies will in coming years greatly add to the quantities of available oil. So much so that Morris Adelman, Professor Emeritus in Economics at Harvard, has argued that the ‘amount of oil available to the market over the next 25 to 50 years is for all intents and purposes infinite.’

    The notion that this planet is running out of oil is one of the great misnomers of our age. There is more oil available today than there was a hundred, fifty or ten years ago. And there is every indication that this trend will continue into the future. Instead of lamenting that we are running out of it, it would be far more accurate to say that we are constantly bumping into new oil. This is why two years ago the Economist headlined an article on the topic The Bottomless Beer Mug.
    The general public, however, is largely ignorant of these facts. The divergence between the conventional wisdom and reality could hardly be any wider. Profoundly misinformed and alarmed, people place false hopes in misguided alternatives. Rather than implementing harmful, inefficient and expensive substitutes, we should insist that our government lift the obstacles which prevent us from availing ourselves of this superabundant resource.”

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  25. PhilBest (5,125 comments) says:

    From Coal to Fuel
    By Vasko Kohlmayer
    FrontPageMagazine.com | Wednesday, June 18, 2008

    “Apart from engendering economic turmoil and worries of many kinds, the skyrocketing price of oil has also done something momentously beneficial: It has created conditions for America’s oil independence by making it economical to extract fuels from coal, our most abundant energy resource.

    A sedimentary rock, coal is primarily made up of carbon. Carbon most commonly occurs in stable compounds but when combined with hydrogen it forms volatile substances known as hydrocarbons. Of those, crude oil is the most useful, because when refined it yields flammable fluids such as diesel and gasoline which are used in combustion engines.

    As demand for oil began to rise early in the 20th century, scientists became intrigued with the possibility of converting carbon-rich coal into hydrocarbon liquids as a potential replacement for petroleum-derived fuels. Franz Fischer and Hans Tropsch, two German scientists, accomplished the feat in the 1920s. Named after its inventors, the Fischer-Tropsch method is a multistage process during which coal is transformed – through gasification and liquefaction – into synthetic diesel and jet grade kerosene.

    The method’s practical viability was first seriously tested in the 1940s. Lacking adequate access to oilfields during World War II, Germany built twenty-five coal-to-liquid plants to boost its fuel supplies. The enterprise proved a success and by 1944 the plants were discharging 144,000 barrels of synthetic fuels a day, enough to cover half of the country’s wartime needs.

    Some two decades later, South Africa began using the same technology to soften the hardships of its Apartheid isolation. It proved so successful that the program was continued even after the embargo was no longer an issue. Today almost all diesel engines on South Africa’s roads are powered by synthetic coal fuel.

    But even after Germany and South Africa demonstrated its efficiency and reliability, the coal-to-fuel technology failed to find wider use. The reason was cost.

    Historically the cost of producing a gallon of synthetic fuel has been higher than what it could fetch on the market. Conversion only becomes profitable when crude passes $55 a barrel, because at that price diesel and kerosene begin to sell for more than what it costs to obtain them from coal.

    Since until quite recently the price of oil was below that mark, coal-to-fuel conversion was not commercially viable. This is the reason why it was only done in countries that – for one reason or another – lacked adequate access to petroleum-based products.

    The roof-shattering march of crude, however, has changed this situation. At today’s prices, conversion would be not only economically practical, but also decidedly profitable. The combination of current market conditions and long-term outlook thus creates a powerful incentive for the private sector to channel money, capital and entrepreneurial energy into the coal liquefaction enterprise.

    This should be great news for the United States which with nearly 270 billion tons of recoverable coal leads the world in reserves. To put it in perspective, U.S. coal deposits contain more energy than that of all the planet’s oil reserves put together. So vast is their potential that at a standard conversion rate of two barrels of liquids per one metric ton of coal, America’s fuel needs would be taken care of for well over a century.

    This in effect means that as long as the price of crude oil remains above $55 a barrel – and there is every reason to believe it will – America can enjoy fuel self-sufficiency for as long as the eye can see.

    It is important to grasp the full import of this: Unlike all the other ideas and proposals for achieving oil independence, coal conversion represents no false hope or wishful thinking but an eminently feasible and realistic possibility.

    No new inventions, no technological breakthroughs, no extensive infrastructure modifications, no lengthy testing, no public investment or government incentives are required to make it happen. Everything is already in place to bring it about:

    1. America possesses abundant supplies of coal
    2. Proven technology exists to convert coal into fuel
    3. Market conditions make conversion commercially practical

    While the first two conditions have been true for a long time, the third did not come into play until last year. With the rise in price, however, all the necessary prerequisites for America’s fuel self-sufficiency have been met. All that needs to be done is to remove any artificially imposed impediments that may stand in the way. Most of them are in the form of environmental rules and regulations which make energy production such a difficult and problematic enterprise in this country.

    As far as the environment is concerned, coal conversion and its derivatives are cleaner than their crude oil counterparts. There is technology to capture the CO2 released during the liquefaction process and the resulting diesel and kerosene have lower sulfur content than those refined in the conventional way. As a result, during the combustion process they release fewer particulates and less nitrogen oxide then their petroleum cousins. Such, in fact, is their purity that they are often referred to as ultra-clean fuels. This should go a long way toward assuaging environmental concerns.

    The rising energy prices have made it possible for America to commercially utilize its enormous coal reserves and to become fuel independent in the process. The only thing required at this point is for government not to interfere with market forces which inexorably incline toward this outcome.”

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  26. PhilBest (5,125 comments) says:

    Would all the scare-mongering Greenies get back under your rocks, please?

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  27. PhilBest (5,125 comments) says:

    Back to the topic of Biofuels and food prices, not for nothing is there a book (by Paul Driessen) called: “Eco-imperialism: Green Power, Black Death”. This latest (which is too recent for the Driessen book) is just the latest in a long line of Green initiatives which have led to large-scale death and misery in the third world.

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  28. Redbaiter (13,197 comments) says:

    “Would all the scare-mongering Greenies get back under your rocks, please?”

    Rational people with a sense of shame might retire gracefully, but not these deceitful amoral propagandizing zealots.

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  29. ghostwhowalks2 (118 comments) says:

    Thats not what some reports say

    The report, obtained last week by the Guardian, tracked staple foods on a month-by-month basis since 2002. Their prices rose by 140 percent, of which 75 percent is directly attributed to demand for biofuels and speculation on crops and cropland.

    75%……biofuels and speculation on crops and cropland.

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  30. PaulL (5,987 comments) says:

    PhilBest: there are a set of standard arguments to this, and I expect that someone will come and put them up. I tend to agree with you – we are nowhere near peak oil. To some extent I agree with Phil the “oh so superior” that, given a finite amount of oil on earth, and a growing consumption rate, logically we will reach peak oil one day. To deny that is to deny a fact. But I don’t see any evidence that we are anywhere near it, that it will impact any of us alive today, or that the amount of oil is a limit on our civilisation – I suspect we’ll stop using oil for other reasons long before we run out, whatever definition we may use for that.

    It doesn’t address the carbon question. As always I remain a bit of a skeptic, but it does seem to me that we warmed quite significantly in the late 20th century, to an exceptionally warm year in 1998. We haven’t since had a year warmer than 1998, but we do continue to be warmer than the average for 1980-1990, so there is certainly no argument as yet that we are cooling. The next few years will tell us for sure what is happening, I suspect in the mean-time that many countries will take steps to reduce carbon emissions.

    If these steps are in any way effective (many current policies look like they will only advantage vested interests, but have little impact on carbon emissions) then that would reduce oil consumption. Perhaps someone will make the investment to mass produce nuclear power stations, at which point they will be significantly cheaper and less polluting that just about any other form of energy, and they might live up to the promise they once had. Or perhaps someone will perfect both a solar panel that is cheap enough to roll out over your entire roof, and a storage mechanism that makes it practical to store enough power to run your house at night and on cloudy days. Or perhaps someone will find a way to make coal cleaner. I don’t know, but it is entirely possible that the market will deliver now that oil prices have gone up.

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  31. kiki (425 comments) says:

    PhilBest

    One of the reasons I read blogs is sometimes you come across gems of arguments, not in the sense of abusive tirades but proper arguments and your post was one of them.

    I would add we live in a world of straight liners. People who extrapolate a trend out to the end were our doom waits, without the thought that changes will occur as different forces play on the demand and supply of products.

    And my own pet hobby horse have no greens worked out yet is that the fact that governments have direct access to the pockets of the workers through paye income tax that these things happen. That great pool of money is just too irresistible for the privileged to keep their hands off. Bio fuels, whale meat, military endeavours all come down to access to workers money.

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  32. insider (1,028 comments) says:

    Toad

    You said”What’s having the impact on food prices is the fact that oil demand is exceeding supply, and short-sighted Governments have seen growing biofuels on land that is suitable for food production as a way of responding to this. Ours would have too, if the Greens had not been able to stop them.”

    Did you even know that the Mandate target was predicated on the expectation of growing corn for ethanol in NZ? If not go and read the cabinet paper. It’s all there. So knowing that why did the Greens not vote against the biofuels bill’s introduction? Why didn’t they vote against the 3.4% target that made ethanol use necessary? JF’s speech says nothing about NZ crops, and there is no doubt they would have been displacing food production.

    In fact JF has been promoting biofuels for a number of years. EECA, the agency which effectively reports to her have been promoting biofuels and developing the policy. Indeed a staff member has just published an article saying how good ethanol from brazilian sugar cane is for the environment. To say that the Greens stopped this is absolute rubbish. The only thing they did was get a vague sustainability clause put in.

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  33. insider (1,028 comments) says:

    Phil/Paul

    BP recently said that we are likely to reach peak oil before 2020 but becuase demand has dropped not supply issues.

    As one commentator said – we have been running out of oil in forty years for over 100 years.

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  34. PaulL (5,987 comments) says:

    Insider: so BP are saying peak production will occur because people stop using the stuff, but that doesn’t imply peak supply?

    Of course, I take most of what the oil companies say with a large grain of salt – they aren’t exactly disinterested observers. Largely their interest is in driving up oil prices – which is why their sudden conversion to global warming and peak oil wasn’t exactly trustworthy from where I’m sitting. Kind of like the mad Iranian president. So mad that every time he gets up and says something insane sounding, his country’s main asset goes up in value. Crazy like a fox, no?

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  35. OECD rank 22 kiwi (2,752 comments) says:

    Time to get rid of the mandatory bio-fuel provisions.

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  36. expat (4,050 comments) says:

    I think insider is saying that oil isnt running out.

    Peak oil however justifies the US invading the Middle East though, huh?

    Irrespective, biofuel is a farce and it has jumped food prices by 75%.

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  37. PhilBest (5,125 comments) says:

    Look, who is soft enough in the head to believe that technology has reached a dead end, and oil will still BE the main source of energy for humanity in 100 years time or whenever it is that it is likely to “run out”? Not me. Some Saudi Oil Sheikh, of all people, summed it up beautifully a few years ago; “The Oil age will come to an end not for lack of Oil, just as the Stone Age came to an end not for lack of stones” !

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  38. PhilBest (5,125 comments) says:

    PaulL, me too long since, isn’t it obvious that a myth, or assumption, or whatever, that drives up the price of the product, will hardly be vigorously opposed by those who sell that product? There is an unbelievable amount of soft-headedness abroad on this issue, along with a whole lot of political agendas driving it.

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  39. Paul Walker (50 comments) says:

    stephen (1002) Add karma Subtract karma –4 Says:
    July 25th, 2008 at 2:23 pm

    “Odd that Tangermann doesn’t mention the US subsidies etc in that last paragraph…just lil old NZ.”

    But Tangermann doesn’t mention NZ at all, so I don’t get your point.

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