Table
of
Contents


1AC­
INH ............................................................................................................................................................................................................................................................................. 3
 1AC­
Peak
Corn ................................................................................................................................................................................................................................................................ 4
 1AC­
Peak
Corn ................................................................................................................................................................................................................................................................ 6
 1AC­
Peak
Corn ................................................................................................................................................................................................................................................................ 7
 1AC­
Peak
Corn ................................................................................................................................................................................................................................................................ 9
 1AC­
Peak
Corn ..............................................................................................................................................................................................................................................................10
 1AC­
Peak
Corn ..............................................................................................................................................................................................................................................................11
 1AC­
Peak
Corn ..............................................................................................................................................................................................................................................................12
 1AC­
Energy
Bubbles....................................................................................................................................................................................................................................................13
 1AC­
Energy
Bubbles....................................................................................................................................................................................................................................................14
 1AC­
Energy
Bubbles....................................................................................................................................................................................................................................................16
 1AC
–
SOLVENCY ................................................................................................................................................................................................................................................................17
 1AC
–
SOLVENCY ...............................................................................................................................................................................................................Error!
Bookmark
not
defined.
 1AC
–
SOLVENCY ................................................................................................................................................................................................................................................................21
 1AC
–
SOLVENCY ................................................................................................................................................................................................................................................................22
 AT:
Cellulosic
Increase
Prices...................................................................................................................................................................................................................................25
 ADD­ON:
AMAZON
DEFO .............................................................................................................................................................................................................................................26
 Inherency:
Tech
hurdle...............................................................................................................................................................................................................................................27
 Inherency:
Investment
Weak....................................................................................................................................................................................................................................28
 Inherency:
EISA
Fails ...................................................................................................................................................................................................................................................29
 Inherency:
No
Cellulose
Now ....................................................................................................................................................................................................................................30
 Inherency:
No
Cellulose
Now ....................................................................................................................................................................................................................................31
 Inherency/No
Investor
Confidence
Now...............................................................................................................................................................................................................33
 INHERENCY/NO
INVESTOR
CONFIDENCE
NOW .................................................................................................................................................................................................................34
 INHERENCY/CURRENT
INCENTIVES
FAIL ..........................................................................................................................................................................................................................35
 INHERENCY/CURRENT
INCENTIVES
FAIL ..........................................................................................................................................................................................................................36
 Inherency/
MARKET
PREDICTABILITY
KEY ..................................................................................................................................................................................................................38
 Inherency/
TRANSPORTATION
KEY/OIL
DEPENDENCE
SOLVENCY .............................................................................................................................................................................39
 Inherency/

TRANSPORTATION
KEY/OIL
DEPENDENCE
SOLVENCY ............................................................................................................................................................................40
 ECONOMY
SOLVENCY/MARKET
DIVERSIFICATION ..........................................................................................................................................................................................................41
 Food
Prices:
“Corn
=”
1/4...........................................................................................................................................................................................................................................44
 Food
Prices:
“Corn
=”
2/4...........................................................................................................................................................................................................................................45
 Food
Prices:
“Corn
=”
3/3...........................................................................................................................................................................................................................................46
 Food
Prices:
“Corn
=”
4/4...........................................................................................................................................................................................................................................47
 Food
Prices:
Bad­
Need
Cellulose ............................................................................................................................................................................................................................48
 Corn­based
ethanol
causes
food
price
spikes
–
cellulosic
is
best ...........................................................................................................................................................49
 Cellulosic
doesn’t
increase
food
prices............................................................................................................................................................................................................50
 Corn
Ethanol
Bad
–
Food
Prices ...............................................................................................................................................................................................................................51
 Corn
Ethanol
Bad
–
Food
Insecurity .......................................................................................................................................................................................................................56
 AT:
Market
Solves
Food
Prices .................................................................................................................................................................................................................................57
 Solvency:
Commercialization
Solves
Land
Use ...................................................................................................................................................................................................58
 AT:
Hurts
Corn
Farmers..............................................................................................................................................................................................................................................59
 Food
Prices:
Increasing...............................................................................................................................................................................................................................................60
 Food
Prices:
Increasing...............................................................................................................................................................................................................................................62
 Food
Prices:
Kills
Third
World
Consumption......................................................................................................................................................................................................63
 Food
Prices:
Starvation...............................................................................................................................................................................................................................................64
 Food
Prices:
Instability ...............................................................................................................................................................................................................................................65
 Food
Prices:
Cellulose
Solves ....................................................................................................................................................................................................................................66
 Bubble
Economy
Extensions:
Cartels
will
Manipulate
Prices........................................................................................................................................................................67
 Bubble
Economy
Extensions:
High
Oil
Prices
Destroy
the
Economy...........................................................................................................................................................68
 Bubble
Economy
Extensions:
Answer
to
Infinite
Oil.........................................................................................................................................................................................70
 Bubble
Economy
Extensions:
Bio­Fuels
Solve
Price
Shocks...........................................................................................................................................................................72
 Bubble
Internal:
Inflation ..........................................................................................................................................................................................................................................77
 Bubble
Internal:
Inflation ..........................................................................................................................................................................................................................................78
 Impact:
Soil
Erosion .....................................................................................................................................................................................................................................................81
 Cellulose:
Investment
Key..........................................................................................................................................................................................................................................82
 Cellulose:
Investment
Key..........................................................................................................................................................................................................................................83
 Cellulose
Solves
Ag
Crisis ...........................................................................................................................................................................................................................................84
 Cellulose
Solves
Dependence....................................................................................................................................................................................................................................85
 Add­on:
Oil
Sands..........................................................................................................................................................................................................................................................86
 Off­Case:
Uniqueness
Shield ......................................................................................................................................................................................................................................87
 OFF
Case:
Oil
Answers .................................................................................................................................................................................................................................................88
 Off
Case:
Saudi
Relations
Answers ..........................................................................................................................................................................................................................89
 ***Aff*** ...........................................................................................................................................................................................................................................................................90
 Corn
Ethanol
Bad:
Amazon ........................................................................................................................................................................................................................................90


Corn
Ethanol
Bad:
Soil
Erosion
=
Extinction........................................................................................................................................................................................................91
 Corn
Ethanol
Bad:
Soil
Erosion­
Corn
Prices
= ....................................................................................................................................................................................................93
 Corn
Ethanol
Bad
–
Global
Warming ......................................................................................................................................................................................................................94
 Corn
Ethanol
Bad
–
Emissions ..................................................................................................................................................................................................................................95
 Corn
Ethanol
Bad:
Water
Pollution.........................................................................................................................................................................................................................96
 AT:
Biofuels
Help
the
Environment ..................................................................................................................................................................................................................... 100
 Corn
Ethanol
Bad
–
Environment ......................................................................................................................................................................................................................... 101
 Corn
Ethanol
Bad
–
Dead
Zone .............................................................................................................................................................................................................................. 104
 Corn
Ethanol
Bad
–
Water
Quality........................................................................................................................................................................................................................ 105
 Corn
Ethanol
Bad
–
Unstable.................................................................................................................................................................................................................................. 106
 Corn
Ethanol
Bad
–
Not
Sustainable .................................................................................................................................................................................................................... 107
 Corn
Ethanol
Bad
–
No
Energy
Independence .................................................................................................................................................................................................. 108
 AT:
Corn
Solves
Energy
Needs ............................................................................................................................................................................................................................... 109
 AT:
Corn
Fulfills
Legal
Mandates .......................................................................................................................................................................................................................... 111
 Current
Ethanol
Bad
–
Malaysian
Forests.......................................................................................................................................................................................................... 112
 Current
Ethanol
Bad
–
Amazon
Deforestation ................................................................................................................................................................................................. 113
 Cellulose
Ethanol
Good
–
General......................................................................................................................................................................................................................... 114
 Cellulose
Good:
advanced
Biofuels ...................................................................................................................................................................................................................... 116
 Cellulose
Good:
TECHNOLOGICAL
FEASIBILITY ......................................................................................................................................................................................................... 117
 Cellulosic
Ethanol
Good
–
Gas
Demand .............................................................................................................................................................................................................. 119
 Cellulosic
Ethanol
Good
–
Gas
Emissions ........................................................................................................................................................................................................... 120
 Cellulosic
Ethanol
Good
–
Global
Warming ....................................................................................................................................................................................................... 121
 Cellulosic
Ethanol
Good
–
Environment ............................................................................................................................................................................................................. 122
 Cellulosic
Ethanol
Good
–
Biodiversity............................................................................................................................................................................................................... 123
 Cellulosic
Ethanol
Good
–
Land
Use ..................................................................................................................................................................................................................... 124
 Cellulosic
Ethanol
Good
–
Economically
Viable ............................................................................................................................................................................................... 125
 Cellulosic
Ethanol
Good
–
Efficient....................................................................................................................................................................................................................... 126
 Cellulosic
Ethanol
Good
–
Feasible....................................................................................................................................................................................................................... 128
 AT:
Cellulose
Ethanol
Hurts
Environment......................................................................................................................................................................................................... 129
 Cellulose
EthanolBiotech.................................................................................................................................................................................................................................... 131
 Oil
Dependence
Bad .................................................................................................................................................................................................................................................. 132
 AT:
High
Oil
Prices
Solve
AE ................................................................................................................................................................................................................................... 133
 Solvency
–
Incentives................................................................................................................................................................................................................................................ 134
 Solvency
–
Cellulose/Corn
Combo........................................................................................................................................................................................................................ 135
 Solvency
–
Banning
Biofuels................................................................................................................................................................................................................................... 136
 Solvency
–
Free
Market ............................................................................................................................................................................................................................................ 137
 Free
Market
–
AT:
Ethanol
good............................................................................................................................................................................................................................ 138


1AC- INH
CURRENT INCENTIVES FAIL—WE NEED A NEW POLICY TO CREATE MARKET BREAKTHROUGH FOR ADVANCED BIOFUELS.
David Rotman, Editor of Technololgy Review, “The price of biofuels: making ethanol from corn is expensive. Better biofuels are years away from the gas tank. Farmers are reluctant to change their practices. But do we really have any alternative to biofuels?” Technology Review, Vol. 111 No. 1, January 1, 2008. But back in the Midwest, there is a "show me" attitude toward suchblue-sky projections, and there are lingering questions about just how the nation's vast agricultural infrastructure will switch over to biomass. If Khosla's projections prove out, "then wonderful," says the University of Minnesota's Runge. "Meanwhile, we're stuck in reality." Perhaps the main point of contention, Runge suggests, is whether corn ethanol will in fact lead to new technologies--or stand in their way. "It is my opinion that corn ethanol is a barrier to converting to cellulosics," he says, pointing to the inertia caused by political and business interests heavily invested in corn ethanol and its infrastructure. Runge is not alone in his skepticism. "Unless the cost is reduced significantly, cellulosic ethanol is going nowhere," says Wally Tyner, a professor of agricultural economics at Purdue University. Making cellulosic ethanol viable will require either a "policy mechanism" to encourage investment in new technologies or a "phenomenal breakthrough"--and "the likelihood of that is not too high," Tyner says. Farmers and ethanol producers currently have no incentive to take on the risks of changing technologies, he adds. There is "no policy bridge" tohelp make the transition. "The

status quo won't do it."

Despite the sharp differences of opinion, there's still some common ground between people like Khosla, whose unbridled faith in innovation has been nurtured by the successes of Silicon Valley, and the Midwesterners whose pragmatism was forged by the competitive economics of agriculture. In particular, most observers agree that annual production of corn-derived ethanol will level off within a few years. After that, any growth in biofuel production will need to come from new technologies. But if cellulosic biofuels are to begin replacing gasoline within five to ten years, facilities will need to start construction soon. This fall, Range Fuels, a company based in Broomfield, CO, announced that it had begun work in Georgia on what it claims is the country's first commercial-scale cellulosic-ethanol plant. The Range facility, which will use thermochemical technology to make ethanol from wood chips, is scheduled to reach a capacity of 20 million gallons in 2008 and eventually increase to 100 million gallons a year. Meanwhile, Mascoma has announced several demonstration units, including a facility inTennessee that will be the first cellulosic-ethanol plant built to use switchgrass. But these production plants are federally subsidized or are a result of partnerships with state development organizations; attracting private investment for commercialscale production will be another matter. Indeed, ramping up the capacity of cellulosic-ethanol production will be a huge and risky challenge, says Colin South, president of Mascoma. "When people talk about cellulosic ethanol as if it is an industry, it is an unfair portrayal," he says. "There are a number of pilot plants, but none of them have gotten out of the pilot scale. We still need to show we can actually run these in the form of an operating chemical plant."

1AC- Peak Corn
SCENARIO ONE: PEAK CORN RENEWABLE FUEL STANDARDS FORCE MORE ETHANOL PRODUCTION THAN PHYSICALLY POSSIBLE- WITHOUT ANY NEW INCENTIVES, CORN WILL HIT A PRODUCTION WALL.
Tim Sklar, Sklar & Associates, “Obstacles bedevil EISA's RFS biofuels mandate,” Oil & Gas Journal, March 17, 2008. One such proposal being actively promoted is to replace transportation fuels refined from imported oil with fuels such as biodiesel, bioethanol, and other advanced biofuels. Often presented in the popular media and in political discourse is the notion that one of the most effective strategies to reduce our national dependence on imported oil is to have large quantities of biofuels produced from things that grow, and that somehow the private sector will embrace this strategy and produce all of the renewable fuels that will be needed. The latest buzz is about using waste materials instead of food crops, because soaring corn prices have distorted the prices we pay for food as well as for corn ethanol. The public is being told this second generation of biofuels could be produced from agriwaste, such as corn stover and wheat straw; from fast-growing cellulosic crops, such as switch grass; from forest residue and other wood waste; and from municipal solid waste retrieved from land fills. Unfortunately, not being mentioned are the impracticalities of producing large quantities of fuels from these materials. Not being addressed are other impediments, such as bringing together the varied and often competing interests into biofuels projects, the technological hurdles that must be overcome, the vast amount of capital investment that will be needed, and the incentives the public will need to create a new industry. For the last several years our company has been assisting clients in the development of biofuels projects. It is dismaying that the realities encountered in developing renewable biofuels are often not even mentioned, let alone discussed. Assumptions upon which so much hope is being placed are often wrong or shortsighted. The latest example of oversimplification is the presumption built into the Renewable Fuels Standards (RFS), which is a component of the Energy Independence and Security Act of 2007 (EISA). RFS is a legislative mandate requiring increased national production of renewable biofuels--to 36 billion gal/year by 2022 from 9 billion gal/ year in 2008-- without addressing how this can be done. It therefore is in serious need of a reality check. As shown in Fig. 1, the RFS mandates that US corn ethanol production reach a production peak by 2015 and not increase thereafter. This will require that cellulosic biofuel and all other advanced biofuels play a larger role in meeting the RFS mandate, increasing to 58% of the total RFS mandate by 2022 from less than 1% today, with corn ethanol dropping from its current 99% of the total to 42% in 15 years (Fig. 2). The fundamental question that one must ask is whether it is reasonable to assume that EISA's RFS mandate for the private sector is realistic. Based on what is known today, it is not. If nothing is done to assist the private sector, a mandated 36 billion gal/year of renewable fuels within 15 years is wishful thinking.

The SQ lacks incentives for advanced biofuel development- locking in corn ethanol as the only way to meet RFS mandates.
Tim Sklar, Sklar & Associates, “Obstacles bedevil EISA's RFS biofuels mandate,” Oil & Gas Journal, March 17, 2008. To meet the RFS mandate, capital investment in advanced biofuels plants must reach $11 billion in 4 years, increasing to $46 billion in 10 years and $105 billion in 15 years. Added to these amounts is the capital cost of increasing corn ethanol output to the 15 billion gal/year level at an added capital cost of $75 billion. In other words, the RFS mandate calls for private capital investment in renewable fuels plant capacity of $180 billion over the next 15 years (see table). Added to this are the additional amounts that must be invested to improve the technology, provide supporting pipelines and storage terminal capacity, and upgrade distribution facilities to handle new fuels. Clearly, all of this private investment is just not going to happen as a result of a legislative mandate. With respect to RFS projections, it may be realistic to expect corn ethanol production to increase to 15 billion gal/year over the next 10 years from 9 billion gal/year, assuming that current support programs remain in effect and corn crops are increased without further market distortion. But it is unrealistic to assume that the RFS projections for advanced biofuels production could match corn ethanol production in 10-15 years. Cellulosic ethanol and biodiesel production is now just a "drop in the bucket." In 4 years, the RFS mandate calls for 2 billion gal of cellulosic biofuel, biodiesel, and other advanced biofuels to be produced, increasing to 9 billion gal 10 years from now, and 21 billion gal 15 years from now. This growth in advanced biofuels production will require at least 35 new 55-million gal/year biofuels plants to be operating by 2012, 164 by 2017, and 382 by 2022. New capital investment in advanced biofuels plants of this size could exceed $11 billion by 2012 and

require an additional $34 billion by 2017 and $59 billion more by 2022. EISA does not provide funding or incentives for this massive investment it is mandating.

1AC- Peak Corn
BIOFUELS DRIVE UP FOOD PRICES- RISKING A GLOBAL RECESSION.
Larry Elliott, journalist, “Soft landings and hard realities: The IMF thinks we can ride out this crisis, but there could be far worse news to come,” Guardian Weekly, April 18, 2008, lexis, accessed 6/18/2008. The first is that it is far too early to say that the worst is over. Henry Paulson, who does Summers's old job at the US treasury, said he expected to see some impact from lower interest rates and tax cuts by the third quarter of this year. But that depends on the US housing market stabilising, because until it does there is a real risk of a vicious circle of foreclosures, collapsing consumer confidence, rising unemployment, bigger losses for US banks, tighter credit conditions and a falling stock market. The IMF says that risks are still heavily weighted to the downside. It produced an alternative scenario in which there would be a further tightening of credit conditions, a far bigger drop in equity and property prices than it currently expects, a gloomier assessment of the prospects for long-term productivity growth in the US, and an unwillingness on the part of foreign investors to continue buying US assets. It already believes there is a 25% risk of a global recession; under this alternative scenario it says there would be a deeper and longer period of falling growth in the US, accompanied by an extended period of weakness in the eurozone and spillover effects on the rest of the global economy through weaker trade flows and tougher credit conditions. This scenario looks just as realistic as the fund's baseline soft-landing forecast. For one thing, there is a clear disjunction between the idea that this is the biggest financial shock since the Depression and the idea that there will be only a short-lived and relatively mild impact on growth. In addition, the soft-landing thesis conveniently ignores the other headwinds facing the global economy. These include rocketing commodity prices that are contributing to a sharp rise in imported inflation, severe downward pressure on the dollar that threatens to become a disorderly plunge, the still-sizeable global imbalances that have resulted in massive trade surpluses in Asia, and massive trade deficits in the US, which have been only slightly reduced by a cheaper greenback and weaker growth. That list was supplemented last week by global hunger caused by rising food prices. The world has suddenly woken up to what should have been blindingly obvious: trying to solve the problem of climate change by using crops for biofuel was a short-term fix with potentially lethal result. If you encourage farmers to use land that would have produced food for fuel, the price of food will go up. Gordon Brown considers this to be a serious crisis and is right to call for a global response. Yet apart from the humanitarian need to help those going hungry, rising food prices make it harder to avoid recession in the West, since they stifle consumer confidence and make policymakers warier about cutting interest rates. [[Impact]]

1AC- Peak Corn
We need accelerated incentives for cellulosic ethanol to reduce commodity price inflation.
ROSALIE WESTENSKOW, journalist, “Farm bill hikes biofuels funding,” UPI Energy May 22, 2008. We have a responsibility to carefully assess the impact of our policies on those who face poverty and hunger and to take actions to make the lives of poor people less difficult. In living up to this commitment, there should be no reason to pit food security against energy security. The 2005 Energy Policy Act mandated 7.5 billion gallons of renewable fuels to be mixed into gasoline by 2012. Actual ethanol production is at least four years ahead of that schedule, with expected production of more than 7 billion gallons this year. But this is just the beginning of the planned expansion of corn ethanol. The 2007 Energy Independence and Security Act, mandates 36 billion gallons of biofuels by 2022. While the majority of this amount is meant to be "advanced biofuels", 15 billion gallons would be corn ethanol. This would double current corn ethanol production and implies a much larger diversion of corn from food and feed. In addition, the pending farm bill would continue incentives for corn to ethanol production. The 2008 Farm Bill Conference Report would lower the blender's tax credit from 51 cents per gallon to 46 cents per gallon to offset a production credit for cellulosic ethanol of $1.01 per gallon. The Farm Bill would also extend the import tariff of 541 cents per gallon until 2010. Additional provisions include other tax incentives, supports and investments in research, production and cellulosic technology. Despite minor reductions to the blender's credit, US support to ethanol is predicted to approach $100 billion for the 2006 to 2012 period and will likely rise if the new Renewable Fuels Standard is met. The large majority of this support - about 75percent - will be directed to corn ethanol"'. If the connections between corn ethanol production and increased food prices are accurate, then the policies associated with incentives for corn to ethanol production need to be reevaluated in light of the global food crisis. Therefore, Oxfam America recommends that a blue ribbon panel be established to quickly investigate this issue and that the panel bring recommendations back to the Congress by the end of this calendar year to guide decisions regarding incentives and subsidies for ethanol production already on the books and those likely to be added should the farm bill become law in its current form. Clearly, an accelerated strategy is needed to do the research and development necessary to quickly transition to the so-called "next generation" of cellulosic biofuels. Oxfam believes that the US Congress should promote research and development for alternative and renewable sources of fuel that do not lead to increased food insecurity in the developing world.

Federal Action is key to assuring markets
W. Michael Griffin and Lester B. Lave, Executive Director of the Green Design Institute and Professor of Economics at the Tepper School of Business- Carnegie Mellon University, respectively, “Cellulosic Ethanol in an Oil and Carbon Constrained World,” in A HIGH GROWTH STRATEGY FOR ETHANOL, 2006, available online at: www.aspeninstitute.org/atf/cf/%7BDEB6F227-659B-4EC8-8F84-8DF23CA704F5%7D/EEEethanol2.pdf. Conclusions The success of a strategy for adopting ethanol depends on many issues: (1) The Government must demonstrate a commitment to the aggressive use of ethanol in its fuel mix; a. To assure markets, and b. To protect the developing alternative energy market from the inevitable rise and fall of oil prices. (2) Maximize ethanol production from corn in the near term; a. To begin rapidly to wean ourselves from gasoline and to develop the needed infrastructure, and b. To make the farming community less threatened by the third recommendation. (3) Permit imports of ethanol from developing countries; a. To accelerate the transition away from gasoline, b. To help exporting nations with their own internal development and to divert dollars from OPEC. (4) Build first of a kind cellulosic ethanol production facilities a. To provide much needed learning by doing. b. To develop a “front end” that can then be deployed at current corn ethanol facilities. (5) Target a cellulosic ethanol price to meet a market where $35

to 45/bbl oil is likely.

Miami inst.
1AC- Peak Corn

ABJ

Investment is the key to avoiding low-yield bio-fuels… this avoids the inevitable food price shock of fuel crops.
Mark W. Rosegrant, director of the Environment and Production Technology Division (EPTD) at International Food Policy Research Institute, written with Siwa Msangi- a postdoctoral fellow, Timothy Sulser and Rowena Valmonte-Santos are research analysts in EPTD, “BIOENERGY AND AGRICULTURE: PROMISES AND CHALLENGES,” International Food Policy Research Institute- FOCUS 14 • BRIEF 3 OF 12 • DECEMBER 2006, available online at:
http://www.ifpri.org/2020/focus/focus14.asp

The “aggressive biofuel growth” scenario shows dramatic increases in world prices for feedstock crops (Table 2). If cassava were to be used aggressively as a feedstock for bioethanol, cassava prices would rise tremendously, causing sizable welfare losses to the major consumers of this crop, who reside mostly in Sub-Saharan Africa. There would also be high economic costs. If cassava is not profitable as a biofuel feedstock at today’s oil prices, it certainly would not be at more than double the cassava price. Thus, this scenario would entail subsidies for the biofuel sector, which already exist for many countries (such as within the European Union), and could take the form of tax concessions at the pump or producer credits. The high price increases for oils and cassava suggest that the relatively low-yielding oil and root crops will have to make up fairly high shares of total production in order to meet the oil-displacement trends embedded in the “aggressive biofuel growth” scenario. In contrast, the second scenario, which includes the impact of cellulosic technologies, shows a considerable softening of these effects, especially for cassava and oil crops, and underlines the potential importance of such technical innovations at the industry level. Improvements in conversion efficiency for non-cellulosic processes are not introduced into the model, since these technologies have been in use for some time and show little room for improvement, based on studies cited in the literature. The third scenario illustrates the importance of crop technology innovation at the farm production level and shows a further softening of price impacts, with cassava undergoing the largest decrease. This third scenario in particular shows how investments in the biofuel industry and the agricultural sector can be combined to produce a more favorable outcome, which can mitigate the consumer-level impacts. Moreover, this scenario seems the most plausible of the three, as neither national governments nor fuel producers would want to engage in a large-scale expansion of production without the necessary investments being in place to ensure a reliable supply of feedstock material at a reasonable cost, both for producers and for consumers of food and feed commodities. Although the mechanisms by which feedstocks might be substituted in and out of biofuel production according to their competitiveness with long-term fossil-fuel prices and each other have not been modeled, an illustrative set of results (for a “fixed” menu of inputs) argues strongly for preparatory investments in both the agricultural sector and the fuel industry itself. SUMMARY AND CONCLUSIONS The results show a “food-versus-fuel” trade-off in cases where innovations and technology investments are largely absent and where trade and subsidy policies are failing. In view of past agricultural policy, such a scenario cannot be ruled out, unfortunately, but it could certainly be avoided. This bleak picture changes considerably when biofuel and crop production technology advancements are taken into account. Although there is some uncertainty about the timing of eventual large-scale use of cellulosic conversion technologies for biofuel production, the potential benefits are well recognized in the literature, making a strong case for further research in that area. The strong price increases for root crops like cassava in the first aggressive scenario suggest that without the necessary productivity improvements, aggressive growth in biofuels could have adverse effects on well-being in regions like Sub-Saharan Africa, where a large proportion of cassava consumption is for food. The third scenario, which gives an added boost to agricultural productivity growth in Africa, demonstrates this clearly.

Page 9 of 139

Miami inst.
1AC- Peak Corn

ABJ

High oil prices mean that, as long as ethanol production depends on corn, high food prices will decimate the agriculture industry. Our plan solves the short-term food prices bubble by discouraging investment in corn ethanol
Runge
and
Senauer
2007,
C.
Ford
Runge
is
Distinguished
McKnight
University
Professor
of
Applied
Economics
and
Law
 and
Director
of
the
Center
for
International
Food
and
Agricultural
Policy
at
the
University
of
Minnesota.
Benjamin
 Senauer
is
Professor
of
Applied
Economics
and
Co‐director
of
the
Food
Industry
Center
at
the
University
of
Minnesota,
 May/June
2007,
“How
Biofuels
Could
Starve
the
Poor,”
Foreign
Affiars,
Vol.
86,
Issue
3,
Ebsco
 This
trend
has
strong
momentum.
Despite
a
recent
decline,
many
experts
expect
the
price
of
crude
oil
to
remain
high
in
 the
long
term.
Demand
for
petroleum
continues
to
increase
faster
than
supplies,
and
new
sources
of
oil
are
often
 expensive
to
exploit
or
located
in
politically
risky
areas.
According
to
the
U.S.
Energy
Information
Administrations
latest
 projections,
global
energy
consumption
will
rise
by
71
percent
between
2003
and
2030,
with
demand
from
developing
 countries,
notably
China
and
India,
surpassing
that
from
members
of
the
Organization
for
Economic
Cooperation
and
 Development
by
2015.
The
result
will
be
sustained
upward
pressure
on
oil
prices,
which
will
allow
ethanol
and
biodiesel
 producers
to
pay
much
higher
premiums
for
corn
and
oilseeds
than
was
conceivable
just
a
few
years
ago.
The
higher
oil
 prices
go,
the
higher
ethanol
prices
can
go
while
remaining
competitive‐‐and
the
more
ethanol
producers
can
pay
for
 corn.
If
oil
reaches
$80
per
barrel,
ethanol
producers
could
afford
to
pay
well
over
$5
per
bushel
for
corn.

With
the
price
 of
raw
materials
at
such
highs,
the
biofuel
craze
would
place
significant
stress
on
other
parts
of
the
agricultural
sector.
In
 fact,
it
already
does.
In
the
United
States,
the
growth
of
the
biofuel
industry
has
triggered
increases
not
only
in
the
 prices
of
corn,
oilseeds,
and
other
grains
but
also
in
the
prices
of
seemingly
unrelated
crops
and
products.
The
use
of
 land
to
grow
corn
to
feed
the
ethanol
maw
is
reducing
the
acreage
devoted
to
other
crops.
Food
processors
who
use
 crops
such
as
peas
and
sweet
corn
have
been
forced
to
pay
higher
prices
to
keep
their
supplies
secure‐‐costs
that
will
 eventually
be
passed
on
to
consumers.
Rising
feed
prices
are
also
hitting
the
livestock
and
poultry
industries.
According
 to
Vernon
Eidman,
a
professor
emeritus
of
agribusiness
management
at
the
University
of
Minnesota,
higher
feed
costs
 have
caused
returns
to
fall
sharply,
especially
in
the
poultry
and
swine
sectors.
If
returns
continue
to
drop,
production
 will
decline,
and
the
prices
for
chicken,
turkey,
pork,
milk,
and
eggs
will
rise.
A
number
of
Iowa's
pork
producers
could
go
 out
of
business
in
the
next
few
years
as
they
are
forced
to
compete
with
ethanol
plants
for
corn
supplies.
Proponents
of
 corn‐based
ethanol
argue
that
acreage
and
yields
can
be
increased
to
satisfy
the
rising
demand
for
ethanol.
But
U.S.
 corn
yields
have
been
rising
by
a
little
less
than
two
percent
annually
over
the
last
ten
years,
and
even
a
doubling
of
 those
gains
could
not
meet
current
demand.
As
more
acres
are
planted
with
corn,
land
will
have
to
be
pulled
from
other
 crops
or
environmentally
fragile
areas,
such
as
those
protected
by
the
Department
of
Agriculture's
Conservation
Reserve
 Program.

In
addition
to
these
fundamental
forces,
speculative
pressures
have
created
what
might
be
called
a
"biofuel
 mania":
prices
are
rising
because
many
buyers
think
they
will.
Hedge
funds
are
making
huge
bets
on
corn
and
the
bull
 market
unleashed
by
ethanol.
The
biofuel
mania
is
commandeering
grain
stocks
with
a
disregard
for
the
obvious
 consequences.
It
seems
to
unite
powerful
forces,
including
motorists'
enthusiasm
for
large,
fuel‐inefficient
vehicles
and
 guilt
over
the
ecological
consequences
of
petroleum‐based
fuels.
But
even
as
ethanol
has
created
opportunities
for
huge
 profits
for
agribusiness,
speculators,
and
some
farmers,
it
has
upset
the
traditional
flows
of
commodities
and
the
 patterns
of
trade
and
consumption
both
inside
and
outside
of
the
agricultural
sector.


Page 10 of 139

Miami inst.
1AC- Peak Corn

ABJ

Cellulosic ethanol stops skyrocketing food prices, global wars and economic collapse – kills billions
Lester
R.
Brown,
Director
–
Earth
Policy
Institute,
“Massive
Diversion
of
U.S.
Grain
to
Fuel
Cars
is
Raising
World
Food
 Prices,
Risking
Political
Instability”,
6‐13‐2007,
http://www.earth‐policy.org/Transcripts/SenateEPW07.htm
 The escalating share of
the
U.S. grain
harvest
going to ethanol
distilleries
is driving up food prices worldwide.
Investment
in
fuel
 ethanol
distilleries
has
soared
since
gasoline
prices
jumped
at
the
end
of
2005.
Once completed, distilleries
now
under
construction
could double U.S. ethanol output,
turning
nearly
30
percent
of
next
year's
U.S.
grain
harvest
into
fuel
for
automobiles.
This
unprecedented
diversion
of
the
world's
 leading
grain
crop
to
the
production
of
fuel
will affect food prices everywhere, risking
political
instability.

The U.S. corn crop, accounting for 40 percent of the global harvest and supplying
nearly
70 percent of the world's
corn
imports, looms large in the world food economy.
Annual
U.S.
corn
exports
of
some
55
million
tons
account
for
nearly
one
fourth
of
world
grain
exports.
The
corn
harvest
of
Iowa
 alone
exceeds
the
entire
grain
harvest
of
Canada.
Substantially reducing this export flow would send shock waves throughout the world economy.
In
six
of
the
last
seven
years,
total
world
grain
production
has
fallen
short
of
use.
As
a
result,
world
carryover
stocks
of
grain
have
been
drawn
down

to
57
days
of
consumption,
the
lowest
level
in
34
years.
(See
data.)
The
last
time
they
were
this
low
wheat
and
rice
prices
doubled.
Already
corn
prices
have
doubled
over
 the
last
year,
wheat
futures
are
trading
at
their
highest
level
in
10
years,
and
rice
prices
are
rising.
Soybean
prices
are
up
by
half.
If
the
United
States
were
to
suffer
intense
 heat
and
severe
drought
this
summer
in
the
Corn
Belt,
rising
grain
prices
could
quickly
take
the
world
into
uncharted
territory.
The
countries
initially
hit
by
rising
food
prices
 are
those
where
corn
is
the
staple
food.
In
Mexico,
one
of
more
than
20
countries
with
a
corn‐based
diet,
the
price
of
tortillas
is
up
by
60
percent.
Angry
Mexicans
in
crowds
 of
up
to
75,000
have
taken
to
the
streets
in
protest,
forcing
the
government
to
institute
price
controls
on
tortillas.
Food
prices
are
also
rising
in
China,
India,
and
the
United
 States,
countries
that
contain
40
percent
of
the
world's
people.
While
relatively
little
corn
is
eaten
directly
in
these
countries,
vast
quantities
are
consumed
indirectly.
The
 milk,
eggs,
cheese,
chicken,
ham,
ground
beef,
ice
cream,
and
yogurt
in
the
typical
refrigerator
are
all
produced
with
corn.
In
effect,
the
refrigerator
is
filled
with
corn.
And
 the
price
of
every
one
of
these
items
in
the
refrigerator
is
affected
by
the
price
of
corn.
Rising
grain
and
soybean
prices
are
driving
up
meat
and
egg
prices
in
China.
January
 pork
prices
were
up
20
percent
above
a
year
earlier,
eggs
were
up
16
percent,
while
beef,
which
is
less
dependent
on
grain,
was
up
6
percent.
For
China,
which
suffered
the
 most
massive
famine
in
human
history
in
1959‐61,
these
food
price
rises
could
be
approaching
a
politically
dangerous
level.
In
India,
the
overall
food
price
index
in
January
 2007
was
10
percent
higher
than
a
year
earlier.
The
price
of
wheat,
the
staple
food
in
northern
India,
has
jumped
11
percent,
moving
above
the
world
market
price.
In
the
 United
States,
the
U.S.
Department
of
Agriculture
projects
that
the
wholesale
price
of
chicken
in
2007
will
be
10
percent
higher
on
average
than
in
2006,
the
price
of
a
 dozen
eggs
will
be
up
a
whopping
21
percent,
and
milk
will
be
14
percent
higher.
And
this
is
only
the
beginning.

In
the
past,
food
price
rises
have
usually
been
weather
 related
and
always
temporary.
This
situation
is
different.
As
more
and
more
fuel
ethanol
distilleries
are
built,
world
grain
prices
are
starting
to
move
up
toward
their
oil‐ equivalent
value
in
what
appears
to
be
the
beginning
of
a
long‐term
rise.
The
food
and
energy
economies,
historically
separate,
are
now
merging.
In
this
new
economy,
if
 the
fuel
value
of
grain
exceeds
its
food
value,
the
market
will
move
it
into
the
energy
economy.
As
the
price
of
oil
climbs
so
will
the
price
of
food.
If
oil
jumps
from
$60
to
 $80
a
barrel,
you
can
bet
that
your
supermarket
bills
will
also
go
up.
If
oil
climbs
to
$100,
how
much
will
you
pay
for
a
dozen
eggs?
From
an
agricultural
vantage
point,
the
 automotive
demand
for
fuel
is
insatiable.
The
grain
it
takes
to
fill
a
25‐gallon
tank
with
ethanol
just
once
will
feed
one
person
for
a
whole
year.
Converting
the
entire
U.S.
 grain
harvest
to
ethanol
would
satisfy
only
16
percent
of
U.S.
auto
fuel
needs.
Since
the
United
States
is
the
leading
exporter
of
grain,
shipping
more
than
Canada,
Australia,
 and
Argentina
combined,
what

happens to the U.S. grain crop affects the entire world. With the massive diversion of grain to produce fuel
for
cars,
exports will drop.
What
was
for
decades
the
world's
breadbasket
is
fast
becoming
the
U.S.
fuel
tank.
The
number
of
hungry

people
in
the
world
has
been
declining
for
several
decades,
but
in
the
late
1990s
the
trend
reversed
and
the
number
began
to
rise.
The
United
Nations
currently
 lists
34
countries
as
needing
emergency
food
assistance.
Many
of
these
are
considered
failing
states,
including
Chad,
Iraq,
Liberia,
Haiti,
and
Zimbabwe.
Since
 food
aid
programs
typically
have
fixed
budgets,
if
the
price
of
grain
doubles,
food
aid
will
be
reduced
by
half.
Urban
food food
prices
in
low
and
middle
income
countries,
such
as
Mexico,
could

protests in response to rising


lead to
political
instability that would
add
to
the
growing
list
of
failing
states.


At
some
point,
spreading
political
instability
could
disrupt global economic progress.
Against
this
backdrop,
Washington
is
consumed
with
"ethanol
 euphoria."
President
Bush
in
his
State
of
the
Union
address
set
a
production
goal
for
2017
of
35
billion
gallons
of
alternative
fuels,
including
grain‐based
and
 cellulosic
ethanol,
and
fuel
from
coal.
Given
the
current
difficulties mounting
public
opposition
to
coal
fuels,
which
are
far
more
carbon‐intensive
than
gasoline,
most
of
the
fuel
to
meet
this
goal
might
well
have

in producing cellulosic ethanol at a competitive cost
and
given
the
 to come

from grain.
This
could
take
most
of
the
U.S.
grain
harvest,
leaving
little
grain
to
meet
U.S.
needs,
much
less
those
of
the
hundred
or
so
countries
that
import
 grain.
The stage is now set for direct competition for grain between
the
800
million
people
who
own
automobiles, and the world's 2 billion poorest
people.
The
risk
is
that
millions
of
those
on
the lower rungs
of
the
global
economic
ladder
will start falling off as rising
 food
prices drop
their
consumption below the survival level.
Soaring food prices could lead to
urban
food
riots in
scores
of
 lower‐income
countries
that
rely
on
grain
imports,
such
as
Indonesia, Egypt,
Algeria,
Nigeria,
and Mexico. The resulting
political
 instability could
in
turn
disrupt the global economy,
directly
affecting
all
countries.

Page 11 of 139

Miami inst.
1AC- Peak Corn

ABJ

Only development of cellulose ethanol can take us away from the corn ethanol economy because that’s the only way to insulate agriculture from oil inflation.

 Lester
R.
Brown,
president
of
the
Earth
Policy
Institute,
8/16/2006,
“Ethanol
could
leave
the
world
hungry,”
 http://money.cnn.com/magazines/fortune/fortune_archive/2006/08/21/8383659/index.htm
 Once
stimulated
solely
by
government
subsidies,
biofuel
production
is
now
being
driven
largely
by
the
runaway
price
of
 oil.
Many
food
commodities,
including
corn,
wheat,
rice,
soybeans,
and
sugar
cane,
can
be
converted
into
fuel;
thus
the
 food
and
energy
economies
are
beginning
to
merge.
The
market
is
setting
the
price
for
farm
commodities
at
their
oil‐ equivalent
value.
As
the
price
of
oil
climbs,
so
will
the
price
of
food.
In
some
U.S.
Cornbelt
states,
ethanol
distilleries
are
 taking
over
the
corn
supply.
In
Iowa,
25
ethanol
plants
are
operating,
four
are
under
construction,
and
another
26
are
 planned.
Iowa
State
University
economist
Bob
Wisner
observes
that
if
all
those
plants
are
built,
distilleries
would
use
the
 entire
Iowa
corn
harvest.
In
South
Dakota,
ethanol
distilleries
are
already
claiming
over
half
that
state's
crop.
The
key
to
 lessening
demand
for
grain
is
to
commercialize
ethanol
production
from
cellulosic
materials
such
as
switchgrass
or
 poplar
trees,
a
prospect
that
is
at
least
five
years
away.



Page 12 of 139

Miami Institute 08

Ethanol

1AC- Energy Bubbles
SCENARIO 2: ENERGY BUBBLE
CYCLICAL SHOCKS IN OIL MARKETS WILL CREATE AN UNPRECEDENTED GLOBAL ECONOMIC DEPRESSION. Jeremy Wakeford, Senior Lecturer, School of Economics, University of Cape Town, “Peak Oil and South Africa: Impacts and Mitigation,” March 8, 2007, Available at www.netl.doe.gov/publications/others/pdf/Oil_Peaking_NETL.pdf, accessed 5/20/08. Indeed, the integrity of the world financial system is deeply dependent on continuous economic growth. This is because new money is created as debt, on which interest payments are required. The only way that the interest can be repaid in future is if more new money is issued, which itself increases the stock of debt. The collateral for this debt is continuous economic growth, which is itself dependent on growing supplies of energy. Should growth fail for an extended period, the financial system may implode, compounding the economic adversity. In the medium term, an economic recession and/or investor confidence crash would reduce global demand for oil and – somewhat perversely – result in the oil price falling again. This in turn could stimulate a partial economic recovery, only for another price spike to be triggered and the cycle to repeat itself. In the long term, the world faces a virtually endless sequence of supply-side oil shocks on the down-slope of the Hubbert curve. Thus we can reasonably expect a rising oil price trend due to cumulative shocks along with greater volatility as a result of economic and political fallout. Certainly, efforts will be made to conserve oil (and energy more generally), and there will be heightened efforts to find substitutes for depleting oil. However, it will take many years – if not decades – to replace the vast infrastructure that currently relies on oil. The problem is that economic conditions will be far less conducive to such investment after Peak Oil as a result of less energy being available, rising costs, and the business environment being characterised by greater volatility and uncertainty. Given the combination of repeated supply-side oil shocks and the likelihood of a major stock market crash, a prolonged economic depression is a distinct possibility if no mitigating action is taken, or it is begun too late. The US Department of Energy commissioned a report on Peak Oil by Robert Hirsch et al (2005: 4), who concluded that: “The peaking of world oil production presents the US and the world with an unprecedented risk management problem. As peaking is approached, liquid fuel prices and price volatility will increase dramatically, and, without timely mitigation, the economic, social, and political costs will be unprecedented. Viable mitigation options exist on both the supply and demand sides, but to have substantial impact, they must be initiated more than a decade in advance of peaking.”

Page 13 of 139

Miami Institute 08

Ethanol

1AC- Energy Bubbles
OIL DEPENENCE INSURES A HARD LANDING FROM THE RECESSION- IT’S AS BAD FOR THE ECONOMY AS A TERRORIST ATTACK. Mark Clayton, Journalist, “Oil Shock 2?” Christian Science Monitor, May 12, 2008, lexis, accessed 5/25/08. While many energy-security experts worry about a terrorist attack that suddenly crimps global oil supplies and hammers the US economy, Dr. Wescott and other experts say a terror attack is hardly the only, or even the worst, oil threat the nation now faces. "What we are seeing today is more of a slow-motion, rolling oil crisis rather than a sharp shock, yet ultimately we end up with the same sorts of impacts [as a terror attack]," says Wescott, now president of Keybridge Research, a Washington economic-consulting firm. Unlike the 1970s, when an oil embargo left Americans waiting in long lines at gasoline stations and paying higher prices, today's oil crisis has been stealthy. Its economic impact has been masked by consumers tapping credit cards and home equity to cover the rising cost of energy and some consumer goods. "We're having a replay of the 1970s without the Arab oil embargo part, so it's been hard for many people to see," says Amy Myers Jaffe, an energy scholar at the Baker Institute at Rice University in Houston. Even with US airlines cutting flights and SUV sales now tanking, the effects of expensive oil on the American family could be stark, Wescott's report says. In 2003, with oil approaching $40 per barrel, the average US family spent about $1,900 (4.8 percent of its income) on natural gas, heating oil, and gasoline. But today at the $120 per barrel level, a family will spend about $6,000 a year or about 15 percent of total annual income, Wescott's report predicts. Compared with the oil crises of the 1970s, the US paradoxically is in a bit better, yet also worse, position. The good news is the US economy is less energy intensive using only about half the energy it did in the 1980s to produce a dollar of economic growth. That should make it more resilient. But the bad news is that imported oil has risen to about 12 million barrels a day, about 60 percent of the 21 million barrels the US consumes daily. That financial drain at $120 per barrel is jamming the brakes on the US economy and inflating the trade deficit, economists agree. "The question now isn't whether we're going into recession, it's whether there will be a soft landing ... or we have a hard landing," Ms. Jaffe says.

Page 14 of 139

Miami Institute 08

Ethanol

1AC- Energy Bubbles
Economic collapse will cause extinction
Bearden
00,
Director
of
Association
of
Distinguished
American
Scientists


[T.
E.,
“The
Unnecessary
Energy
Crisis:
How
to
Solve
It
Quickly,”
Space
Energy
Access
Systems,

 http://www.seaspower.com/EnergyCrisis‐Bearden.htm]
bg


History
 bears
 out
 that
 desperate
nations
take
desperate
actions.
Prior
to
 the
 final
 economic
collapse,
the


stress
 on
 nations
 will
 have
 increased
 the
 intensity
 and
 number
 of
 their
 conflicts,
 to
 the
 point
 where
 the
 arsenals
 of
 weapons
 of
 mass
 destruction
 (WMD)
 now
 possessed
 by
 some
 25
 nations,
 are
 almost
 certain
 to
 be
 released.

As
an
example,
suppose
a
starving
North
Korea
launches
nuclear
weapons
upon
Japan
 and
South
Korea,
including
U.S.
forces
there,
in
a
spasmodic
suicidal
response.
Or
suppose
a
desperate
China
—
whose
long‐ range
 nuclear
 missiles
 (some)
 can
 reach
 the
 United
 States
 —
 attacks
 Taiwan.
 In
 addition
 to
 immediate
 responses,
 the
 mutual
 treaties
 involved
 in
 such
 scenarios
 will
 quickly
 draw
 other
 nations
 into
 the
 conflict,
 escalating
 it
 significantly.
 Strategic
 nuclear
 studies
 have
 shown
 for
 decades
 that,
 under
 such
 extreme
 stress
 conditions,
 once
a
few
nukes
are
 launched,
adversaries
and
potential
adversaries
are
then
compelled
to
launch
on
perception
of
preparations
by
one's
 adversary.

The
real
legacy
of
the
MAD
concept
is
this
side
of
the
MAD
coin
that
is
almost
never
discussed.
Without
effective
defense,
 the
only
 chance
a
nation
has
to
survive
at
all
is
to
launch
immediate
full‐bore
pre‐emptive
strikes
and
try
to
take
 out
 its
 perceived
 foes
 as
 rapidly
 and
 massively
 as
 possible.
 As
 the
 studies
 showed,
 rapid
 escalation
 to
 full
 WMD
 exchange
 occurs.
Today,
a
great
percent
of
the
WMD
arsenals
that
will
be
unleashed,
are
already
on
site
within
the
United
States
 itself.
 The
 resulting
 great
 Armageddon
 will
 destroy
 civilization
 as
 we
 know
 it,
 and
 perhaps
 most
 of
 the
 biosphere,
at
least
for
many
decades.

BIOFUELS INSULATE THE US ECONOMY FROM OIL SHOCKS. Bruce E. Dale, Professor of Chemical Engineering at Michigan State University, “Impacts of Cellulosic Ethanol on the Farm Economy,” in A HIGH GROWTH STRATEGY FOR ETHANOL, 2006 available online at http://www.aspeninstitute.org/atf/cf/%7BDEB6F227659B-4EC8-8F84-8DF23CA704F5%7D/EEEethanol3.pdf, accessed 5/20/08. As a full scale U. S. cellulosic ethanol industry takes hold and grows, it will transform our economy in at least two ways. First, the domestic fuels and chemicals industry will be revitalized, with many new jobs being created and new wealth generated. Given the wide distribution and bulky nature of biomass resources these new jobs and new wealth will largely be produced in rural America, rather than near oil production/importing sites on the coast. Second, the entire U. S. economy will benefit by a strengthened fuels and chemicals sector. We will be able to retain more of our fuel dollars at home and our economy will be much better insulated from shocks due to high petroleum prices and uncertain availability.

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Miami Institute 08

Ethanol

1AC- Energy Bubbles
PUBLIC INVESTMENT WILL STABILIZE OUR ECONOMY- ESCAPING THE CYCLE OF BUBBLES THAT WE’RE IN NOW. Sherle R. Schwenninger, senior fellow at the World Policy Institute, “A Goldilocks World Economy?” World Policy Journal Winter 2007, available online at http://www.newamerica.net/publications/articles/2007/a_goldilocks_world_economy_5374, accessed 5/20/08. Increased public investment in the United States must be one of the pillars of any transition out of the current bubble economy. Public investment is the most effective way to increase both demand and investment at the same time. If, in spite of low interest rates or low inflation, companies will not commit to more investment spending because of weak demand or uncertainty, then the best way to jump-start more investment is to do so directly by increasing public investment outlays. Such investment would also have the advantage of creating more jobs, particularly more good jobs, putting upward pressure on wages. Combined with efforts to promote greater consumption and demand abroad, a public-investment-led strategy would correct the imbalances created by successive asset bubbles and simultaneously strengthen America’s productive economy. PUBLIC INVESTMENT IN AMERICA RIGHT NOW MAKES A GOLDI-LOCKS ECONOMY POSSIBLE. Sherle R. Schwenninger, senior fellow at the World Policy Institute, “A Goldilocks World Economy?” World Policy Journal Winter 2007, available online at http://www.newamerica.net/publications/articles/2007/a_goldilocks_world_economy_5374, accessed 5/20/08. A slowdown in U.S. consumption as a result of a correction in the housing market creates some dilemmas for policymakers who seem to have a limited understanding of macroeconomic policy in an abundant economy. On the one hand, cutting the budget deficit without other off-setting measures, as both parties are now proposing, would only push the economy closer to an all-out post-bubble recession, which by its nature could be prolonged. On the other, responding to a deflating housing bubble with much easier monetary policy may only create another bubble, further delaying the transition to a more optimal pattern of economic growth. A more optimal economic growth path would entail an interrelated two-track strategy of increasing public spending on productive investment in the United States and expanding consumption demand abroad, especially in the large, emerging market economies where productivity growth is improving rapidly. More specifically, the first step out of the bubble cycle without falling into its weak demand and slow growth trap is not for the United States to cut its budget deficit, but to increase public investment while the surplus Asian economies and oilproducing economies increase consumption. In the short term, this combination would help sustain global economic growth while putting it on a more optimal long-term course. Increased public investment in the United States would lead to increased private investment and greater productive capacity, enabling American-based companies to take advantage of rising export demand for their goods and services. It would also lead to rising wages, enabling households to reduce their debt burdens without cutting back on consumption. A combination

of increased investment and rising wages at home with consumption-led economic growth abroad would create the true Goldilocks economy: not too hot, not too cold, but just rig.

Page 16 of 139

Miami Instit.
PLAN

 Plan:
 The
United
States
federal
government
should
establish
an
insurance
program
for
investors
in
 the
production
of
cellulosic
ethanol.




Page 17 of 139

Miami Instit.
1AC – SOLVENCY
SOLVENCY: THE PLANS INCENTIVE IS CRITICAL TO FOSTER MARKET CONFIDENCE AND SPUR FINANICAL INVESSTMENT – THIS IS THE SINGLE LARGEST IMPEDIMENT TO THE DEVELOPMENT OF CELLULOSIC ETHANOL

Monsma, 2006 (David W., Rapporteur and Associate Director of the Program on Energy at the Aspen Institute, A
High Growth Strategy For Ethanol, Introduction, Available via the Aspen Institute, http://www.aspeninstitute.org/atf/cf/{DEB6F227-659B-4EC8-8F84-8DF23CA704F5}/EEEethanol1.pdf)

New technology to produce ethanol from cellulosic feedstocks points the way to a new generation of ethanol plants. The production chain consists of feedstock production, feedstock pretreatment, enzymatic hydrolysis, and fermentation. To make ethanol from cellulose competitive with gasoline, research is needed to improve the efficiency and economics of each portion of this chain and to integrate the chain. Emphasis therefore must be placed on the need to reduce costs by a combination of focused research and process demonstration at scale. On top of fully funding R&D, a good deal of which is already authorized, financial investment and large scale commercial plants are needed to convert switchgrass and other cellulosic biomass to ethanol. The financial investments and market confidence needed to construct and pilot-test commercially viable biorefineries probably presents the most challenging single impediment to the new industry. Government assistance, in the form of loan guarantees or tax incentives for the first commercial plants, is needed to expedite the development of cellulosic ethanol production.

SPECIFICALLY, A FEDERAL INSURANCE PROGRAM IS CRITICAL TO MITIGATE THE FINANCIAL RISKS INVOLVED IN THE COMMERCIALIZATION OF CELLULOSIC TECHNOLOGY

Gaffigan, 2007 (Mark, U.S. General Accountability Office Acting Director for Natural Resources and the
Environment, “Biofuels: DOE Lacks a Strategic Approach to Coordinate Increasing Production With Infrastructure Development and Vehicle Needs”, GAO Report to Congressional Requesters, June, http://www.gao.gov/new.items/d07713.pdf)

A third option for increasing biofuel production is to provide support for the development of cellulosic ethanol production technology. This could involve ensuring continued funding for research
and development, increasing federal cost-sharing efforts to reduce risk to producers, and adding incentives for the production of biomass feedstocks. These policy options have the advantage of potentially resulting in a huge increase in cost-competitive biofuel production. The disadvantages are that such policies could require significant federal expenditures and there are no guarantees as to when or if cost-competitive cellulosic ethanol will be produced. According to the NREL officials with whom we spoke, DOE’s research and development efforts for cellulosic ethanol are currently funded and on schedule toward the goal of making production commercially viable by 2012.25 However, they said that technological uncertainties remain and it is therefore essential that research funding continue to meet With this goal.26 According to NREL, the primary nontechnological barrier to expanding

cellulosic ethanol production is the perceived financial risk, making it difficult for companies to secure funding to build facilities. To initially reduce financial risk, DOE provided grants in 2002
totaling $80 million dollars to fund six small-scale cellulosic ethanol biorefineries that support the technology in the demonstration phase. Then, in February 2007, DOE announced it would give $385 million in grants to six cellulosic ethanol biorefineries over a 4-year period to help the industry develop larger-scale pilot production facilities.27

Another measure that would help producers to mitigate the financial risks of full-scale commercial production is a federal insurance program that would pay cellulosic ethanol producers a settlement if they did not achieve their first-year production goals. According to one NREL official with whom we spoke, the advantage of an insurance program is that it can be based on well-defined performance metrics that limit potential government payments to specific outcomes, as opposed to the potentially larger losses from defaults under a loan
guarantee program for producers. Another option suggested by NREL is a program to provide direct payments to growers of cellulosic feedstock, such as switchgrass, in order to ensure that an adequate supply of those feedstocks is available when cellulosic ethanol plants begin full-scale production. The insurance and grower payment programs both have the potential advantage of helping to increase initial cellulosic ethanol production but could end up being costly.

Page 18 of 139

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1AC - Solvency

AND – THIS FEDERAL INSURANCE PROGRAM WILL OVERCOME THE FINANICAL BARRIERS TO THE COMMERCIALIZATION OF CELLULOSIC TECHNOLOGY ENSURING ITS EFFECTIVE DEPLOYMENT

Torkelson, 2006 (Roy, Independent Contractor and Director of JP Morgan in New York, “Commercialization of
Cellulosic Ethanol Facilities: A Financial Perspective”, A High Growth Strategy For Ethanol, http://www.aspeninstitute.org/atf/cf/{DEB6F227-659B-4EC8-8F84-8DF23CA704F5}/EEEethanol6.pdf)

The US Department of Energy expends significant amounts of government money conducting extensive research into biomass technologies in cost sharing arrangements with private sector industries and at National Laboratories. A high level of frustration has been mounting over the inability to deploy proven research and development biomass technologies into the commercial markets. Among the non-technical barriers to successful deployment is the financial marketplace, which has great difficulty in accepting the real or perceived risks of commercializing a new technology. Financial barriers may in fact be the most challenging of the non-technical barriers to address. Although capital is critical to accomplishing the R&D for a biomass technology, those costs are miniscule compared to the financial requirements for testing and construction. Figure 1 was prepared by the Office of Biomass Program (OBP) in the U.S. Department of Energy (DOE) to illustrate the increasing financial burdens that confront a project developer in deploying a new biomass technology. OBP expanded its efforts to address the deployment problem by bringing together a number of finance, policy and industry experts to discuss the barriers from their points of reference and also to suggest ways to improve deployment success. The following represents the collective thinking of the group regarding the financial barriers facing developers of new technologies. Financially, the most critical stages of the deployment process are pilot-testing, and building and operating commercially viable demonstrations. At the pilot-testing stage developers typically try to validate the technology. However, at the demonstration stage the developer wants to prove technology feasibility and profitability in a realistic setting. Ideally, the demonstration should indicate that the technology could cover its capital costs and provide a moderate margin of return on investment. However, during these stages capital requirements are high while investment is relatively low. Typically when constructing a commercially viable demonstration, capital costs are uncertain and contingency funds need to be available because the technology is not proven. At this stage investors are skeptical of the technology’s market viability because it has yet to be proven. In addition, investors typically prefer a multitude of tests to ensure that the given technology will work under a variety of circumstances. Continued… Another feasible solution would be for DOE to create a last resort risk mitigation pool for biomass technology developers, looking to other successful Federal programs, like the Transportation Infrastructure and Innovation Act (TIFIA), as a model. This would allow DOE to provide incremental financial guarantees during the commissioning and performance acceptance stages of the project through the first year of operation, thereby enabling developers to raise the necessary capital to proceed with development of their new biomass technology. This program could only be accessed when all other remedies have been exhausted and when the corrective action will result in a successful commercial launch. It was felt that a risk mitigation pool coupled with a successful demonstration project would be adequate to ensure successful deployment of the technology. However, a risk mitigation pool can also be used with a
loan guarantee program to further accelerate technological deployment. DOE would assess the level of severity of a given deployment barrier, assess the worthiness of the recipient, and issue financing. The developer would be required to pay a fee for the insurance guarantee including repayment of any draw on that insurance policy by a given period of time (typically following deployment). The money from the insurance premiums would be recycled back into the insurance program. Developers who apply to access the insurance program would first have to be approved by a team of independent engineers who determine whether the technical problem was unavoidable and then outline a cost estimate. Assistance would only be provided after a solution has been identified and reviewed by independent engineers. Due to the considerable time, money and effort already invested in most of these projects, it is in the best interest of all parties (entrepreneurs, investors, contractors, markets, etc.) to overcome these hurdles and deploy these technologies. These

suggested federal insurance guarantees should allow developers to successfully deploy their Page 19 of 139

Miami Instit.
product and begin realizing revenue streams that not only support operations, pay debt service but also provide solid equity returns to their investors.

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1AC – SOLVENCY
AND – THE PLANS INSURANCE PROGRAM IS AN ALTERNATIVE ENERGY INCENTIVE THAT WILL INITIATE THE TRANSITION TO CELLULOSIC ETHANOL

Greer, 2005 (Diane, Contributing Editor to Biocycle, “Creating Cellulosic Ethanol: Spinning Straw Into Fuel”,
Biocycle, Enews Bulletin, April, http://www.harvestcleanenergy.org/enews/enews_0505/enews_0505_Cellulosic_Ethanol.htm)

The arguments in favor of cellulosic ethanol as a replacement for gasoline in cars and trucks are compelling. Cellulosic ethanol will reduce our dependence on imported oil, increase our energy security and reduce our trade deficit. Rural economies will benefit in the form of increased incomes and jobs. Growing energy crops and harvesting agricultural residuals are projected to increase the value of farm crops, potentially eliminating the need for some agricultural subsidies. Finally, cellulosic ethanol provides positive environmental benefits in the form of reductions in greenhouse gas emissions and air pollution. There is a growing consensus on the steps needed for biofuels to succeed: increased spending on R&D in conversion and processing technologies, funding for demonstration projects and joint investment or other incentives to spur commercialization. "If you do not do all three of these pieces, the effort is likely to stall," said Greene. "The challenge is to be really focused and make the commitment to make biofuels a part of our economy. We need to make these technologies work." There is also agreement on one of the main factors impeding the development of biofuels - inadequate government funding. "We are grossly under investing in this area," says Dechton. "We are piddling along at 30 or 40 million dollars per year. This is a national security issue." Sheehan agrees, adding "the other problem is over the last several years Congressional earmarking has been horrendous. It is splintering critical resources, as a result effectiveness is way down. We do not have well aligned, consistently directed R&D effort." The "Growing Energy" report calls for $2 billion in funding for cellulosic biofuels over the next ten years, with $1.1 billion directed at research, development and demonstration projects and the remaining $800 million slated for the deployment of biorefineries. Other advocated subsidies and incentives for the industry include production tax credits, bond insurance for feedstock sellers and biofuels purchasers and efficacy insurance. "We would like to see private insurance but lacking private sector involvement, government should offer the insurance," said Greene. "The idea has two features, the amount of money available goes down over time, so by 2015 the industry is ready to stand on its own two feet and, second the dollars available to developers is in a menu format. We will let them pick subsidies that work best for their product." Given sufficient investment in research, development, demonstration and deployment, the report projects biorefineries producing cellulosic ethanol at a cost leaving the plant between $.59$.91 per gallon by 2015. The price range is dependent upon plant scale and efficiency factors. At these prices, biofuels would be competitive with the wholesale price of gasoline. In the past, discussions regarding ethanol as a potential replacement for gasoline have centered on the availability of suitable land in addition to a feed versus fuel debate. Technological and process advances coupled with the promise of biorefineries are allowing us to refocus the debate. Scenarios exist where well directed public policies emphasizing biofuels investment and incentives in addition to fuel efficiency could promote a transition to cellulosic ethanol. Given the right policy choices, America's farmers could one day be filling both our refrigerators and our gas tanks.

Page 21 of 139

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1AC – SOLVENCY
AND – COMMERCIALIZATION IS CRITICAL TO JUMPSTART CELLULOSIC ETHANOL TECHNOLOGY

Wyman, 2007 (Charles E., Chemical and Environmental Engineering Department, Center for Environmental
Research and Technology, Bourns College of Engineering, University of California, “”What Is (And Is Not) Vital to Advancing Cellulosic Ethanol", Science Direct, February 22, http://www.sciencedirect.com/science?_ob=ArticleURL&_udi=B6TCW-4N3X0CY1&_user=10&_rdoc=1&_fmt=&_orig=search&_sort=d&view=c&_acct=C000050221&_version=1&_urlVersion=0&_u serid=10&md5=ecec6dd74654d4b640e8571c6c2682e9)

Cellulosic ethanol has tremendous potential for unique and powerful benefits, but none will be realized until it is commercialized. Commercial application will also dramatically reduce the cost of existing technology through the learning curve effect that has substantially lowered ethanol production costs in Brazil and the USA [28]. It cannot be overemphasized that the operation of a process for 24 hours a day, 7 days a week, and close to 365 days per year presents constant opportunities and incentives for improvement, debottlenecking and innovation that cannot be duplicated in the laboratory or through paper studies. Thus, not only is commercialization vital to realizing the tremendous benefits of cellulosic ethanol, it is invaluable to powerful learning curve improvements

Page 22 of 139

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/



Government financing is key to widespread use of cellulosic ethanol
Julie
Sibbing,
National
Wildlife
Federation,
Soil
and
Water
Conservation,
May‐June
2007,
p.
48A

 But
cellulosic technologies have not yet been deployed at commercial scale in the
United
States.
Cellulosic
ethanol
 will
rely
on
the
development
of
enzymes
that
can
break
down
the
cellulose
in
plant
materials
to
starch,
which
can
be
 fermented
into
ethanol.
While
there
are
significant
investments,
both
public
and
private,
into
developing
this
 enzymatic
technology,
nobody
knows
when
these
enzymes
will
be
available.
It could take
as
little
as
2
years
or
as
 long
as
15 years
without government leadership
to move the technology more quickly to commercialization.
There
 are
other
promising
technologies
for
utilizing
biomass
as
well:
pyrolysis,
gasification,
and
various
thermochemical
 processes.
Yet
these are receiving very little public investment. We currently have the unprecedented chance to develop a new, sustainable energy future for our country. While
biofuels
are
only
part
of
this
future,
they
need immediate and significant policy attention and public investment to set them on the right path.
Since
corn
ethanol
and
 soybean
biodiesel
are
what
we
have
available
for
biofuels
today
and
can
bring
about
modest
net
greenhouse
gas
 reductions,
we
must
inject
some
common
sense
into
the
debate
and
commit
to
sustainable
corn
ethanol
expansion
 targets,
along
with
increased
spending
on
conservation
programs
and
reasonable
safeguards
to
protect
the
 conservation
gains
we
have
achieved
over
the
past
several
decades.



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Cellulosic ethanol key to prevent higher corn prices

PG,
Progressive
Grocer,
4‐20‐2007,
Lexis

WASHINGTON,
D.C.
- With increased demands on corn from the ethanol industry, Congress and the Bush Administration should consider tax incentives
and
other
legislative
vehicles
to
support
energy‐based
opportunities
for
animal
agriculture
and
 minimize the adverse affects of rising input costs
on
meat
and
poultry
packers
and
processors,
said
AMI
President
and
 CEO
J.
Patrick
Boyle
in
testimony
submitted
this
week
to
the
House
Committee
on
Ways
and
Means.
Boyle
said
that
 dramatically increased demand for corn has pressed market forces to demand higher feed prices.
As
a
result,
animal
agriculture
 producers
are
considering
alternatives
to
their
feeding,
nutrition,
and
dietary
regimen,
which
in
turn
impacts
meat
 and
poultry
quality,
consumer
offerings,
livestock
and
poultry
farm
efficiency,
and
the
management
of
livestock
and
 poultry
operations.
Boyle urged Congress to
take
four
key
actions:
‐
Expand research in
ethanol
byproduct
safety,
quality,
 and
usability
and
renewable energy technologies, such as
renewable
diesel,
biogas
and
cellulosic.


Corn-based ethanol causes food price spikes – cellulosic is best
Lt.
Col
Amidon,
USAF,
Joint
Force
Quarterly,
10‐1‐2005,
n.
39,
p.
68

Corn is a poor choice for ethanol feedstock since it is the most irrigation-and fertilizer-intensive crop grown
in
the
United
States,
 and corn used for ethanol drives cattle feed prices higher, creating
hidden
costs at the grocery store.
Although
a
nascent
corn


ethanol
industry
has
developed,
future

expansion
should
be
discouraged
through
a
removal
of
the
tax
regime.
 Unsubsidized
corn
ethanol
actually
costs
$2.24
per
gallon
to
produce,
making
it
uneconomical
except
in
times
of
very
 high
oil
prices.
(13)



The
biorefinery
and

cellulosic
ethanol.

Instead of valuable corn, the biorefinery produces ethanol using
the
starches
and
cellulose present in agricultural waste
and
byproducts
such
as
corn
stalks,
rice
straw,
paper
mill
 waste,
recycled
urban
waste,
and
dedicated
woody
stemmed
crops.
(14)
Many of these sources
of

cellulosic
ethanol

 are
considered
negative-cost feed stocks, meaning
they
have
no
food
value
and
farmers must pay for their disposal.
This
 gives

cellulosic
ethanol

a
much
higher
net
energy
balance
than
corn‐based
ethanol.
Studies
at
candidate
biorefinery
 sites
in
Indiana
and
Nebraska
found
that
collocating
ethanol
biorefineries
with
existing
power
plants
would
allow
 production
for
$1.05/gallon
to
$1.60/gallon
depending
on
the
biomass
selected.

Cellulosic
ethanol

offers
great
 promise
for
rural
areas
that
have
seen
considerable
depopulation
due
to
modern
farming
methods.


Page 24 of 139

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AT: Cellulosic Increase Prices
Cellulosic doesn’t increase food prices
Youmna
Sakr,
Contributing
Writer,
Risk
Management,
4‐1‐2007,
Lexis

Cellulosic ethanol is different from corn-based ethanol in that itis produced from the cellulose of plant material derived from agricultural waste such as corn stalks and wood chips.
While
it
is
still
under
development,
it
is
anticipated
that
cellulosic


ethanol
will
require
less
energy
to
produce
than
corn‐based
ethanol,
and
as
a
fuel,
will
result
in
far
less
carbon
 dioxide
emissions
with
levels
85%
less
than
gasoline
and
25%
less
than
traditional
ethanol.
The
reduced
emissions
 make
it
less
susceptible
to
high
pollution
taxes
as
37
governors
are
prepared
to
impose
measures
to
cut
the
carbon
 content
of
fuels.
And since cellulose is not edible, there is little to no effect on food prices.


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ADD-ON: AMAZON DEFO
Cellulosic ethanol solves Amazonian deforestation – species loss alone causes planetary extinction
Lester
Brown,
Earth
Policy
Institute,
Plan
B
2.0
–
Rescuing
A
Planet
Under
Stress
And
A
Civilization
In
Trouble,


2006,
p.
35‐6

Aside from the prospective use of cellulose, current
and
planned
ethanol-producing operations use food crops such
as
 sugarcane,
sugar
beets,
corn,
wheat,
and
barley.
The
United
States,
for
example,
in
2004
used
32
million
tons
of
corn to produce
3.4
billion
gallons
of
ethanol.
Although
this
is
scarcely
12
percent
of
the
huge
U.S.
corn
crop,
it
is
enough
to
 feed
100
million
people
at
average
world
grain
consumption
levels.
In
an
oil‐short
world,
what
will
be
the
economic
 and
environmental
effects
of
agriculture's
emergence
as
a
producer
of
transport
fuels?
Agriculture's
role
in
the
global
 economy
clearly
will
be
strengthened
as
it
faces
a
vast,
virtually
unlimited
market
for
automotive
fuel.
Tropical
and
 subtropical
countries
that
can
produce
sugarcane
or
palm
oil
will
be
able
to
full
exploit
their
year‐round
growing
 conditions,
giving
them
a
strong
comparative
advantage
in
the
world
market.

With biofuel production spreading,
the
 world
price
for
oil
will,
in
effect,
become
a
support
price
for
farm
products.
If
food
and
feed
crop
prices
are
weak
and
 oil
prices
are
high,
commodities will go to fuel producers.
For
example,
vegetable
oils
trading
on
European
markets
 on
any
given
day
may
end
up
in
either
supermarkets
or
service
stations.
The
risk
is
that
economic pressures to clear land for expanding sugarcane production in the Brazilian
cerrado
and
Amazon basin
and
for
palm
oil
plantations
in
 countries
such
as
Indonesia
and
Malaysia
will pose a major new threat to plant and animal diversity.
In
the
absence
 of
governmental
constraints,
the rising price of oil could quickly become the leading threat to biodiversity, ensuring that the wave of extinctions now under way does
indeed
become the sixth great extinction.


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Inherency: Tech hurdle
Engineering hurdles preclude SQ cellulose commercialization.
David Rotman, Editor of Technololgy Review, “The price of biofuels: making ethanol from corn is expensive. Better biofuels are years away from the gas tank. Farmers are reluctant to change their practices. But do we really have any alternative to biofuels?” Technology Review, Vol. 111 No. 1, January 1, 2008. Indeed, announcements about new cellulosic-ethanol plants tend to obscure the fact that the technology is still not economically viable. Gregory Stephanopoulos, a professor of chemical engineering at MIT,describes himself as "very optimistic" about the future of biofuels.But even he is quick to add that it will take another 10 years to optimize production processes for cellulosic biofuels. Among myriad other problems, he says, is the need for more robust and versatile microbes to make them. In a small conference room outside his office, Stephanopoulos takes out a pencil and paper and begins to draw a series of circles. You can imagine, he says, a biorefinery surrounded by sources of different types of biomass. He connects the circles at a central point, making lines like spokes on a wheel. You could, he goes on, imagine pipelines from these sources. What if the biomass were treated and piped tothe biorefinery as a slurry? Stephanopoulos would be the first to acknowledge that such an ambitious infrastructure would take years to put in place, and that the idea raises numerous technical and engineering questions

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Inherency: Investment Weak
Current biofuel markets are under-invested. We need rapid commercialization.
Tim Sklar, Sklar & Associates, “Obstacles bedevil EISA's RFS biofuels mandate,” Oil & Gas Journal, March 17, 2008. Although EISA may have accurately projected a need for 36 billion gal of renewable biofuels by 2022, its dependence on private enterprise to fill this need is unrealistic for several reasons: * The renewable fuels industry is fragmented, with only modest participation by large corporate interests. Biodiesel currently is being produced from soybean oil in 20 biodiesel processing plants, owned by small corporations. A recent National Biodiesel Board survey indicated that a number of small biodiesel companies were raising equity for about 30 new biodiesel plants. Soybean oil used by these plants is obtained from 60 crushing plants in 21 states. Outside of a few growers' cooperatives, ownership is concentrated with major agribusiness giants, such as Archer Daniels Midland, Bunge, and Cargill. These crushing operations obtain soybeans from local soybean growers' cooperatives. There are more than 300,000 farms in the US that grow soybeans on 75 million acres, most of them alternating with corn in a 50:50 rotation. About 75% of the soybean crop is grown in the Upper Midwest and Midwest, with the balance coming from the Southeast and Southwest. Crushers in these regions produce about 75% of the soybean oil and soybean meal. Vegetable oil produced from other oilseed crops such as canola is not now being used in making biodiesel. Outside of a few small cellulosic ethanol plants that are just becoming operational on a commercial scale, all of the fuel ethanol is now being produced in 160 corn ethanol processing plants. As with biodiesel, most of these processing plants are operating in the Corn Belt states and are owned by small companies or growers' cooperatives. The companies active in developing cellulosic ethanol plants also are mostly small companies. But a few major oil companies and paper companies are now participating in cellulosic ethanol development projects. * With the exception of processes now used to convert cornstarch into ethanol, technologies for producing advanced renewable fuels are still in the research and development or pilot plant stage. * There are only a handful of plants currently being developed to produce cellulosic ethanol on a commercial scale. One is a plant in Japan that has been producing commercial quantities of cellulosic ethanol from wood chips and wood waste for the past 2 years. Another is a project, well under way, in which a paper mill is being converted into a biofuels production facility using wood chips and black liquor as feedstock. In addition, two funded projects are emerging from pilot operations and are being scaled up to produce cellulosic ethanol from municipal solid waste. And there is an exciting project under way in which a 2-stage thermal process is being used to convert forest residue and wood waste into cellulosic ethanol on a commercial scale. However, there is still a long way to go before the RFS mandate can be met, as additional R&D of biofuels processes remain in progress to perfect and improve process efficiency, obtain higher biofuels yields, and make a wider range of advanced biofuels from the cellulosic waste.

Despite large cellulosic investments, key parts of an alcohol economy are underinvested because of perceived market risk.
Tim Sklar, Sklar & Associates, “Obstacles bedevil EISA's RFS biofuels mandate,” Oil & Gas Journal, March 17, 2008. Barriers to investment Further, there are a number of perceived or actual barriers to attracting the amount of investment needed to this infant industry: * The market for new advanced biofuels, such as butanol and dimethyl ether as gasoline replacements, face market resistance. In the case of recently introduced biofuels such as biodiesel and E85, the oil industry is still not fully convinced that it should be making substantial investments that will be required in building biofuels processing plants, in establishing new biofuels distribution networks, or in undertaking new biofuels marketing campaigns. * Growers of soybeans have not yet been convinced to abandon wheat or corn as a second crop in order to produce canola or other oil seed crops in the hope that biodiesel producers will expand and create a demand for vegetable oil that does not now exist. Likewise, crushers are reluctant to increase capacity to support yet-tobe-planted oilseed crops or to produce vegetable oil for yet-to-be-built biodiesel plants. * Grain elevator operators and farm cooperatives that generate large quantities of agricultural waste are not eager to organize and invest in joint ventures for collection, preprocessing, and storage operations in anticipation of attracting investors to build new agriwaste-to-ethanol plants, * Pulp and paper mills that have access to large amounts of pulp wood and wood waste are not fully convinced that they should produce cellulosic ethanol or other advanced fuels, as they have never been in the fuels business. They also are reluctant to upset the cost they now pay for wood and wood waste, or to modify their pulp mill operations if it could in any way adversely impact their paper-making operations. * And no one is running out to build biofuels plants at a cost of $125-275 million each.

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Inherency: EISA Fails

ABJ

Without the plan- RFS mandates will fail because of insufficient production.
Tim Sklar, Sklar & Associates, “Obstacles bedevil EISA's RFS biofuels mandate,” Oil & Gas Journal, March 17, 2008. Other problems with RFS The RFS mandate does little to meet EISA's legislative goal of providing energy independence and energy security, as the 36 billion gal/year renewable fuel target is designed to provide less than 6% of the nation's transportation fuel needs in 15 years. Nor does the RFS mandate do much to reduce greenhouse gas emissions. Today, corn ethanol is the dominant renewable biofuel. The most optimistic assessment is that corn ethanol reduces greenhouse gasses by only 20% compared with conventional fuels. And even though cellulosic ethanol and other advanced biofuels offer higher reductions (50-60%), these fuels will not be produced in significant quantities for years, even if the RFS mandate is met. At best, advanced biofuels are expected to be 13.2% of all renewable fuels produced in 2012, increasing to 37.5% in 2017 and 58.3% in 2022. This is only 3.5% of all transportation fuels to be consumed in the US in 2022. On top of the other deficiencies associated with EISA, the RFS mandate is probably not enforceable, as the mechanism for enforcing it is weak and ill-defined. The responsibility for seeing that mandates are met is left to the US Environmental Protection Agency administrator, who has to negotiate with state governments...and grant exceptions when mandates prove impossible to meet. At best, EISA provides political cover to politicians. The added biofuels to be produced under the RFS mandates would be only a small part of the energy independence solution EISA seeks to address.

Page 29 of 139

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Inherency: No Cellulose Now
No commercial cellulose now- startup risks stall advance.

ABJ

David Rotman, Editor of Technololgy Review, “The price of biofuels: making ethanol from corn is expensive. Better biofuels are years away from the gas tank. Farmers are reluctant to change their practices. But do we really have any alternative to biofuels?” Technology Review, Vol. 111 No. 1, January 1, 2008. Since the oil crisis of the 1970s, when the price of a barrel of petroleum peaked, chemical and biological engineers have chased after ways to turn the nation's vast reserves of "cellulosic" material suchas wood, agricultural residues, and perennial grasses into ethanol and other biofuels. Last year, citing another of President Bush's goals--reducing U.S. gasoline consumption by 20 percent in 10 years--the U.S. Department of Energy (DOE) announced up to $385 million in funding for six "biorefinery" projects that will use various technologies to produce ethanol from biomass ranging from wood chips to switchgrass. According to a 2005 report by the DOE and the U.S. Department of Agriculture, the country has enough available forest and agricultural land to produce 1.3 billion tons of biomass that could go toward biofuels. Beyond providing a vast supply of cheap feedstock, cellulosic biomass could greatly increase the energy and environmental benefits of biofuels. It takes far less energy to grow cellulosic materials than to grow corn, and portions of the biomass can be used to help powerthe production process. (The sugarcane-based ethanol produced in Brazil also offers improvements over corn-based ethanol, thanks to the crop's large yields and high sugar content.) But despite years of research and recent investment in scaling up production processes, no commercial facility yet makes cellulosic ethanol. The economic explanation is simple: it costs far too much to build such a facility. Cellulose, a long-chain polysaccharide that makes up much of the mass of woody plants and crop residues such as cornstalks, is difficult--and thus expensive--to break down. Several technologies for producing cellulosic ethanol do exist. The cellulose can be heated at high pressure in the presence of oxygen to form synthesis gas, a mixture of carbon monoxide and hydrogen that is readily turned into ethanol and other fuels. Alternatively, industrial enzymes can break the cellulose down into sugars. The sugars then feed fermentation reactors in which microorganisms produce ethanol. But all these processes are still far too expensive to use commercially. Even advocates of cellulosic ethanol put the capital costs of constructing a manufacturing plant at more than twice those for a corn-based facility, and other estimates range from three times the cost to five. "You can make cellulosic ethanol today, but at a price that is far from perfect," says Christopher Somerville, a plant biologist at the University of California, Berkeley, who studies how cellulose is formed and used in the cell walls of plants.

Page 30 of 139

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Inherency: No Cellulose Now

ABJ

Lack of government support means no cellulose for over a decade – placing more emphasis on cellulose reverses this trend
Runge
and
Senauer
2007,
C.
Ford
Runge
is
Distinguished
McKnight
University
Professor
of
Applied
Economics
and
Law
 and
Director
of
the
Center
for
International
Food
and
Agricultural
Policy
at
the
University
of
Minnesota.
Benjamin
 Senauer
is
Professor
of
Applied
Economics
and
Co‐director
of
the
Food
Industry
Center
at
the
University
of
Minnesota,
 May/June
2007,
“How
Biofuels
Could
Starve
the
Poor,”
Foreign
Affiars,
Vol.
86,
Issue
3,
Ebsco
 For
now,
however,
the
costs
of
harvesting,
transporting,
and
converting
such
plant
matters
are
high,
which
means
that
 cellulose‐based
ethanol
is
not
yet
commercially
viable
when
compared
with
the
economies
of
scale
of
current
corn‐ based
production.
One
ethanol‐plant
manager
in
the
Midwest
has
calculated
that
fueling
an
ethanol
plant
with
 switchgrass,
a
much‐discussed
alternative,
would
require
delivering
a
semitrailer
truckload
of
the
grass
every
six
 minutes,
24
hours
a
day.
The
logistical
difficulties
and
the
costs
of
converting
cellulose
into
fuel,
combined
with
the
 subsidies
and
politics
currently
favoring
the
use
of
corn
and
soybeans,
make
it
unrealistic
to
expect
cellulose‐based
 ethanol
to
become
a
solution
within
the
next
decade.
Until
it
is,
relying
more
on
sugar
cane
to
produce
ethanol
in
 tropical
countries
would
be
more
efficient
than
using
corn
and
would
not
involve
using
a
staple
food.


Lowered Cost and Environmental Concerns needed to commercialize cellulosic technology
<State
Energy
Conservation
Office,
“Cellulosic
Ethanol”,
2006>
 Two things are going to push the commercialization of cellulosic technology. One is driving the cost down, which is mainly research and development; the other is that environmental concerns are increasingly entering into commercial calculations about biofuels.
Alex
Farrell,
Energy
and
Resources
Group,
UC
Berkeley

 We have what we need now to produce ethanol from cellulose. The key is to integrate the pieces into an economically competitive process and commercialize it. Joel
Cherry,
Novozymes



Finding enzyme to overcome cellulose’s resistance key to biofuel's viability.
Goho,
Alexandra,
“Cellulolytic
Enzymes,”
Technology
Review;Vol.
111
Issue
2,
p51‐54,
4p,
Mar
2008,

 The
precise
arrangement
of
cellulose
chains
within
plant
cell
walls
makes
them
highly
resistant
to
enzymatic
attack.
 The
network
of
hydrogen
bonds
both
within
and
between
chains,
plus
the
presence
of
hemicellulose
and
lignin
 polymers,
restricts
the
ability
of
cellulolytic
enzymes
to
free
the
sugar
molecules
that
compose
the
chains,
a
necessary
 step
for
biofuel
production.
Arnold
is
using
the
technique
to
build
libraries
containing
thousands
of
new
cellulase
genes.
 She
and
her
colleagues
will
then
screen
the
cellulases
to
see
how
they
act
as
part
of
a
mixture
of
enzymes.
“If
you
test
 them
simply
by
themselves,
you
really
don’t
know
how
they
work
as
a
group,”
she
says
 To
fulfill
her
ultimate
goal
of
a
superbug
able
to
feed
on
cellulose
and
produce
biofuels,
Arnold
is
working
with
James
 Liao,
a
professor
of
chemical
engineering
at
the
University
of
California,
Los
Angeles.
Liao
recently
engineered
E.
coli
 that
can
efficiently
convert
sugar
into
butanol,
a
higher‐energy
biofuel
than
ethanol.Arnold
hopes
to
be
able
to
 incorporate
her
new
enzymes
into
Liao’s
butanol
producing
microbes.
Gevo,
a
startup
cofounded
by
Arnold
and
based
 in
Denver,
CO,
has
licensed
Liao’s
technology
for
use
in
the
large‐scale
production
of
advanced
biofuels,
including
 butanol.
Overcoming
cellulose’s
natural
resistance
to
being
broken
down
is
“one
of
the
most
challenging
protein‐ engineering
problems
around,”
says
Arnold.
Solving
it
will
help
determine
whether
low
emission
biofuels
will
ever
be
 a
viable
substitute
for
fossil
fuels.


Page 31 of 139

Miami inst.

ABJ

Page 32 of 139

Miami inst.
Inherency/No Investor Confidence Now
the
lack
of
a
stable
investment
climate
dooms
current
efforts
to
incentivize
ethanol


ABJ

Blowie, 2007 (Elias, Venture Capital Specialist for Alternative Energies at Heller Ehrman LLP, “How To Turn Clean Energy Into a Powerhouse”, with Alison Freeman-Gleason and Todd Glass, Business Week Online, September 5, http://www.businessweek.com/technology/content/sep2007/tc2007094_253556.htm) One problem is that despite investor enthusiasm, the VC [Venture Capital] community traditionally looks for rapid returns. Market cycles for newer clean technologies from early development to mass deployment often have longer time frames. And while the world's ever-growing need for energy suggests global market potential, can these technologies be deployed reliably and at a scale large enough for utilities and other large sectors of the economy to adopt and use? Some suggest that a clean-tech bubble is likely, similar to the boom and bust in alternative energy in the 1970s or the Internet and telecommunications in 2000. In fact, some investors are forming funds to buy distressed properties from ethanol production on the assumption that overinvestment will lead to half-built projects on sale for pennies on the dollar. Also, available investment capital appears to be greater than the number of companies with good technology, experienced teams, and significant market potential. Despite the warning signs in certain sectors, such as ethanol, we see a clear path to developing and sustaining robust markets and businesses in energy and many other clean technologies. But the industry is at an inflection point: Will it gain real traction or end up as another fad and set of buzzwords? If we are to avoid another investment bubble where "carbon footprints" become a forgotten yardstick, we must address several private and public issues. This industry cannot be built on a system of mercurial tax incentives. Tax incentives that pop up one year, only to disappear the next, do more harm than good. The current federal investment and production tax credits are set to expire at the end of 2008. If they are not extended soon, the development and financing of most solar and wind projects in the U.S. will grind to a halt about halfway through next year because such new projects cannot be placed in service before the credits expire. A more effective tax regime would take a longer view, building an incentive window of 5 to 10 years, gradually tapering to create a stable, predictable environment for investment, development, and deployment.

no
investor
confidence
in
ethanol
now

Business Week, 2007 (January 26) But despite the feel-good rhetoric of energy independence and a more environmentally friendly future, Wall Street remains skeptical. In the days preceding Bush's speech, the shares of ETHANOL producers surged, but by Wednesday they headed down sharply, and continued the descent on Jan. 25. Aventine's stock has taken a particularly low dip. Having opened at $43 with the company's initial public offering last June, the shares have since lost more than half their value. The stock fell another 8.4%, to close at $16.24 Jan. 25 on the New York Stock Exchange. Other ETHANOL producers suffered a similar fate. Shares of VeraSun Energy (VSE), which went public last year at $30.75, fell 2.6% to close at $17.49 Jan. 25. Pacific ETHANOL (PEIX), a California-based refiner of corn-derived ETHANOL whose stock hit $44.50 last May, has fallen to $16.53. Archer Daniels Midland (ADM), the largest producer of fuel ETHANOL in the U.S., declined less than 1%, to $31.82, after having rallied 2.6% just ahead of Bush's speech. INVESTORS have been skittish about ETHANOL because they're concerned about the short-term obstacles to the industry's profitability, analysts say. "These stocks rallied ahead of the news more because of trading and gamesmanship than people investing in the long run," says Chris Shaw, an analyst at UBS (UBS) who covers ETHANOL producers Aventine, VeraSun, and Archer Daniels Midland. "[Bush's] speech suggests a strong long-term demand, but it's not clear how profitable this industry is. The most important factor long-term is that it's a commodity industry; expansion requires favorable market conditions."

Page 33 of 139

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INHERENCY/NO INVESTOR CONFIDENCE NOW
no
investor
confidence
now



ABJ

HOWELL AND MAKHLE, 2007 (DAVID, SHADOW DEPUTY LEADER OF THE HOUSE OF LORDS AND SHADOW SPOKESMAN FOR FOREIGN AND COMMONWEALTH AFFAIRS, AND CAROLE, ENERGY RESEARCH FELLOW AT THE UNIVERSITY OF SURREY, OUT OF THE ENERGY LABYRINTH, P. 164) “PEER GROUP PRESSURE WORKS AROUND BUSINESS BOARDROOM RABIES AS WELL AS AROUND KITCHEN TABLES. AND INDUSTRY IN THE ADVANCED NATIONS IS THE BIGGEST CONSUMER IF NOT OF OIL THEN OF GAS AND ELECTRICITY, WHICH CREATES INDIRECT PRESSURE ON THE OIL SCENE. COMPANIES, HOWEVER, HAVE BOTTOM LINES AND BACKERS AND SHAREHOLDERS T O SATISFY. THEY CANNOT AFFORD MERELY TO BE FASHIONABLE WHEN THEY DECIDE TO INVEST OTHER PEOPLE'S MONEY. THE BIGGEST DETERRENT TO INVESTMENT IN NEW ENERGY-EFFICIENT TECHNOLOGY AND MACHINERY IS THE FEAR THAT CHEAP OIL WILL RETURN, INVALIDATING ALL COST-SAVING CALCULATIONS AND LEAVING WHITE ELEPHANT PROJECTS STRANDED. THAT IS EXACTLY WHAT HAPPENED TO MANY WELLINTENTIONED AND ENTHUSIASTIC BUSINESSES IN THE 1980S. THE BIGGEST INCENTIVE TO MOVE FORWARD, TO INVEST IN NOT JUST THE NEW METHODS BUT THE NEW PRODUCTS WHICH THE PUBLIC ARE ALREADY BEGINNING TO DEMAND - IN THE HOME, IN THE KITCHEN, IN THE OFFICE, ON THE ROAD, IN THE AIR AND IN ALL PUBLIC PLACES - IS THE CERTAIN KNOWLEDGE THAT CHEAP AND RELIABLE OIL WILL NOT COME BACK FOR YEARS, IF EVER; THAT THE FULL PRICE OF BOTH OIL AND OTHER FOSSIL FUELS
WILL HAVE TO BE PAID AND THAT CHEAPER AND MUCH MORE PROFITABLE ENERGY PLATFORMS ARE WAITING IN THE WINGS TO BE ROLLED ON STAGE.”


Current investment is unsustainable- boom and bust cycle will wipe out investments without federal incentives.
David Rotman, Editor of Technololgy Review, “The price of biofuels: making ethanol from corn is expensive. Better biofuels are years away from the gas tank. Farmers are reluctant to change their practices. But do we really have any alternative to biofuels?” Technology Review, Vol. 111 No. 1, January 1, 2008. The irrational exuberance over ethanol that swept through the American corn belt over the last few years has given way to a dreary hangover, especially among those who invested heavily in the sprawling production facilities now dotting the rural landscape. It's the Midwest's version of the tech bubble, and in some ways, it is remarkably familiar: overeager investors enamored of a technology's seemingly unlimited potential ignore what, at least in retrospect, are obvious economic realities. More than a hundred biofuel factories, clustered largely in the corn-growing states of Iowa, Minnesota, Illinois, Indiana, South Dakota, and Nebraska, will produce 6.4 billion gallons of ethanol this year, and another 74 facilities are under construction. Just 18 months ago, they were cash cows, churning out high-priced ethanol from low-priced corn, raising hopes of "energy independence" among politicians, and capturing the attention--and money--of venture capitalists from both the East and West Coasts. Now ethanol producers are struggling, and many are losing money. The price of a bushel of corn rose to record highs during the year, exceeding $4.00 last winter before falling back to around $3.50 in the summer, then rebounding this fall to near $4.00 again. At the same time, ethanol prices plummeted as the market for the alternative fuel, which is still used mainly as an additive to gasoline, became saturated. In the face of these two trends, profit margins vanished. The doldrums of the ethanol market reflect the predictable boom-and-bust cycle of any commodity: high prices drive increased production, and soon the market is oversupplied, causing prices to crash. But the large-scale use of corn-derived ethanol as a transportation fuel has economic problems all its own. Even though crude oil is at near record prices, and companies that use ethanol in their gasoline receive a federal tax credit of 51 cents per gallon, ethanol struggles to compete economically. And with limited infrastructure in place to distribute and sell the biofuel, demand will remain uncertain for the foreseeable future. Page 34 of 139

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INHERENCY/CURRENT INCENTIVES FAIL
STATUS QUO INCENTIVES INSUFFICIENT TO GUARANTEE STABLE INVESTMENT

ABJ

EDITORS
OF
NATURE
BIOTECHNOLOGY,
“IRRATIONAL
EXUBERANCE?”
VOL.
24
NO.
726,
2006,
GOOGLE
SCHOLAR,
ACCESSED
5/20/08
 SCIENTISTS
AND
BIOTECH
EXECUTIVES
MIGHT
NOT
PAY
MUCH
ATTENTION
TO
NEWS
ARTICLES
IN
PUBLICATIONS
LIKE
BLOOMBERG
MARKETS.
 BUT
THEY
WOULD
DO
WELL
TO
READ
THE
SOBERING
ARTICLE
IN
THIS
MONTH'S
ISSUE
ENTITLED
"ETHANOL
FRENZY"
BY
JOE
CARROLL.
CARROLL
 HAS
DONE
SOMETHING
THAT
MOST
JOURNALISTS
COVERING
BIOFUELS
HAVE
NOT:
EXAMINED
THE
UNDERCARRIAGE
AND
FUEL
SOURCE
OF
THE
 BIOENERGY
JUGGERNAUT.
HE
POINTS
OUT,
AMONG
OTHER
THINGS,
THAT
FEW
THINGS
IN
THIS
WORLD
ARE
MORE
FRAGILE
THAN
GOVERNMENT
 FUNDING
AND
INDUSTRY
ENTHUSIASM
FOR
BIG,
NEW
IDEAS
THAT
AFFECT
THEIR
OWN
SHARE
PRICE
AND
COMMODITIES
PRICES.

GOVERNMENT
 FUNDING
FOR
BIOFUELS,
AT
LEAST
IN
THE
CORN‐BASED
ETHANOL‐HAPPY
UNITED
STATES,
IS
RELATIVELY
PUNY
AND
IS
HUGELY
POLITICALLY
 CALCULATED.
WHICH
IS
TO
SAY
THAT
IT
CAN
ALL
GO
AWAY
IN
THE
BLINK
OF
AN
EYE.
LAST
YEAR'S
ENERGY
BILL,
WHICH
PRESIDENT
BUSH
SIGNED
 INTO
LAW,
FORCES
OIL
REFINERS
TO
NEARLY
DOUBLE
THEIR
BIOFUEL
USE
BY
2012,
FOR
EXAMPLE.
FORGET
THE
FACT
THAT
THIS
IS
LITTLE
MORE
 THAN
A
STUNT
DESIGNED
TO
WIN
OVER
VOTERS
IN
THE
MIDTERM
ELECTIONS
IN
MIDWESTERN
CORN‐GROWING
STATES
LIKE
MINNESOTA,
 IOWA,
KANSAS
AND
COLORADO.

ALTHOUGH
IT
GUARANTEES
THAT
FARMERS
WILL
HAVE
A
CAPTIVE
MARKET
FOR
THEIR
CORN
FOR
THE
NEXT
SIX
 YEARS,
THERE
IS
NO
GUARANTEE
THAT
THIS
MANDATE
WILL
BE
EXPANDED
OR
CONTINUED
AFTER
THAT
WHEN
THESE
STATES
ARE
NOT
QUITE
AS
 POLITICALLY
IMPORTANT
TO
WASHINGTON.
FARMERS
ARE
NEVER
GOING
TO
COMPLAIN
ABOUT
GOVERNMENT
MARKET
SUPPORTS,
BUT
THEY
 ARE
UNDERSTANDABLY
AMBIVALENT
ABOUT
JUST
HOW
DEEP
WASHINGTON'S
COMMITMENT
TO
BIOFUELS
TRULY
RUNS.
THEY
ARE
ALSO
AWARE
 OF
THE
MONEY
LOST
IN
THE
1980S
BY
THOSE
WHO
BET
ON
BIOFUELS
BECAUSE
THE
US
GOVERNMENT,
ALONG
WITH
OIL
REFINERS
AND
COAL
 PRODUCERS,
WAS
BULLISH
ON
ENERGY
ALTERNATIVES.



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CURRENT INCENTIVES FOR ALTERNTATIVE FUELS WILL FAIL- THEY ARE TOO SMALL AND THEY EXPIRE- WHICH DETERS INVESTMENT. Roberta Barkman James, Assistant Attorney General with the Maryland Environmental Service, Fall 2007, “OIL AND THE ENVIRONMENT: REDUCING OIL DEPENDENCY IN THE AUTOMOTIVE SECTOR,” 15 U. Balt. J. Envtl. L. 1. LEXIS, accessed 5/10/08. In order to reduce consumption of oil and stabilize global warming effects, "millions, not thousands," of non-gasoline vehicles need to be placed in service sooner rather than later. n161 The current policies will not provide enough incentives to accomplish this goal. Consequently, the downsides to the alternative motor vehicle credit are many. First, the full credit for purchasing a hybrid or advanced lean-burn vehicle may only be taken on the first 60,000 vehicles sold by a manufacturer. n162 Thereafter, the credit is phased out "beginning with the second calendar quarter" after the last of the 60,000 hybrids of a manufacturer is sold. n163 The rationale behind this provision is to allow multiple automakers to benefit from the demand for alternative fuel vehicles. The provision could backfire, however, and reduce sales if consumers are more attracted to one model than the others and that model's credit has been phased out. Second, the credit is not enough. Currently, the tax credit for alternative fuel vehicles, as passed by EPAct05 ranges from a low of $ 250 for a Model Year (MY) 2007 GMC Sierra 2WD Hybrid Pickup Truck to a high of $ 4,000 for a MY 2007 natural gas Honda Civic GX. n164 A comparative [*20] example of the price of a car model fueled by conventional fuel versus the price of its alternative fuel counterpart provides a clear illustration that this current tax credit is insufficient to increase the demand for the alternate fuel version. For example, Honda sells the MY 2008 Honda Civic Sedan for prices ranging from $ 15,010 to $ 22,460 depending on the trim level. n165 The Honda Civic Sedan Hybrid for MY 2008 sells for $ 24,350 at the high end. n166 With its tax credit of $ 2,100, this Hybrid actually saves the taxpayer/purchaser only about $ 300 to $ 400 n167 and ends up costing approximately $ 24,000, approximately $3,000 more than the same model powered by gasoline. In 2001, a GAO report declared that "a very large tax incentive would be needed to result in any significant increase in the use of alternative fuel vehicles." n168 Clearly, the current tax incentive is far from large enough to accomplish this goal, as overall sales of alternative vehicles have shown. n169 Third, the credit expires too soon. As currently enacted, the tax credit for buying alternative and renewable fuel vehicles expires in 2010, 2011, and 2015 for (1) hybrids over 8,500 pounds; (2) advanced lean-burn, lighter hybrids, and qualified alternative fuel vehicles, and (3) fuel cell vehicles, respectively. n170 If the U.S. wants manufacturers to make alternative and renewable fuel vehicles, there must be enough demand to ensure the manufacturers that new cars will be purchased.


 
 
 current
incentives
target
corn
ethanol,
not
cellulosic

 ROBERT HAHN, DIRECTOR OF THE AEI CENTER FOR REGULATORY AND MARKET STUDIES, “ETHANOL: LAW, ECONOMICS AND POLITICS,” AEI CENTER FOR REGULATORY AND MARKET STUDIES, 1/08 ONE WAY THAT ETHANOL COULD CONTRIBUTE MORE TO ENERGY SECURITY IS IF IT WERE MADE FROM SOMETHING OTHER THAN CORN. IN FACT, SOME ENVIRONMENTALISTS SUPPORT CURRENT CORN ETHANOL PRODUCTION BECAUSE THEY SEE IT AS A STEPPING STONE TO CELLU-LOSIC ETHANOL. THE BUSH ADMINISTRATION SPECIFICALLY 112 MENTIONS THE IMPORTANCE OF CELLULOSIC ETHANOL IN THEIR PLAN’S FEASIBILITY. CELLULOSIC ETHANOL IS BELIEVED TO BE BETTER FOR THE ENVIRONMENT AND MAY AC- TUALLY ACHIEVE SOME ENERGY SECURITY FOR THE U.S. IN FACT, A DEPARTMENT OF EN-ERGY STUDY CITED BY THE GOVERNMENT ACCOUNTABILITY OFFICE ESTIMATES THAT THERE IS SUFFICIENT BIOMASS IN WOOD CHIPS AND CORN STALKS TO POTENTIALLY PRODUCE ABOUT 60 BILLION GALLONS OF ETHANOL PER YEAR BY 2030, WHICH WOULD BE ABOUT 30 PER-CENT OF THE AMOUNT OF GASOLINE CONSUMPTION PROJECTED BY THE ENERGY INFORMA-TION 113 ADMINISTRATION FOR 2030.

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ALTHOUGH MONEY FOR RESEARCH AND DEVELOPMENT FOR CELLULOSIC ETHANOL HAS INCREASED IN RECENT YEARS, CELLULOSIC HAS NOT RECEIVED NEARLY THE SUPPORT IN THE FORM OF TAX CREDITS AND OTHER INCENTIVES THAT HAS BEEN GIVEN TO CURRENT CORN ETHANOL PRODUCTION.


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Inherency/ MARKET PREDICTABILITY KEY
market
predictability
will
spur
capital
investment



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Blowie, 2007 (Elias, Venture Capital Specialist for Alternative Energies at Heller Ehrman LLP, “How To Turn Clean Energy Into a Powerhouse”, with Alison Freeman-Gleason and Todd Glass, Business Week Online, September 5, http://www.businessweek.com/technology/content/sep2007/tc2007094_253556.htm) The federal government needs to establish a floor for renewable-energy use to provide predictable markets where investors and companies know demand will exist for their products. With these predictable markets and increased demand, capital investment will flow, and all will gain the benefits of decreased costs from larger volumes. So far, more than 20 states have told utilities that a certain percentage of their entire electric power requirements need to come from renewable sources. Among these programs, there is a wide disparity about how such goals are to be met, which leads to risk and ultimately increased costs for utility customers. The U.S. needs to be more forward-thinking. Although it is fair to speculate about its implementation, China's national renewable-energy law, passed in February, 2006, is more aggressive in setting mandates for the development and use of renewable energy than any U.S. federal law. The U.S. needs to create a ready market for innovation in renewable energy generation.

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Inherency/ TRANSPORTATION KEY/OIL DEPENDENCE SOLVENCY
transportation
key
–
plan
solves
oil
dependence



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Monsma, 2006 (David W., Rapporteur and Associate Director of the Program on Energy at the Aspen Institute, A High Growth Strategy For Ethanol, Introduction, Available via the Aspen Institute, http://www.aspeninstitute.org/atf/cf/{DEB6F227-659B-4EC8-8F84-8DF23CA704F5}/EEEethanol1.pdf) Two-thirds of U.S. oil consumption is for transportation, and two-thirds ofthat is for cars and light trucks.To reduce our dependence on oil, therefore, aggressive steps must be taken to reduce consumption of gasoline. A program reflecting national commitment and leadership is needed. Toward that end, we recommend that the U.S. adopt a very ambitious goal of producing 100 billion gallons per year of ethanol by 2025, the equivalent of half of today’s U.S. gasoline consumption or nearly 25 percent of today’s overall U.S.oil use.

transition
to
biofuels
solves
oil
dependence

Monsma, 2006 (David W., Rapporteur and Associate Director of the Program on Energy at the Aspen Institute, A High Growth Strategy For Ethanol, Introduction, Available via the Aspen Institute, http://www.aspeninstitute.org/atf/cf/{DEB6F227-659B-4EC8-8F84-8DF23CA704F5}/EEEethanol1.pdf) Each of the oil crises of the last 35 years (triggered by the Arab OPEC oil embargo in 1973, the Iranian revolution in 1979, and the Iraqi invasion of Kuwait in 1990) caused significant economic harm to the U.S. and resulted in calls for reduced dependence on imported oil. Yet despite some fuel switching and improvements in efficiency, U.S. oil imports have increased from about 30% in 1972 to almost 60% in 2005. U.S. consumption continues to grow, while domestic production has declined steadily since 1970. World demand is expected to grow from today’s roughly 85 million barrels per day to nearly 120 million barrels per day in 2025,and some analysts argue that most readily accessible conventional oil reserves have been discovered and production is about to peak. Even before the 9/11 attacks and the war in Iraq, increasing U.S. and world dependence on oil from the volatile Middle East constrained our foreign policy options. As U.S. oil imports increase, global demand accelerates, and reserves outside the Persian Gulf region decline, the security risks of our oil addiction will grow. A transition to using ethanol in our cars, however, along with improved fuel economy and other alternatives, will help reduce U.S. dependence on oil and thereby decrease our vulnerability to oil price shocks and increase our foreign policy options, particularly ifother nations follow suit. Environment There is widespread agreement among scientists that human emissions of carbon dioxide and other greenhouse gases are likely to have serious consequences for the world’s climate. To prevent dangerous interference with the climate system, global carbon emissions over the next 50 years will need to be reduced by about 175 billion tons compared to a businessas-usual scenario. This will require a variety ofactions in the U.S. and worldwide. More than 25 percent ofmanmade emissions of CO2in the U.S. are from transportation, and reducing the use ofgasoline in cars is one of the largest contributions we can make. Compared to gasoline, ethanol made from corn is estimated to reduce greenhouse gas emissions by 20-30 percent and ethanol from cellulose – made from the stalks, stems and leaves ofplants – by about 85 percent or more. Using renewable fuels in transportation can also help reduce the air pollution associated with burning petroleum. With the adoption of sustainable production methods in the agricultural sector, the environmental impacts offarming practices can also be reduced.

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Inherency/ TRANSPORTATION KEY/OIL DEPENDENCE SOLVENCY

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TRANSPORTATION KEY TO ENERGY INDEPENDENCE- WE NEED FEDERAL INCENTIVES FOR ALTERNATIVE FUEL Roberta Barkman James, Assistant Attorney General with the Maryland Environmental Service, Fall 2007, “OIL AND THE ENVIRONMENT: REDUCING OIL DEPENDENCY IN THE AUTOMOTIVE SECTOR,” 15 U. Balt. J. Envtl. L. 1. LEXIS, accessed 5/10/08. A variety of factors caused oil prices to rise sharply in 2003 and stay elevated, in contrast to what most experts predicted. n1 The increase has been attributed to such factors as "increaseed demand ... terrorism, and the 2005 hurricane season..." n2 Irrespective of the cause, this rise in oil prices triggered renewed United States' (U.S.) interest in reducing reliance on foreign oil. n3 This renewed interest, coupled with acknowledgement that burning oil, as well as other fossil fuels, contributes significantly to the global warming effect, n4 supports the need to avoid energy and environmental crises by reducing oil dependence before the consequences reach crisis proportions. Factors such as peak oil, the effects of global warming, and the cost to the U.S. economy from the instability of oil prices and maintaining [*2] access to oil drive the timeline to achieve oil independence, and the market alone cannot make the change quickly enough. Since vehicle use consumes significant amounts of oil and emits significant amounts of greenhouse gases, legislation is necessary to create a market for alternative and renewable vehicles and fuels, facilitate the development of new and affordable technologies and distribution infrastructure for renewable and alternative fuels, and encourage land use patterns that reduce U.S. dependence on cars and ultimately on oil.

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ECONOMY SOLVENCY/MARKET DIVERSIFICATION
economy
–
multiple
warrants


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Monsma, 2006 (David W., Rapporteur and Associate Director of the Program on Energy at the Aspen Institute, A High Growth Strategy For Ethanol, Introduction, Available via the Aspen Institute, http://www.aspeninstitute.org/atf/cf/{DEB6F227-659B-4EC8-8F84-8DF23CA704F5}/EEEethanol1.pdf) Increasing global demand and a lack of spare production capacity, exacerbated by hurricane damage to U.S. production facilities and turmoil in some exporting countries, have contributed to recent high oil prices and threatened economic growth. Substituting domestically produced ethanol for a large portion of our gasoline use can dramatically reduce our oil imports and our balance of trade deficit. If oil averages $60 per barrel for 2006 and imports are over 12.5 million barrels per day, we will send about a quarter of a trillion dollars abroad for oil – nearly a third of last year’s record trade deficit. Reducing our oil addiction can thus contribute to resolving some of our most difficult current economic problems as well as reduce our vulnerability to the economic devastation of future oil price shocks. Substituting ethanol for gasoline can also begin to transform our system of agricultural price supports and land set-aside programs while creating jobs and stimulating the economy in rural areas. Transitioning some farm support programs toward assistance for energy crops would be more economically rational and would have significant energy and environmental benefits. World Trade Organization decisions declaring some current farm subsidies in violation of trade regulations may require that such a transition be initiated quickly. Reauthorization of basic agriculture programs, required in 2007,provides an opportunity. Growing energy crops and harvesting agricultural residues will increase the value of farm output. Expanding the production of cellulosic biomass and adding it to increased production of corn will allow a substantial increase in ethanol production. The economic benefits will include additional and more diversified markets for both grain and energy crops that can help agriculture production achieve higher net returns, both locally and in the world economy. In addition to these benefits, investment in production plants located largely in rural areas will provide jobs and an increased tax base to help support local governments, schools and other public services. The benefits combined may even be able to slow the conversion of farmland into residential development and suburban sprawl.

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Monsma, 2006 (David W., Rapporteur and Associate Director of the Program on Energy at the Aspen Institute, A High Growth Strategy For Ethanol, Introduction, Available via the Aspen Institute, http://www.aspeninstitute.org/atf/cf/{DEB6F227-659B-4EC8-8F84-8DF23CA704F5}/EEEethanol1.pdf) Biomass feedstocks for ethanol are abundant, varied and relatively inexpensive, and their potential for improved yields and processing potential are great. (See “Biotechnology for Biofuels Production,” by Richard Hamilton, Appendix D.) With a concerted effort the U.S. can sustainably produce much more biomass for energy without diminishing our capacity to produce food. (See “Cellulosic Ethanol in an Oil and Carbon Constrained World,” by W. Michael Griffin and Lester B. Lave, Appendix A, and “Impacts of Cellulosic Ethanol on the Farm Economy,” by Bruce E. Dale, Appendix B.) With a corresponding effort, we can greatly reduce the cost of converting that biomass to ethanol, produce the cars to use it, and provide the fueling infrastructure. On average oil prices are projected to rise over time. Given sufficient development effort, ethanol can be expected to sell for less than gasoline, even taking into account ethanol’s lower energy content per gallon. Ethanol from corn and ethanol from cellulose are the same product. Ethanol in the U.S. is currently derived primarily from the starch in corn kernels. Ethanol from cellulose can be produced from a wide variety of feedstocks, including plants (switchgrass, sunflowers, hemp), plant waste (corn stover, cereal straws, sugarcane bagasse), and plant waste from industrial processes (sawdust, paper pulp, wood chips). Many experts expect switchgrass, a hardy, fastgrowing, perennial crop that can be grown in large parts of the U.S., to be one ofthe major feedstocks ofa mature ethanol industry. Ethanol from corn is an established industry with substantial additional growth potential. The Renewable Fuels Standard passed by Congress in the Energy Policy Act of2005 (EPAct 2005) requires the integration of 7.5 billion gallons of ethanol per year into the gasoline supply by 2012.We cannot, however, reach the goal of 100 billion gallons without ethanol from cellulose and without improve- ments in energy crop yields and the development of appropriate biorefineries. (See “Commercialization of Cellulosic Ethanol Facilities: A Financial Perspective,” by Richard (Roy) Torkelson, Appendix E.) Ethanol from cellulose can also increase the environmental and other benefits already derived from corn ethanol. (See “Ethanol and the Environment: Delivering on the Promise of a Sustainable Biofuel,” by Nathanael Greene,Appendix C.) All cars and light duty trucks in the U.S. can already run on E10, a blend of gasoline containing 10 percent ethanol. There are also over five million flexible-fuel vehicles (FFVs) on the road today capable of running interchangeably on gasoline, E85 (a mixture of 85 percent ethanol and 15 percent gasoline), or any blend in between. Relatively few service stations sell E85,however,and many vehicle owners do not know that their cars can use it. The principal challenge of achieving ethanol’s potential is to increase concurrently feedstock production, conversion capacity, and availability of FFVs and E85 pumps so that a delay in one does not strand investments in the others. A second set of challenges is to correct misperceptions and manage expectations related to ethanol. For instance, the widely held perception in the U.S. that more energy is used to grow, transport and process the feedstock into ethanol than is contained in the ethanol itselfis simply wrong. A growing number of peer-reviewed studies show that corn ethanol contains significantly more energy than it takes to produce it. Ethanol from cellulose will provide even higher energy returns. (See “Impacts of Cellulosic Ethanol on the Farm Economy,” by Bruce E.Dale, in this volume; “Ethanol Can Contribute to Energy and Environmental Goals,” Farrell et al, Science, January 27, 2006; and “Ethanol’s Energy Return on Investment: A Survey of the Literature 1990-Present,” by Roel Hammerschlag, Environmental Science and Technology, February 2006.) This misperception also reflects a misplaced concern, because producing and converting primary energy such as oil or coal into a usable product such as gasoline or electricity always requires large amounts ofenergy. Similarly, we must manage the expectation that ethanol, or even ethanol from cellulose, is a silver bullet that can reduce gasoline prices overnight or single handedly solve all of our oil related challenges. It will be several years before we can start to produce a significant amount of ethanol from cellulose, so we must continue to grow the existing industry. Furthermore, improving the efficiency with which we use both gasoline and ethanol will always be the cleanest and fastest way for us to reduce our dependence on oil. In particular, improving the fuel economy of our cars and trucks is essential to managing the land requirements ofethanol.

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FEDERAL INCENTIVES ALLOW ALTERNATIVE FUEL MARKETS TO TAKE HOLD. CURRENT POLICY DOESN’T DO ENOUGH. Mona Hymel, Professor of Law at the University of Arizona, 2006, “The United States' Experience with Energy-Based Tax Incentives: The Evidence Supporting Tax Incentives for Renewable Energy,” 38 Loy. U. Chi. L.J. 43, Lexis, accessed 5/10/08. The U.S. government could encourage taxpayers to decrease their dependence on fossil fuels by facilitating the development of alternative and renewable fuels and by encouraging greater efficiency when nonrenewable energy sources are used. n192 Individually these strategies cannot significantly reduce fossil fuel use. Together, however, they can be effective. Increased commercial availability and reduced cost are necessary for widespread use and acceptance of renewable and alternative fuels to take hold. This section considers the role of tax incentives in achieving this goal. Until renewable fuels are more commercially viable, alternative fuels that combine fossil fuels with renewable fuel are a technologically feasible option. Unfortunately, these alternative fuels still incorporate the use of fossil fuels. As a result, these "environmentally friendly" tax subsidies for alternative fuels still encourage continued dependence on [*73] fossil fuels. In the long run, alternative fuels should therefore be phased out as renewable fuels become more viable. The most significant alternative fuel tax provision, the credit or deduction for alcohol fuels, which constitutes over ninety-four percent of alternative tax incentives directed at reducing gasoline use, n193 grants a subsidy to fossil fuels mixed with an alternative fuel, typically alcohol or ethanol. n194 Although the incentive ostensibly encourages more efficient fossil fuel consumption, alternative fuel use has not resulted in lower fossil fuel consumption or reduced our dependence on cars. n195 In fact, both consumption and car use have increased despite these provisions. Since 1978, when Congress enacted most of the alternative fuel provisions, the United States has invested between $ 30 and $ 33 billion in alternatives through tax subsidies. During this same period, despite decreases in oil and gas incentives, the United States invested approximately $ 106 billion in fossil fuels - three times what it spent on alternative fuels. n196 This kind of differential, not surprisingly, undercuts the likelihood of achieving successful results for alternative fuel technologies. To date, the tax subsidies for alternative fuels are too small, and they fail to target the real problem: fossil fuel dependence. Alternative fuels have the potential to reduce petroleum consumption, reduce greenhouse gas emissions, and produce significant energy savings. Therefore, under a long-term strategy, moving to alternative fuels represents an intermediate step in the right direction.

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Food Prices: “Corn =” 1/4
Our priority of corn ethanol locks in rapid corn inflation.

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David Rotman, Editor of Technololgy Review, “The price of biofuels: making ethanol from corn is expensive. Better biofuels are years away from the gas tank. Farmers are reluctant to change their practices. But do we really have any alternative to biofuels?” Technology Review, Vol. 111 No. 1, January 1, 2008. More alarming, the boom in ethanol production is driving up the price of food. Of the record 93 million acres of corn planted in the United States in 2007, about 20 percent went to ethanol. Since most of the rest is used to feed animals, the prices of beef, milk, poultry, and pork are all affected by increases in the cost of corn. The international Organization for Economic Cooperation and Development (OECD)recently warned that the "rapid growth of the biofuels industry" could bring about fundamental shifts in agricultural markets worldwide and could even "cause food shortages." All this comes at a time when the need for alternatives to petroleum-based transportation fuels is becoming urgent. At press time, the price of crude oil was near $90 a barrel. And worries about the impact of greenhouse-gas emissions from the roughly 142 billion gallons of gasoline used every year in the United States are deepening. Expanded use of biofuels is central to the federal government's long-term energy strategy. In his State of the Union speech on January 23, 2007, President Bush set the goal of producing 35 billion gallons of renewable and alternative fuels by 2017, citing the need for independence from foreign oil. The U.S. Department of Energy has set the similar goal of replacing 30 percent of gasoline use with biofuel use by 2030. Hitting both targets, however, will require significant technological breakthroughs. In the United States, for now, ethanol means the corn-derived version. (Brazilian producers were expected to make 4.97 billion gallons of ethanol in 2007, mostly from sugarcane; but that semitropical crop is agriculturally viable in only a few parts of the United States.) Even proponents of corn ethanol say that its production levels cannot go much higher than around 15 billion gallons a year, which falls far short of Bush's goal.

Corn ethanol will fail- it’s too inefficient- but it will drive commodity prices skyward.
David Rotman, Editor of Technololgy Review, “The price of biofuels: making ethanol from corn is expensive. Better biofuels are years away from the gas tank. Farmers are reluctant to change their practices. But do we really have any alternative to biofuels?” Technology Review, Vol. 111 No. 1, January 1, 2008. It is not just the short-term economics of ethanol that concern agricultural experts. They also warn that corn-derived ethanol is not the "green fuel" its advocates have described. That's because making ethanol takes a lot of energy, both to grow the com and, even more important, to run the fermentation facilities that turn the sugar gleaned from the corn kernels into the alcohol that's used as fuel. Exactly how much energy it takes has been the subject of intense academic debate in various journals during the last few years. According to calculations done by Minnesota researchers, 54 percent of the total energy represented by a gallon of ethanol is offset bythe energy required to process the fuel; another 24 percent is offset by the energy required to grow the corn. While about 25 percent more energy is squeezed out of the biofuel than is used to produce it, other fuels yield much bigger gains, says Stephen Polasky, a professorof ecological and environmental economics at Minnesota. Making ethanol is "not a cheap process," he says. "From my perspective, the biggest problem [with corn ethanol] is just the straight-out economics and the costs. The energy input/output is not very good." The high energy requirements of ethanol production mean that using ethanol as fuel isn't all that much better for the environment than using gasoline. One might think that burning the biofuel would release only the carbon dioxide that corn captures as it grows. But that simplified picture, which has often been conjured up to support the useof ethanol fuel, doesn't withstand closer scrutiny. In fact, Polasky says, the fossil fuels needed to raise and harvest corn and produce ethanol are responsible for significant carbon emissions. Not only that, but the cultivation of corn also produces two other potent greenhouse gases: nitric oxide and methane. Polasky calculates that corn-derived ethanol is responsible for greenhouse-gas emissions about 15 to 20 percent below those associated with gasoline: "The bottom line is that you're getting a slight saving in terms of greenhouse-gas emissions, but not much." If corn-derived ethanol has had little impact on energy markets and greenhouse-gas emissions, however, its production could have repercussions throughout the agricultural markets. Not only are corn prices up, but so are soybean prices, because farmers planted fewer soybeans to make room for corn.

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Food Prices: “Corn =” 2/4
SQ investment drives up food prices

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W. Michael Griffin and Lester B. Lave, Executive Director of the Green Design Institute and Professor of Economics at the Tepper School of Business- Carnegie Mellon University, respectively, “Cellulosic Ethanol in an Oil and Carbon Constrained World,” in A HIGH GROWTH STRATEGY FOR ETHANOL, 2006, available online at:
www.aspeninstitute.org/atf/cf/%7BDEB6F227-659B-4EC8-8F84-8DF23CA704F5%7D/EEEethanol2.pdf.

Ethanol is currently supplied by an industry that consists of more that 90 corn ethanol plants with an annual production capacity of 4.4 billion gallons. The industry utilizes 1.3 billion bushels of corn, about 13 percent of the US corn crop. At average US corn yields of 148 bushels in 2005, approximately 8 million acres of corn was required, mainly in the Midwest. Corn is transported to the plants by truck and rail. The ethanol produced is shipped for blending with gasoline mainly via truck across the US. This ethanol is used a fuel extender (E10 – a blend of 10 percent ethanol/90 percent gasoline), in oxygenated gasoline (at 7.7 percent), in reformulated gasoline (at 5.7 percent) or as an alternative fuel (E85). Currently ethanol is about 3 percent of the total “gasoline” usage for the US light duty fleet. Ethanol enjoys federal and, in some places, state tax incentives for ethanol-gasoline blends. Recent legislation, the Volumetric Ethanol Excise Tax Credit, provides for a Federal gasoline excise tax exemption on ethanol blends of $0.52 per gallon of ethanol. For example, a blender would receive a tax credit of $0.44 per gallon of E85, which most economists believe would be passed through to the consumer at the pump. It now applies to all blends of ethanol/gasoline. The goal of the Federal tax subsidy is to make the per gallon cost of ethanol equal to gasoline. All of the federal and state incentive programs were passed to increase the price of corn, to help farmers and to make a modest reduction in oil imports.
BIO-FUEL INCENTIVES DRIVE UP GLOBAL FOOD PRICES, AND DISTORT ENERGY MARKETS. Arvind Subramanian, senior fellow Peterson Institute for International Economics, “US Leadership in the Global Food Crisis,” Statement before the US House of Representatives, Committee on Financial Services, hearing on Contributing Factors and International Responses to the Global Food Crisis, May 14, 2008, available online at: http://www.petersoninstitute.org/publications/papers/paper.cfm?ResearchID=931, accessed 6/12/2008. I would like to make a few general comments about trade and economic incentives. First, U.S. policies related to ethanol. There is a big debate about the contribution that they make toward raising food prices. The range of estimates will vary and we will never know the precise magnitudes. But that should not come in the way of action. We can be confident that eliminating or reducing the distortions generated by the ethanol program will help dampen food prices. Moreover, these policies are one of the few factors responsible for the crisis that we can control more than we can control climactic factors that affect supply or the increased demand due to prosperity in the developing world. We need to act on the few things that U.S. policy-makers can control and eliminating or reducing the ethanol program is one policy lever we have. Moreover, the ethanol issue should be seen not from the narrow perspective of its contribution to food but from two broader perspectives. With oil prices at US$126 a barrel, the market by itself is providing a lot of help and incentives for ethanol production. There seems little need for additional help and incentives at taxpayers' expense. Furthermore, while ethanol interventions originally had good motivations (reducing dependence on fossil fuels and imported fuels), they have led to some unintended consequences that are now becoming evident. The question now from an environmental perspective is this: insofar as the U.S. government needs to provide incentives for the search for alternatives to fossil fuels, why favor one particular alternative, namely ethanol (which, according to experts is not even the most environmentally efficient one)? Why not level the playing field so that all new avenues, all potentially new ideas have a good shot at being explored and discovered? In other words, eliminating all the assistance to ethanol-based biofuels and providing broad-based incentives for alternative fuel research and production might be better food policy and better environmental policy. The aim of policy should not be to "pick" winners but to find winners.

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BIO-FUEL INCENTIVES INCREASE GLOBAL FOOD PRICES

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Arvind Subramanian, senior fellow Peterson Institute for International Economics, “US Leadership in the Global Food Crisis,” Statement before the US House of Representatives, Committee on Financial Services, hearing on Contributing Factors and International Responses to the Global Food Crisis, May 14, 2008, available online at: http://www.petersoninstitute.org/publications/papers/paper.cfm?ResearchID=931, accessed 6/12/2008. To boost agricultural supply in the medium run, we need to fix the incentives facing agriculture globally. That in turn means efficient and food-friendly trade policies around the world. But not only are we far away from that objective, we are moving in the wrong direction. In the U.S., the combination of the Renewable Fuels Standard (the ethanol mandates), the blenders' tax credit, and tariffs on imported Brazilian ethanol have diverted land, especially from wheat and soya bean production, and contributed to food price increases. Estimates vary on the magnitude of this contribution (one estimate by Professor Babcock of Iowa State University says that eliminating all three of these measures would reduce prices by 16 percent, while another by the International Food Policy Research Institute (IFPRI) suggests that a moratorium on biofuel production in developed countries through 2008 would ease corn prices by 20 percent and wheat prices by 10 percent), but as I will explain below, the question of exactly how much is less important than the fact that these three policies contribute to food price rises. BIOFUELS DRIVE UP COMMODITY PRICES. Jim Kleinschmit, Rural communities program director for the Institute for Agriculture and Trade Policy, “Biofuels Moving Mainstream– Environmental and Social Implications,” IATP COMMENTARY, September 13, 2007, available online at: www.iatp.org/iatp/commentaries.cfm?refid=100323, accessed 6/12/2008. Take, for example, the increasing concern about biofuels’ impact on commodity prices and availability – more commonly referred to as the “food vs. fuel” issue. There is no doubt that the growing demand of the biofuels sector for feedstocks – primarily corn and soybeans in the U.S. – is having an impact on the prices of these and other basic commodity crops. Already, it is expected that ethanol will consume 20 percent of U.S. corn in 2007, and more than 30 percent of the corn crop by 2009. And if all of the proposed plants as of April 2007 were to be built (which is not likely to happen), this share could grow to as much as 54 percent. Biodiesel’s market share is much smaller, but is having a similar effect on the soy market, with the USDA projecting that the sector will consume 20 percent of soy oil production in 2007/08. One clear result of this increased usage has been a rise in corn prices, but also in other commodities such as soybeans, wheat, oats, and barley, as farmers have shifted acreage to corn and other users have turned to them as “replacement” feedstocks. The result is that biofuels are blamed for everything from the higher prices of tortillas in Mexico to higher meat prices in America, all while raising the specter of worldwide threats of increased food insecurity.

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Food Prices: “Corn =” 4/4
There are many factors in commodity inflation- but biofuel production is a controllable one.
ROSALIE WESTENSKOW, journalist, “Farm bill hikes biofuels funding,” UPI Energy May 22, 2008.

ABJ

The Causes of Food Price Increases Many experts have noted that there is a confluence of forces driving food prices upward. My co-panelist, Ambassador Sheeran has described it as a "perfect storm." I will just mention a few and then briefly address one. Factors contributing to high food prices include: --rising demand for higher-protein foods in fast growing developing countries like India and China; --changing weather patterns and production problems for some commodities and some regions, notably droughts in wheat producing regions including Australia, North Africa, and Ukraine; --high energy prices that raise food production costs, food transport costs, and agriculture input costs (e.g., fertilizer and fuel for mechanized machinery and pumps for irrigation); --possible speculation emerging from a large movement of investor capital out of equities and into commodities futures and related instruments; --growth in biofuels production and consumption. While experts argue about their relative importance, each of these factors appears to be having an impact. The biofuels issue is of particular importance since much of the growth in biofuels production has been driven by policy decisions in Washington and Brussels. For this reason, I will address it briefly. In 2008 the US will convert approximately one-quarter (23.7percent) of our corn production into biofuels. That's an increase from 20 percent last year and 14 percent the year before. In short, we're rapidly diverting larger portions of our corn supply to fuel, leaving less for food. Dedicating 3.1 million bushels of corn for ethanol this year will take more than one-tenth of the global corn supply off the market for food and feed. The US is a massive producer of corn, harvesting more than 40 percent of the world's corn supply. The US is also a massive exporter of corn, supplying nearly twice as much corn as all the other exporters combined. USDA's Economic Research Service noted that since 2002/3, nearly 30 percent of the global increase in cereals demand came from US corn ethanol. So, reduced supply and/or higher prices in the US corn market can have significant implications for the global corn supply and global prices for food and feed. Although ethanol mandates and subsidies directly impact corn prices, they also have implications for other agricultural commodities. This is because higher corn prices encourage farmers to commit more acreage and agricultural inputs to corn production.This leaves less acreage and agricultural inputs available for other crops, especially soybeans, which are often planted in alternate years with corn. As a result, production for other commodities like soybeans is lower and prices are higher. In 2007, US soybean plantings decreased by 15.7 percent to about 63.3 million acres from 2006 levels. Additional demand for soybeans is also generated through US government encouragement for biodiesel production driving prices up 40 percent from to $10.80 per bushel from 2006 to 2007. Last month, the World Economic Outlook identified increased biofuels consumption as a major driver of food price increases: "Rising biofuels production in the United States and the European Union has boosted demand for corn, rapeseed oil, and other grains and edible oils. Although biofuels still account for only 1.5 percent of the global liquid fuels supply, they accounted for almost half the increase in the consumption of major food crops in 2006-7, mostly because of corn-based ethanol produced in the United States. Biofuel demand has propelled the prices not only for corn, but also for other grains, meat, poultry and dairy through cost-push and crop and demand substitution effects" Finally, the International Food & Policy Research Institute (IFPRI), one of the premier organizations tracking food and hunger issues, estimates that biofuels will drive up corn prices by between 27percent and 72percent by 2020, depending on the scenario analyzed. Other commodities (oil seeds used for biodiesel) would rise by 18 percent to 44 percent. IFPRI stated, "in general, subsidies for biofuels that use agricultural production resources are extremely antipoor because they implicitly act as a tax on basic food, which represents a large share of poor people's consumption expenditures and becomes even more costly as prices increase..."

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Food Prices: Bad- Need Cellulose

ABJ

Corn ethanol drives up commodity prices- impoverishing developing economiesonly advanced biofuels can solve.
David Rotman, Editor of Technololgy Review, “The price of biofuels: making ethanol from corn is expensive. Better biofuels are years away from the gas tank. Farmers are reluctant to change their practices. But do we really have any alternative to biofuels?” Technology Review, Vol. 111 No. 1, January 1, 2008. In the May/June 2007 issue of Foreign Affairs, C. Ford Runge, a professor of applied economics and law at Minnesota, cowrote an articletitled "How Biofuels Could Starve the Poor," which argued that "the enormous volume of corn required by the ethanol industry is sending shock waves through the food system." Six months later, sitting in a large office from which he directs the university's Center for International Food and Agricultural Policy, Runge seems bemused by the criticism that his article received from local politicians and those in the ethanol business. But he is steadfast in his argument: "It is clearly the case that milk prices, bread prices, are all rising at three times the average rate of increase of the last 10 years. It's appreciable, and it is beginning to be appreciated." The recent OECD report, released in early September, is just the latest confirmation of his warnings, says Runge. And because a larger percentage of their income goes to food, he says, "this is really going to hit poor people." Since the United States exports about 20 percent of its corn, the poor in the rest of the world are at particular risk. Runge cites the doubling in the price of tortillas in Mexico a year ago. All these factors argue against the promise of corn ethanol as a solution to the energy problem. "My take," says Polasky, "is that [ethanol] is only going to be a bit player in terms of energy supplies." He calculates that even if all the corn planted in the United States were used for ethanol, the biofuel would still displace only 12 percent of gasoline consumption. "If I'm doing this for energy policy, I don't see the payback," he says. "If we're doing this as farm support policy, there may be more merit there. But we're going to have to go to the next generation of technology to have a significant impact on the energy markets."

ETHANOL FOCUS FAILS- IT ONLY DRIVES UP PRICES.
<Matt
Metcalf,
software
developer,
june,2007,
website,
http://sufficientlyadvanced.blogspot.com>/

 As predicted by many, increasing demand for corn--driven largely by ethanol plants and foreign buyers--has driven corn prices to their highest level in more than a decade. Increased corn prices will have a ripple effect on many segments of the economy. First, the obvious: higher prices on corn that we eat. And not just corn-on-the-cob and canned/frozen corn; prices will increase for corn tortillas and shells, corn chips, and anything that uses high-fructose corn syrup. Between them, that covers a huge array of products. But corn is also widely used as livestock feed, so higher prices for corn will also increase prices for meat. As farmers and ranchers shift to using other grains--such as wheat, oats, and barley--for feeding their livestock, the increased demand for those grains will also increase prices for products based on those... flours, breads, oatmeal, beer, and countless other products are based on the grains grown in this country. And I haven't even mentioned the ethanol itself yet. Higher prices for corn will obviously increase the input costs for ethanol production, making ethanol less economical than it currently is. It is increasingly obvious that corn-based ethanol will never be the cure (or even a significant
Page 48 of 139

Miami inst.

ABJ

part of the cure) for our energy woes. A study conducted by the University of Minnesota has already demonstrated that if all corn grown in this country were converted to ethanol (leaving nothing for animal feed, human consumption, or as corn syrup for feeding our gluttunous desire for sugar), it would be able to offset 12% of our gasoline demand. Until cellulosic ethanol techniques are perfected, trying to use ethanol as a fuel source is a "solution" that will only benefit the farmers who are enjoying the higher prices.


Cellulosic
ethanol
key
to
prevent
higher
corn
prices


PG,
Progressive
Grocer,
4‐20‐2007,
Lexis

WASHINGTON,
D.C.
- With increased demands on corn from the ethanol industry, Congress and the Bush Administration should consider tax incentives
and
other
legislative
vehicles
to
support
energy‐based
opportunities
for
animal
agriculture
and
 minimize the adverse affects of rising input costs
on
meat
and
poultry
packers
and
processors,
said
AMI
President
and
 CEO
J.
Patrick
Boyle
in
testimony
submitted
this
week
to
the
House
Committee
on
Ways
and
Means.
Boyle
said
that
 dramatically increased demand for corn has pressed market forces to demand higher feed prices.
As
a
result,
animal
agriculture
 producers
are
considering
alternatives
to
their
feeding,
nutrition,
and
dietary
regimen,
which
in
turn
impacts
meat
 and
poultry
quality,
consumer
offerings,
livestock
and
poultry
farm
efficiency,
and
the
management
of
livestock
and
 poultry
operations.
Boyle urged Congress to
take
four
key
actions:
‐
Expand research in
ethanol
byproduct
safety,
quality,
 and
usability
and
renewable energy technologies, such as
renewable
diesel,
biogas
and
cellulosic.


Corn-based ethanol causes food price spikes – cellulosic is best
Lt.
Col
Amidon,
USAF,
Joint
Force
Quarterly,
10‐1‐2005,
n.
39,
p.
68

Corn is a poor choice for ethanol feedstock since it is the most irrigation-and fertilizer-intensive crop grown
in
the
United
States,
 and corn used for ethanol drives cattle feed prices higher, creating
hidden
costs at the grocery store.
Although
a
nascent
corn


ethanol
industry
has
developed,
future

expansion
should
be
discouraged
through
a
removal
of
the
tax
regime.
 Unsubsidized
corn
ethanol
actually
costs
$2.24
per
gallon
to
produce,
making
it
uneconomical
except
in
times
of
very
 high
oil
prices.
(13)



The
biorefinery
and

cellulosic
ethanol.

Instead of valuable corn, the biorefinery produces ethanol using
the
starches
and
cellulose present in agricultural waste
and
byproducts
such
as
corn
stalks,
rice
straw,
paper
mill
 waste,
recycled
urban
waste,
and
dedicated
woody
stemmed
crops.
(14)
Many of these sources
of

cellulosic
ethanol

 are
considered
negative-cost feed stocks, meaning
they
have
no
food
value
and
farmers must pay for their disposal.
This
 gives

cellulosic
ethanol

a
much
higher
net
energy
balance
than
corn‐based
ethanol.
Studies
at
candidate
biorefinery
 sites
in
Indiana
and
Nebraska
found
that
collocating
ethanol
biorefineries
with
existing
power
plants
would
allow
 production
for
$1.05/gallon
to
$1.60/gallon
depending
on
the
biomass
selected.

Cellulosic
ethanol

offers
great
 promise
for
rural
areas
that
have
seen
considerable
depopulation
due
to
modern
farming
methods.
 

Page 49 of 139

Miami inst.
Cellulosic doesn’t increase food prices

 Youmna
Sakr,
Contributing
Writer,
Risk
Management,
4‐1‐2007,
Lexis


ABJ

Cellulosic ethanol is different from corn-based ethanol in that itis produced from the cellulose of plant material derived from agricultural waste such as corn stalks and wood chips.
While
it
is
still
under
development,
it
is
anticipated
that
cellulosic


ethanol
will
require
less
energy
to
produce
than
corn‐based
ethanol,
and
as
a
fuel,
will
result
in
far
less
carbon
 dioxide
emissions
with
levels
85%
less
than
gasoline
and
25%
less
than
traditional
ethanol.
The
reduced
emissions
 make
it
less
susceptible
to
high
pollution
taxes
as
37
governors
are
prepared
to
impose
measures
to
cut
the
carbon
 content
of
fuels.
And since cellulose is not edible, there is little to no effect on food prices.


Page 50 of 139

Miami inst.
Corn Ethanol Bad – Food Prices
Daniel
Howden,
The
Independent
(London),
6/23/2007,
“The
fight
for
the
world's
food,”
 http://www.independent.co.uk/extras/features/the‐fight‐for‐the‐worlds‐food‐454279.html


ABJ

Excessive use of corn for ethanol increases food prices all over the world – corn affects other commodities

Then
there
is
corn.
While
relatively
little
corn
is
eaten
directly
it
is
of
pivotal
importance
to
the
food
economy
as
so
 much
of
it
is
consumed
indirectly.
The
milk,
eggs,
cheese,
butter,
chicken,
beef,
ice
cream
and
yoghurt
in
the
average
 fridge
is
all
produced
using
corn
and
the
price
of
every
one
of
these
is
influenced
by
the
price
of
corn.
In
effect,
our
 fridges
are
full
of
corn.
In
the
past
12
months
the
global
corn
price
has
doubled.
The
constant
aim
of
agriculture
is
to
 produce
enough
food
to
carry
us
over
to
the
next
harvest.
In
six
of
the
past
seven
years,
we
have
used
more
grain
 worldwide
than
we
have
produced.
As
a
result
world
grain
reserves
‐
or
carryover
stocks
‐
have
dwindled
to
57
days.
This
 is
the
lowest
level
of
grain
reserves
in
34
years.
The
reason
for
the
price
surge
is
the
wholesale
diversion
of
grain
crops
 into
the
production
of
ethanol.
Thirty
per
cent
of
next
year's
grain
harvest
in
the
US
will
go
straight
to
an
ethanol
 distillery.
As
the
US
supplies
more
than
two‐thirds
of
the
world's
grain
imports
this
unprecedented
move
will
affect
food
 prices
everywhere.
In
Europe
farmers
are
switching
en
masse
to
fuel
crops
to
meet
the
EU
requirement
that
bio‐fuels
 account
for
20
per
cent
of
the
energy
mix.



Ethanol causes higher food prices, starving millions
Jeff
Goodell,
contributing
editor
at
Rolling
Stone
and
a
frequent
contributor
to
the
New
York
Times
Magazine,
8/9/2007,
 “The
Ethanol
Scam:
One
of
America's
Biggest
Political
Boondoggles,”
 http://www.rollingstone.com/politics/story/15635751/the_ethanol_scam_one_of_americas_biggest_political_boondog gles/3
 But
the
biggest
problem
with
ethanol
is
that
it
steals
vast
swaths
of
land
that
might
be
better
used
for
growing
food.
In
a
 recent
article
in
Foreign
Affairs
titled
"How
Biofuels
Could
Starve
the
Poor,"
University
of
Minnesota
economists
C.
Ford
 Runge
and
Benjamin
Senauer
point
out
that
filling
the
gas
tank
of
an
SUV
with
pure
ethanol
requires
more
than
450
 pounds
of
corn
‐‐
roughly
enough
calories
to
feed
one
person
for
a
year.
Thanks
in
large
part
to
the
ethanol
craze,
the
 price
of
beef,
poultry
and
pork
in
the
United
States
rose
more
than
three
percent
during
the
first
five
months
of
this
 year.
In
some
parts
of
the
country,
hog
farmers
now
find
it
cheaper
to
fatten
their
animals
on
trail
mix,
french
fries
and
 chocolate
bars.
And
since
America
provides
two‐thirds
of
all
global
corn
exports,
the
impact
is
being
felt
around
the
 world.
In
Mexico,
tortilla
prices
have
jumped
sixty
percent,
leading
to
food
riots.
In
Europe,
butter
prices
have
spiked
 forty
percent,
and
pork
prices
in
China
are
up
twenty
percent.
By
2025,
according
to
Runge
and
Senauer,
rising
food
 prices
caused
by
the
demand
for
ethanol
and
other
biofuels
could
cause
as
many
as
600
million
more
people
to
go
 hungry
worldwide.



Page 51 of 139

Miami inst.

ABJ

Corn Ethanol Bad – Food Prices Corn based ethanol causes poverty in the third world – major policy change to pursue cellulosic ethanol is key
Runge
and
Senauer
2007,
C.
Ford
Runge
is
Distinguished
McKnight
University
Professor
of
Applied
Economics
and
Law
and
Director
of
the

Center
for
International
Food
and
Agricultural
Policy
at
the
University
of
Minnesota.
Benjamin
Senauer
is
Professor
of
Applied
Economics
and
Co‐ director
of
the
Food
Industry
Center
at
the
University
of
Minnesota,
May/June
2007,
“How
Biofuels
Could
Starve
the
Poor,”
Foreign
Affiars,
Vol.
86,
 Issue
3,
Ebsco


The
International
Food
Policy
Research
Institute,
in
Washington,
D.C.,
has
produced
sobering
estimates
of
the
potential
 global
impact
of
the
rising
demand
for
biofuels.
Mark
Rosegrant,
an
IFPRI
division
director,
and
his
colleagues
project
 that
given
continued
high
oil
prices,
the
rapid
increase
in
global
biofuel
production
will
push
global
corn
prices
up
by
20
 percent
by
2010
and
41
percent
by
2020.
The
prices
of
oilseeds,
including
soybeans,
rapeseeds,
and
sunflower
seeds,
are

projected
to
rise
by
26
percent
by
2010
and
76
percent
by
2020,
and
wheat
prices
by
11
percent
by
2010
and
30
percent
by
2020.
In
 the
poorest
parts
of
sub‐Saharan
Africa,
Asia,
and
Latin
America,
where
cassava
is
a
staple,
its
price
is
expected
to
increase
by
33
 percent
by
2010
and
135
percent
by
2020.
The
projected
price
increases
may
be
mitigated
if
crop
yields
increase


substantially
or
ethanol
production
based
on
other
raw
materials
(such
as
trees
and
grasses)
becomes
commercially
 viable.
But
unless
biofuel
policies
change
significantly,
neither
development
is
likely.

The
production
of
cassava‐based
 ethanol
may
pose
an
especially
grave
threat
to
the
food
security
of
the
world's
poor.
Cassava,
a
tropical
potato‐like
tuber

also
known
as
manioc,
provides
one‐third
of
the
caloric
needs
of
the
population
in
sub‐Saharan
Africa
and
is
the
primary
staple
for
 over
200
million
of
Africa's
poorest
people.
In
many
tropical
countries,
it
is
the
food
people
turn
to
when
they
cannot
afford
 anything
else.
It
also
serves
as
an
important
reserve
when
other
crops
fail
because
it
can
grow
in
poor
soils
and
dry
conditions
and
 can
be
left
in
the
ground
to
be
harvested
as
needed.



Production of corn ethanol increases global food prices without fulfilling energy needs
<Sarah Tarver-Wahlquist and Tracy Fernandez Rysavy, “Corn Ethanol Isnʼt the Answer: A Co-Op American Exposé”, Co-Op America Quarterly, Summer 2007 (national non profit organization focusing on economic action to solve social and environmental problems. Co-Op Quarterly is their magazine)>.

The price of yellow corn on the world market has already hit a ten-year high, in part due to ethanol’s rising popularity, says the BBC. But while having the price of Doritos and hamburgers go up in the US hardly seems like a crisis, consider the domino effect. The US corn crop accounts for 40 percent of the global harvest, supplying 70 percent of the world’s corn exports and about 25 percent of total world grain exports, according to the Earth Policy Institute (EPI). Substantially reducing this export flow to make corn ethanol for our cars “would send shock waves throughout the world economy,” says Lester Brown, EPI’s founder. Corn prices are tied to other grain prices, so as the cost of corn rises, world grain prices will likely follow suit. While US consumers, particularly low-income families, will see significant hikes in food prices, the world’s poor, who rely heavily on imported grain, will be hit the hardest. In May, Ian Cherret, head of the United Nations Food and Agriculture Organization, warned that people in Guatemala were facing a hunger crisis, due in large part to the rising cost of corn. The average benchmark price for corn in Guatemala rose almost 30 percent in the last year. “The increase in the price of maize has left this sector of the population much more vulnerable than they were before,” Cherret told Reuters. And while the world’s poorest would be sent reeling by exorbitant grain prices, we in the US wouldn’t even gain all that much: Converting the entire US grain harvest to corn for ethanol would satisfy 16 percent of our fuel needs, while the corn used to fill a 25-gallon vehicle tank with ethanol one time would feed one person for an entire year, says Brown.
Page 52 of 139

Miami inst.
Corn Ethanol Bad – Food Prices Ethanol increases food prices – makes it impossible to fill global demand
The
Australian,
3/8/2008,
“Biofuels
threaten
'billions
of
lives,'”
 http://www.theaustralian.news.com.au/story/0,25197,23336840‐11949,00.html


ABJ

THE
rush
towards
biofuels
is
threatening
world
food
production
and
the
lives
of
billions
of
people,
the
British
 Government's
Chief
Scientific
Adviser
warned
yesterday.
British
ministers
have
committed
to
large
increases
in
the
use
 of
biofuels
over
coming
decades.
But
John
Beddington
described
the
potential
effects
of
food
shortages
as
the
"elephant
 in
the
room"
and
a
problem
to
rival
climate
change.
"It's
very
hard
to
imagine
how
we
can
see
the
world
growing
 enough
crops
to
produce
renewable
energy
and
at
the
same
time
meet
the
enormous
demand
for
food,"
he
told
a
 sustainability
conference
in
London.
"The
supply
of
food
really
isn't
keeping
up."
His
concerns
were
echoed
yesterday
by
 UN
World
Food
Program
director
Josette
Sheeran
who
told
the
European
parliament:
"The
shift
to
biofuels
production
 has
diverted
lands
out
of
the
food
chain.
"Food
prices
such
as
palm
oil
in
Africa
are
now
set
at
fuel
prices.
It
may
be
a
 bonanza
for
farmers
‐
I
hope
it
is
true
‐
but
in
the
short
term,
the
world's
poorest
are
hit
hard."
By
2030,
rising
world
 populations
would
require
a
50
per
cent
increase
in
food
production,
Professor
Beddington
said.
By
2080,
food
 production
must
double.
But
the
rush
to
biofuels
‐
allegedly
environmentally
friendly
‐
meant
increasing
amounts
of
 arable
land
were
being
given
over
to
fuel
rather
than
food.
Already
biofuels
have
contributed
to
rapid
rises
in
 international
wheat
prices.



Corn ethanol boosts food prices
<L.
 Leon
 Geyer,
 Professor,
 Virginia
 Tech,
 Department
 of
 Agricultural
 and
 Applied
 Economics,
 Phillip
 Chong,
 Research
 Assistant,
 Virginia
 Tech,
 Department
 of
 Agricultural
 and
 Applied
 Economics
 and
 Bill
 Hxue
 Research
 Associate,
 Virginia
 Tech,
Department
of
Agricultural
and
Applied
Economics,
12
Drake
J.
Agric.
L.
61,
2007,
Lexis.>

 Lester
Brown,
president
of
Washington
D.C.
based
environmental
research
group
Earth
Policy
Institute,
stated
that
"the
 competition
for
grain
between
the
world's
800
million
motorists
who
want
to
maintain
their
mobility
and
its
2
billion
 poorest
people
who
are
simply
trying
to
survive
is
emerging
as
an
epic
issue."
The
economic
pressure
created
by
corn's
 increasing
demand
and
limited
supply
has
already
been
felt
around
the
world.
Since
the
summer
of
2006,
"average
corn
 prices
have
leapt
to
nearly
$
4
a
bushel,"

n106
the
highest
in
a
decade.
Due
to
the
fact
corn
is
the
largest
component
of
 animal
feed,
the
National
Chicken
Council
has
estimated
that
"ethanol
demand
has
already
increased
the
price
of
 chicken
by
six
cents
per
pound
wholesale."
n107
In
Mexico,
increasing
corn
prices
have
tripled
or
quadrupled
the
price
of
 tortillas.
n108
This
has
exposed
the
"country's
outsize
dependence
on
tortillas
in
its
diet
‐‐
especially
among
the
poor."
n109
 The
situations
within
the
U.S.
chicken
and
Mexican
tortilla
industries
illustrate
the
interconnectedness
of
the
agricultural
 market
system.
According
to
William
Lapp,
the
president
of
Advanced
Economic
Solutions,
such
a
situation
may
 foreshadow
"a
fairly
dramatic
inflation
scenario
for
food
costs."



Page 53 of 139

Miami inst.
Corn Ethanol Bad – Food Prices Corn ethanol increases food prices, threatening the lives of the poor. It doesn’t produce much fuel
Lester
R.
Brown,
president
of
the
Earth
Policy
Institute,
8/16/2006,
“Ethanol
could
leave
the
world
hungry,”
 http://money.cnn.com/magazines/fortune/fortune_archive/2006/08/21/8383659/index.htm


ABJ

The
growing
myth
that
corn
is
a
cure‐all
for
our
energy
woes
is
leading
us
toward
a
potentially
dangerous
global
fight
for
 food.
While
crop‐based
ethanol
‐the
latest
craze
in
alternative
energy
‐
promises
a
guilt‐free
way
to
keep
our
gas
tanks
 full,
the
reality
is
that
overuse
of
our
agricultural
resources
could
have
consequences
even
more
drastic
than,
say,
being
 deprived
of
our
SUVs.
It
could
leave
much
of
the
world
hungry.
We
are
facing
an
epic
competition
between
the
800
 million
motorists
who
want
to
protect
their
mobility
and
the
two
billion
poorest
people
in
the
world
who
simply
want
to
 survive.
In
effect,
supermarkets
and
service
stations
are
now
competing
for
the
same
resources.
This
year
cars,
not
 people,
will
claim
most
of
the
increase
in
world
grain
consumption.
The
problem
is
simple:
It
takes
a
whole
lot
of
 agricultural
produce
to
create
a
modest
amount
of
automotive
fuel.
The
grain
required
to
fill
a
25‐gallon
SUV
gas
tank
 with
ethanol,
for
instance,
could
feed
one
person
for
a
year.
If
today's
entire
U.S.
grain
harvest
were
converted
into
fuel
 for
cars,
it
would
still
satisfy
less
than
one‐sixth
of
U.S.
demand.
Worldwide
increase
in
grain
consumption
The
U.S.
 Department
of
Agriculture
reports
that
world
grain
consumption
will
increase
by
20
million
tons
this
year,
roughly
1%.
 Of
that,
14
million
tons
will
be
used
to
fuel
cars
in
the
U.S.,
leaving
only
six
million
tons
to
cover
the
world's
growing
 food
needs.
Already
commodity
prices
are
rising.
Sugar
prices
have
doubled
over
the
past
18
months
(driven
in
part
by
 Brazil's
use
of
sugar
cane
for
fuel),
and
world
corn
and
wheat
prices
are
up
one‐fourth
so
far
this
year.
For
the
world's
 poorest
people,
many
of
whom
spend
half
or
more
of
their
income
on
food,
rising
grain
prices
can
quickly
become
life
 threatening.



Biofuels from foods combines with rising demand to increase global food prices
Daniel
Howden,
The
Independent
(London),
6/23/2007,
“The
fight
for
the
world's
food,”
 http://www.independent.co.uk/extras/features/the‐fight‐for‐the‐worlds‐food‐454279.html
 Like
any
other
self‐respecting
trend
this
one
now
has
its
own
name:
agflation.
Beneath
this
harmless‐sounding
piece
of
 jargon
‐
the
conflation
of
agriculture
and
inflation
‐
lie
two
main
drivers
that
suggest
that
cheap
food
is
about
to
become
 a
thing
of
the
past.
Agflation,
to
those
that
believe
that
it
is
really
happening,
is
an
increase
in
the
price
of
food
that
 occurs
as
a
result
of
increased
demand
from
human
consumption
and
the
diversion
of
crops
into
usage
as
an
alternative
 energy
resource.
On
the
one
hand
the
growing
affluence
of
millions
of
people
in
China
and
India
is
creating
a
surge
in
 demand
for
food
‐
the
rising
populations
are
not
content
with
their
parents'
diet
and
demand
more
meat.
On
the
other,
 is
the
use
of
food
crops
as
a
source
of
energy
in
place
of
oil,
the
so‐called
bio‐fuels
boom.
As
these
two
forces
combine
 they
are
setting
off
warning
bells
around
the
world.
Rice
prices
are
climbing
worldwide.
Butter
prices
in
Europe
have
 spiked
by
40
per
cent
in
the
past
year.
Wheat
futures
are
trading
at
their
highest
level
for
a
decade.
Global
soybean
 prices
have
risen
by
a
half.
Pork
prices
in
China
are
up
20
per
cent
on
last
year
and
the
food
price
index
in
India
was
up
 by
11
per
cent
year
on
year.
In
Mexico
there
have
been
riots
in
response
to
a
60
per
cent
rise
in
the
cost
of
tortillas.



Page 54 of 139

Miami inst.
Corn Ethanol Bad – Food Prices Production of biofuels is propelling high food prices

ABJ

John
Ward
Anderson,
Washington
Post,
5/30/2008,
“Food
Prices
Predicted
to
Ease
Before
Entering
Steady
Climb,”
 http://www.washingtonpost.com/wp‐dyn/content/article/2008/05/29/AR2008052901023_pf.html
 The
recent
steep
jump
in
global
food
prices
should
ease
in
the
near
term,
according
to
a
new
report,
but
prices
over
the
 next
decade
are
likely
to
remain
high,
spurred
by
the
rising
cost
of
oil,
the
declining
dollar
and
increasing
demand
for
 biofuels.

The
rush
to
invest
heavily
in
ethanol
and
other
biofuels
needs
to
be
reevaluated,
particularly
since
the
benefits
 "are
at
best
modest,
and
sometimes
even
negative,"
according
to
the
annual
global
agriculture
assessment
by
the
U.N.
 Food
and
Agriculture
Organization
(FAO)
and
the
Organization
for
Economic
Co‐Operation
and
Development
(OECD).

 About
33
percent
of
the
expected
rise
in
food
prices
over
the
next
decade
can
be
tied
to
biofuels,
OECD
agriculture
 official
Loek
Boonekamp
said,
but
the
economic,
environmental
and
energy‐security
benefits
of
diverting
agriculture
 products
to
fuel
"are
probably
smaller
than
commonly
expected."

OECD
Secretary
General
Angel
Gurría
told
reporters
 in
releasing
the
72‐page
report
that
"we
do
not
expect
the
current
price
levels
to
last"
but
that
"the
average
of
most
 agricultural
commodity
prices
over
the
next
10
years
will
still
exceed
the
average
of
the
previous
decade
by
about
10
to
 50
percent
in
real
terms,
depending
on
the
commodity
you
look
at."



Use of corn for ethanol increases food prices due to high oil prices
Fred
Magdoff
is
professor
emeritus
of
plant
and
soil
science
at
the
University
of
Vermont
in
Burlington
and
a
director
of
 the
Monthly
Review
Foundation,
May
2008,
“The
World
Food
Crisis:
Sources
and
Solutions,”
 http://www.monthlyreview.org/080501magdoff.php
 The
reasons
for
these
soaring
food
prices
are
fairly
clear.
First,
there
are
a
number
of
issues
related
directly
or
indirectly
 to
the
increase
in
petroleum
prices.
In
the
United
States,
Europe,
and
many
other
countries
this
has
brought
a
new
 emphasis
on
growing
crops
that
can
be
used
for
fuel—called
biofuels
(or
agrofuels).
Thus,
producing
corn
to
make
 ethanol
or
soybean
and
palm
oil
to
make
diesel
fuel
is
in
direct
competition
with
the
use
of
these
crops
for
food.
Last
 year
over
20
percent
of
the
entire
corn
crop
in
the
United
States
was
used
to
produce
ethanol—a
process
that
does
not
 yield
much
additional
energy
over
that
which
goes
into
producing
it.
(It
is
estimated
that
over
the
next
decade
about
 one‐third
of
the
U.S.
corn
crop
will
be
devoted
to
ethanol
production
[Bloomberg,
February
21,
2008].)
Additionally,
 many
of
the
inputs
for
large‐scale
commercial
agricultural
production
are
based
on
petroleum
and
natural
gas—from
 building
and
running
tractors
and
harvesting
equipment
to
producing
fertilizers
and
pesticides
and
drying
crops
for
 storage.
The
price
of
nitrogen
fertilizer,
the
most
commonly
used
fertilizer
worldwide,
is
directly
tied
to
the
price
of
 energy
because
it
takes
so
much
energy
to
produce.


Page 55 of 139

Miami inst.
Corn Ethanol Bad – Food Insecurity
Current biofuel policy increases food insecurity – cellulose key

ABJ

Rajagopal
et
al
2007,
D
Rajagopal,
Energy
and
Resources
Group,
University
of
California
at
Berkeley,
S
E
Sexton,
D
 Roland‐Holst,
and
D
Zilberman,
Department
of
Agricultural
and
Resource
Economics,
University
of
California
at
Berkeley
 and
Zilberman
is
a
Member
of
Giannini
Foundation,
“Challenge
of
biofuel:
filling
the
tank
without
emptying
the
 stomach?”
11/30/2007,
http://www.iop.org/EJ/article/1748‐9326/2/4/044004/erl7_4_044004.html
 Several
researchers
have
analyzed
the
environmental
and
ecological
implications
of
biofuels
in
detail.
But
there
has
 been
little
economic
assessment
of
the
effects
on
various
markets.
In
this
paper,
we
have
tried
to
delineate
some
of
the
 short‐run
effects
of
expansion
in
US
ethanol
production
on
welfare.
A
simple
welfare
analysis
of
US
corn
ethanol
 suggests
that
the
impact
of
producing
biofuels
from
food
crops
will
be
greater
on
food
prices
than
energy
prices.
We
 expect
further
expansion
of
current
biofuels
(and
even
future
biofuels)
to
threaten
food
security.
A
smooth
transition
to
 a
biofuel‐intensive
future
requires
considerable
technical
innovation,
such
as
agricultural
productivity
growth,
 development
and
commercialization
of
cellulosic
conversion,
and
a
reduction
in
the
resource
intensity
of
biofuels.


Corn ethanol increases destabilizes the food supply
Byron
King,
Peak
oil
correspondent
at
Whiskey
&
Gunpowder
(Macroeconomic
E‐Newsletter),
1/11/2007,
“Investing
in
 Ethanol,”
http://www.whiskeyandgunpowder.com/Archives/2007/20070111.html
 The
take‐away
point
here
is
that
the
full‐court
press
now
ongoing
in
the
U.S.
to
build
plants
and
manufacture
ethanol
 from
agricultural
corn
will
not
provide
any
sort
of
long‐term
energy
salvation
for
the
nation.
This
major
industrial
and
 agricultural
effort
will
yield
ethanol
product
equivalent
to
about
3.5%
of
daily
U.S.
oil
consumption.
According
to
the
 statistics,
as
published
in
The
New
York
Times,
no
less,
ethanol
production
from
existing
plants
and
plants
under
 construction
is
on
track
to
consume
about
half
of
the
U.S.
corn
crop.
In
some
localities
of
the
U.S.
Midwest,
almost
all
 corn
is
already
under
agreement
to
be
sold
for
ethanol
production,
essentially
leaving
no
corn
for
other
local
farming
 needs.
This
will
certainly
cause
a
ripple
effect
throughout
many
farming
communities,
all
the
way
to
the
shelves
of
the
 grocery
stores.
From
a
national
security
standpoint,
large‐scale
ethanol
production
from
corn
will
not
make
the
nation
 more
secure
in
any
measurable
way.
It
will
certainly
destabilize
the
nation's
food
supply
and
disrupt
traditional
export
 patterns.



Page 56 of 139

Miami inst.
AT: Market Solves Food Prices
Increased production damages the environment and isn’t efficient

ABJ

Byron
King,
Peak
oil
correspondent
at
Whiskey
&
Gunpowder
(Macroeconomic
E‐Newsletter),
1/11/2007,
“Investing
in
 Ethanol,”
http://www.whiskeyandgunpowder.com/Archives/2007/20070111.html
 So
corn‐based
food,
and
products
derived
from
corn,
will
become
more
expensive.
And
I
know,
so
you
don't
have
to
 remind
me,
that
farmers
will
respond
to
the
price
signals
and
grow
more
corn.
But
I
hope
you
also
realize
that
the
 farmers
will
do
this
by
using
more
tractor
fuel,
fertilizer,
pesticide,
herbicide,
and
myriad
of
other
substances
derived
 from
oil
and
natural
gas.
And
the
farmers
will
put
into
production
the
more
marginal
agricultural
lands,
with
the
less
 productive
soils,
which
will
then
become
depleted
of
soil
moisture
and
nutrients.
There
is
no
free
lunch.


Page 57 of 139

Miami inst.
Solvency: Commercialization Solves Land Use

ABJ

Commercialization and advanced cellulosic tech will solve land use tensions.
W. Michael Griffin and Lester B. Lave, Executive Director of the Green Design Institute and Professor of Economics at the Tepper School of Business- Carnegie Mellon University, respectively, “Cellulosic Ethanol in an Oil and Carbon Constrained World,” in A HIGH GROWTH STRATEGY FOR ETHANOL, 2006, available online at:
www.aspeninstitute.org/atf/cf/%7BDEB6F227-659B-4EC8-8F84-8DF23CA704F5%7D/EEEethanol2.pdf.

Land use is very sensitive to energy crop yields and the amount of ethanol produced from each ton of crop. Although the land use requirements quoted here might seem high, we routinely plant 80 million acres of corn and another 80 million acres of soybean. Corn and soybean are good rotation crops and there is a market for the protein from the soybeans. Current R&D is developing methods for harvesting protein from switchgrass, reducing the need for soybeans. This could free acreage for energy crop production. More importantly, the future developments in cellulosic ethanol production and “learning by doing” with the first plants will greatly reduce land requirements.

Page 58 of 139

Miami inst.
AT: Hurts Corn Farmers
Current ethanol producing corn farmers will be able to easily transition to cellulose.

ABJ

W. Michael Griffin and Lester B. Lave, Executive Director of the Green Design Institute and Professor of Economics at the Tepper School of Business- Carnegie Mellon University, respectively, “Cellulosic Ethanol in an Oil and Carbon Constrained World,” in A HIGH GROWTH STRATEGY FOR ETHANOL, 2006, available online at:
www.aspeninstitute.org/atf/cf/%7BDEB6F227-659B-4EC8-8F84-8DF23CA704F5%7D/EEEethanol2.pdf.

How do we get there from here? The first step in an orderly transition to a sustainable ethanol fuel supply is an increase in the production of corn ethanol. Even given a four-year lead time for development and construction of plants, corn ethanol could increase production more rapidly than envisioned by EPAct. Potentially, corn ethanol could provide as much as 14 billion gallons of ethanol. Building facilities to transform corn into ethanol helps develop the use of ethanol, paving the way for cellulosic ethanol in the future. The corn facilities can be fitted with a new “front end” at some future time to handle cellulosics, corn stalks and leaves, and switchgrass. The resulting ethanol is identical, regardless of the feedstock, so integrating more corn ethanol into the fuel supply is moving in the right direction. We envision a policy that could maximize this production.

Page 59 of 139

Miami inst.
Food Prices: Increasing
THE SQ LOCKS IN ROCKETING FOOD PRICES

ABJ

Wallace E. Tyner, Purdue University, Paper presented at the National Agricultural Biotechnology Council Conference, “Biofuels, Energy Security, and Global Warming Policy Interaction,” NATURE, Vol 444 No 7, December 2006. Certainly, one option is to do nothing – to let the other corn using sectors adjust to higher corn prices. But as can be seen from the results in the ethanol economics and sensitivity analyses sections above, that option could lead to substantially higher corn prices than we have seen historically. It certainly would lead to higher costs for the livestock industry (is happening already) and ultimately for consumers of livestock products. It also would lead to reduced corn exports. The breakeven corn prices provided above are maximums the ethanol industry could pay to retain profitability. Whether these prices would be reached would depend on the rate of growth of the ethanol industry compared with the rate of growth of corn supply. The March planting intentions report revealed an expected corn planted acreage of 90.5 million acres, and increase of 15 percent over 2006. With that report, the high corn prices moderated somewhat. However, we can certainly expect to see continued pressure on corn prices if no change is made in federal subsidy policy.

Page 60 of 139

Miami inst.

ABJ

Page 61 of 139

Miami inst.
Food Prices: Increasing

ABJ

Food price inflation is unprecedented in duration and breadth of commodities.
James R. Lyons, Vice President Policy and Communications Oxfam, America Committee on Senate Foreign Relations, CQ Congressional Testimony, May 14, 2008. Likewise, international market observers expected low and even declining agriculture commodity prices. The UN Food and Agriculture Organization said, "Farmers and countries that depend on commodity exports have to contend with the longterm decline and short-term volatility of real commodity prices on international markets." Instead, agricultural commodity prices have risen steadily over four years, and accelerated dramatically in the last year. The international food price index increased by 9 percent in 2006, but accelerated to a 40 percent increase in 2007. Food prices have continued this dramatic rise in the first three months of 2008. Price volatility in agricultural commodities is not uncommon. What is unusual, however, is the confluence of the hike in world prices of nearly all major food and feed commodities. This means there is no safety valve for consumers seeking cheaper alternatives. There are also indications that these high prices may be sustained over time - meaning that the shock of higher commodity prices may not be a short-term problem, but a longer term stress that needs a strategic and comprehensive response.

The global food crisis is putting pressure on aid agencies
ROSALIE WESTENSKOW, journalist, “Farm bill hikes biofuels funding,” UPI Energy May 22, 2008. Some of the first warnings about the high food price crisis came not directly from people facing food insecurity, but from the humanitarian agencies trying to assist them. In January, the UN World Food Program (WFP) put out a special appeal for Afghanistan noting that millions of Afghanis could no longer afford to buy the wheat that is a staple in that country. Since November 2007, the price of bread in Kabul has increased over 90percent, from $0.11 to $0.21. As a result, 1.4 million people in rural areas and 1.1 million in urban areas have been pushed into high risk for food insecurity. Later, the WFP made an emergency appeal for an additional $755 million, saying that high food prices had made it impossible to fulfil its 2008 plan to provide food assistance to 73 million people in need. The WFP's original budget was $2.9 billion. Although new pledges have been made, the WFP's need has not yet been met. As an example of the strains being felt, the WFP has recently announced that it will suspend a school feeding program for 450,000 children in Cambodia in May, unless additional funding is found. Other humanitarian agencies are experiencing similar strains and making difficult decisions. Last week, World Vision International announced it has discontinued feeding programs for more than 1 million people due to increased food costs and lack of funding. CARE has cut the size of its rations in Somalia.

Page 62 of 139

Miami inst.
Food Prices: Kills Third World Consumption
Higher prices hurt poor countries worse- killing their consumption.
ROSALIE WESTENSKOW, journalist, “Farm bill hikes biofuels funding,” UPI Energy May 22, 2008.

ABJ

Higher prices are affecting markets across the world, increasing the costs of staples and generating spontaneous protests and civil unrest. Dozens of countries have experienced "food riots" in recent months. While higher agricultural commodity prices are affecting developed and developing countries, the impact of higher food prices varies greatly in each. Two factors tend to moderate the impact of higher agricultural commodity prices on consumers in the US, and conversely magnify their impact for poor people in developing countries. First, most American consumers don't buy agricultural commodities. American consumers rarely buy wheat, for example. In fact, most households buy wheat flour only occasionally. Instead, we buy bread. And although bread may be made of wheat, the value of the raw commodity in the final product is actually quite small, perhaps 20 percent. This contrasts with poor consumers in developing countries, who often buy food in much less processed forms, as wheat flour or maize kernels. For these consumers, commodity price increases are felt more directly in their purchasing power. The second factor that tends to moderate the impact of high agricultural commodity prices for American consumers is the fact that, on average, American households spend only about 10 percent of their disposable income on food. Of course, for some American households, such as those who are poor or on fixed incomes, food purchases can make up as much as 25 or 30 percent of household expenditures. In fact, food price inflation in the US is at 5 percent and expected to rise to 8 percent this year prompting a record number of Americans to request federal food assistance. This is no small matter in the US, and the situation is only magnified in most other countries where food makes up a larger portion of household incomes. Poor people in developing countries may spend 5080 percent of their income on food. So, when commodity prices increase, the capacity of people in developing countries to respond is much less. In order to feed their families, they must make extremely difficult choices such as reducing food consumption, switching to a less nutritious diet, foregoing medicines or health care, removing their children from school (since they are unable to pay school fees), selling important assets - like livestock or land, or some combination of these actions. These are the awful choices that many poor people are being forced to make today as high food prices are impacting their lives, their families, and their livelihoods.

Page 63 of 139

Miami inst.
Food Prices: Starvation
Billions at risk of starvation.
ROSALIE WESTENSKOW, journalist, “Farm bill hikes biofuels funding,” UPI Energy May 22, 2008.

ABJ

After a very long and steady decline over the course of decades, the number of people facing chronic hunger globally took a disappointing turn upwards in the last few years. By some estimates, 1.2 billion people could be chronically hungry by 2025 - 600 million more than previously predicted. It might seem obvious that lack of food is the cause of hunger. And while that's true, it's actually much more complicated. The truth is that the world does not lack food. Globally, we produce more than enough calories and nutritious food to sustain humanity. While there are droughts and other circumstances that create acute food scarcity, more often hunger is caused by other factors. The World Bank recently studied the connection between food prices and poverty and reported the recent food price increases will expand absolute poverty by 4.5percent. Projected across the globe, this is an increase of more than 100 million people in poverty. Approximately 1 billion people one-eighth of the world's population - survive on an income of less than $1 a day. More than 2.5 billion people scrape by on less than $2 a day. Approximately 850 million are malnourished.This is a vast pool of vulnerable people, spread out across the world. For these people and their families, hunger is a constant worry and a looming possibility.

Food prices cause starvation.
ROSALIE WESTENSKOW, journalist, “Farm bill hikes biofuels funding,” UPI Energy May 22, 2008. I will close, Mr. Chairman, by suggesting that just as many Americans are concerned about the state of the US economy, the price of gasoline, and the cost of food, so, too, are people around the globe. Fortunately, most Americans can 'get by' by "cutting back", by reducing household expenditures, and by tightening their belts. That is not the case for the billions around the world who live on less than two dollars a day. When 60- 80 percent of your disposable income is needed to put food on the table - if you even have a table - increased food prices can literally be a matter of life or death. As the world's most prosperous nation, we have an obligation to lead in helping others. Americans would expect the United States to help those in need. In fact, we have long been the most generous nation in providing humanitarian and other assistance in times of need. The current crisis is a time for leadership, Mr. Chairman. Clearly, t

Page 64 of 139

Miami inst.
Food Prices: Instability
Food riots are breaking out- and threaten to destabilize Pakistan and Afghanistan.
ROSALIE WESTENSKOW, journalist, “Farm bill hikes biofuels funding,” UPI Energy May 22, 2008.

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Where incomes are not rising at the same rate as food inflation, high food prices seem certain to cause an increase in food insecurity and pose risks of widespread food crises in many developing countries. There is a clear connection between social unrest and rising food prices in many parts of the world. In April, World Bank President Zoellick warned that 33 countries around the world face potential social unrest because of the acute hike in food and energy prices. For these countries, where food comprises from half to three quarters of consumption, there is no margin for survival. The United Nation's Global Information Early Warning System identifies 37 countries "in crisis" and "requiring external assistance." Twenty-one of these are in Africa. Not surprisingly, food riots have erupted in the majority of these countries over the past few months. Closest to home, Haiti recently experienced food riots leading to the dismissal of Prime Minister Jacques Edouard Alexis. To illustrate the importance of addressing this issue, one need only look at the impacts of high food prices on a country like Pakistan, a strategically important US ally. Of the 56 million people living in urban areas in Pakistan, about 21 million are now deemed food insecure by the WFP. In response to the food crisis, Pakistan recently banned flour exports to Afghanistan and the government has introduced ration cards for food for the first time since the 1980s. While banning flour exports was understandable for Pakistan, it greatly exacerbates neighbouring Afghanistan's food insecurity. Shortly thereafter, on January 177 the WFP made an appeal for 89,000 metric tons of food including wheat, beans, cooking oils and table salt to help over 2.5 million Afghans.

High commodity prices paralyze developing economies.
ROSALIE WESTENSKOW, journalist, “Farm bill hikes biofuels funding,” UPI Energy May 22, 2008. Further amplifying the effects of high food prices (as well as one factor creating the rapid increase in food prices) is the dramatic increase in global oil prices. Many nations now face the impacts of high energy costs and high food prices, leading to further instability and potentially reversing years of progress in many developing countries. Keep in mind that all but a few of the world's poorest countries depend on foreign oil imports to drive their economies, and world oil price vulnerability - and recent price increases - eat away at limited foreign exchange reserves and national budgets. As the price of oil escalates, the gains of a range of anti- poverty measures are being quickly eroded. Ethiopia, for example, currently spends six times as much on oil than it has received in debt relief from the Heavily Indebted Poor Countries Initiative. The International Energy Agency estimates that for every $10 increase in the price of a barrel of crude oil, the economy of a SubSaharan African oil importing nation is affected more than 10 times as much as the U.S. economy. As a result, rising energy costs are systematically erasing any gains achieved from significant debt forgiveness initiatives and commitments to tackle poverty and hunger. Combined with record commodity prices, the effects can be paralyzing for some nations, in particular those countries referred to as "low income food importing developing countries." Those countries which are also net energy importers are typically hit the hardest.

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Food Prices: Cellulose Solves
Cellulose needed to reduce price pressure on commodities.
ROSALIE WESTENSKOW, journalist, “Farm bill hikes biofuels funding,” UPI Energy May 22, 2008.

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Food price increases have delivered a shock to consumers and governments around the world. The impact of these prices is now being felt and is creating significant turmoil, especially in developing countries that depend on food imports and have large, vulnerable populations. Not only is the current crisis a humanitarian concern, but as evidenced by events over the past several months, it has important ramifications for the security and stability of a large number of nation states. As such, it has important national security ramifications for the United States as well. How we respond as a nation will speak volumes about how we want to see ourselves and have others view us in a global context. In the short term, the US must rapidly respond to appeals for food aid from individual countries and the World Food Program, and reform current US food aid policy to make our food assistance programs more efficient, timely, and cost-effective. In the medium term, the US must revisit and revamp, if necessary, "food to fuel" mandates and supports, with respect to how these policies affect global commodity prices and markets. Further, an accelerated effort to transition from corn-based ethanol production to more advanced cellulosic ethanol is essential to address both domestic energy needs and any inadvertent impacts on world food prices.

Current US policy locks in a dependence on corn- cellulose can free us.
Financial Express, “FOOD CRISIS AND STAID ARGUMENTS,” May 10, 2008. Other factors may have contributed even more significantly. The first among these is biofuels in the US and Latin America. By an FAO study, consumption of cereals has been growing faster in the US at about 11.8% in 2007 over the previous year compared to 1.8% of China and 2.17% of India. About one-third of the corn produce in the US is being used for making ethanol. With crude hovering around $120 per barrel, and the grandly stated addiction to gasoline not giving way at all, farm-level economics will only whet the appetite for biofuels. Every farmer can be in the "oil business" with a little investment. It is known that corn-based biofuels are more inefficient than sugar-based ones or cellulosic ethanol that can be produced on non-agricultural farms. Yet, US tax incentives may have already induced a new addiction-to corn-based biofuel. The second factor is the disincentives to agriculture combined with migrations to cities and choice of other livelihoods.

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Bubble Economy Extensions: Cartels will Manipulate Prices
US DEPENDENCE LEAVES THE OIL CARTELS ALMOST COMPLETELY IN CHARGE OF OIL PRICES. Jean-Michel Bezat, journalist at Le Monde, “Oil: Power Has Changed Sides,” TruthOut.org 5/19/2008, lexis, accessed 6/01/2008. The strategy of the Vienna cartel - which has given up setting a price range since 2003 - seems simple: supply the market to avoid any break, reduce the "security cushion" to a minimum (2 million barrels a day) and thus maintain the highest prices possible without compromising economic growth. With three-quarters of global reserves, the thirteen OPEC member states have the means to enforce their policy. Consumer countries' dependence is linked to the fragility of the multinational companies. Oil states and their national public companies share 85 percent of the world's reserves. The majors no longer hold more than 15 percent and are having trouble reconstituting that percentage to the extent they draw those reserves down. What weight does "giant" ExxonMobil (NYSE:XOM) - the biggest listed company in the world - carry compared to Gazprom or Saudi Aramco? The great Western companies' access to oil fields - closed in Saudi Arabia, Kuwait and Mexico, ever more difficult in Russia, Venezuela and Algeria - would involve "returning to the period before the 1970s' nationalizations," believes Nicolas Sarkis, director of the "Arab Oil and Gas Review." OIL CARTELS WILL KEEP PRICES HIGH. Jean-Michel Bezat, journalist at Le Monde, “Oil: Power Has Changed Sides,” TruthOut.org 5/19/2008, lexis, accessed 6/01/2008. The development of the price per barrel ($128), is being determined behind the scenes in the Kremlin and in the meanders of the Iranian government, in Nigerian mangroves and on the banks of the Venezuelan Orinoco, in OPEC's Viennese corridors and in the halls of the New York Mercantile Exchange. And, above all, in Saudi palaces. The world is experiencing a third oil shock - slower than those of 1973 and 1980. The barrel, the price of which has increased six times in as many years, is more expensive in constant dollars than it was in the beginning of 1981. Its price may ebb by some $10 or $20 in coming months, but nothing is less certain. Analysts as respected as those of investment bank Goldman Sachs (NYSE:GS) see the price going to an average of $141 in the second half of 2008 and to $148 in 2009. OPEC no longer rules out $200. The Wahabite kingdom, the only country able to put a million additional barrels on the market, balks at that idea. It even stiffened its tone recently, when it announced that between 2009 and 2020 it would limit daily production to 12.5 million barrels a day to preserve its reserves and the interests of future generations along with them. "Every time there are new discoveries, leave them in the ground, for our children will need them," the king has resolved. Nothing induces the Saudis to open the spigots. They consider the market to be well-supplied and stocks of crude and gas to be at good levels.

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Bubble Economy Extensions: High Oil Prices Destroy the Economy
OIL PRICES ABOVE $120/BARREL WOULD DEVASTATE THE GLOBAL ECONOMY. Dr. Robert F. Wescott, Former Chief Economist at the U.S. President’s Council of Economic Advisers, “What Would $120 Oil Mean for the Global Economy?” April 2006, available online at http://www.secureenergy.org/reports/westcott_report.pdf, accessed 5/20/08. From this starting point, this short analytical note is designed to give an overview of the broad economic effects of a scenario in which oil prices surge to $120 a barrel due to coordinated terrorist attacks on global oil transportation infrastructure. It is not intended to be an exhaustive analysis. This scenario was the basis for a recent simulation exercise conducted by Securing America’s Future Energy (safe) at the World Economic Forum Annual Meeting 2006 in Davos, Switzerland. Dr. Neil McMahon, a prominent oil analyst at Sanford C. Bernstein llc, provided independent in-depth analysis on the price of crude oil based upon this scenario. In his analysis, the price of oil was somewhat volatile and climbed above $120 a barrel at certain points, but for simplicity in this note, it is assumed that the oil price remains constant at $120 for one year. The main conclusion of this note is that $120 oil would have profound negative effects on the world economy and global financial markets. PROLONGED HIGH OIL PRICES WILL CAUSE A SEVERE GLOBAL RECESSION Dr. Robert F. Wescott, Former Chief Economist at the U.S. President’s Council of Economic Advisers, “What Would $120 Oil Mean for the Global Economy?” April 2006, available online at http://www.secureenergy.org/reports/westcott_report.pdf, accessed 5/20/08. If oil increased to $120 a barrel and stayed there for a year because of coordinated terrorist attacks on oil facilities, the world’s oil bill would be about 8% of world gdp (even assuming some reduction in the quantity of oil demanded)—higher than at any time in modern history. Such oil prices would almost certainly precipitate a global recession. In addition to negative demand effects, there would be large negative supply side effects, policy effects, and confidence effects. Meanwhile, financial markets would likely judge these attacks on global energy supplies more seriously than Iraq’s 1990 invasion of Kuwait or the 9/11 attacks, because of their continuing disruptive effects. Stock market valuations would likely fall more than they did after the Kuwait invasion or after 9/11. Given the negative confidence effects and negative supply effects, the global recession would likely be severe. PROLONGED HIGH OIL PRICES WILL CAUSE A RETRET OF CONSUMER SPENDINGCAUSING A GLOBAL RECESSION. Dr. Robert F. Wescott, Former Chief Economist at the U.S. President’s Council of Economic Advisers, “What Would $120 Oil Mean for the Global Economy?” April 2006, available online at http://www.secureenergy.org/reports/westcott_report.pdf, accessed 5/20/08. Given that the average household saving rate in the U.S. is negative, even middle income families have remarkably little capacity to “dig into savings” to sustain their consumer spending. With oil jumping to $120 a barrel, household energy bills will roughly double to about $6,000 a year, or about 15% of total annual income for the median family. Most families will have little choice but to sharply curtail other spending. This same pattern will be mimicked around the world. Although absolute energy use is lower in other advanced countries than it is in the U.S., income levels are also lower, so the fraction of median family budgets devoted to energy in most countries will roughly double to 10-15% as well. Recent analysis by the Research Department at the International Monetary Fund finds that a permanent $5 a barrel increase in oil prices would Page 68 of 139

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decrease global gdp by up to 0.3 of a percentage point.3 This means that a $60 increase in oil prices, from $60 to $120, would cut the level of world gdp by up to 3.6 percentage points. Similarly, the U.S. Federal Reserve estimates that a $20 a barrel increase in oil prices reduces U.S. gdp by about 0.75 of a percentage point, suggesting that a $60 increase would lower gdp by 2.3 percentage points.4 World gdp growth in the past 30 years has averaged 3.5% and when growth slows to just 1% to 2%, a global recession is considered to have occurred. Therefore, a reduction in world gdp of 2.3% to 3.6% due to $120 oil will likely represent the onset of a global recession.

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Bubble Economy Extensions: Answer to Infinite Oil
OIL PRODUCTION WILL PEAK AND THEN DECLINE- ALL OF THE OBJECTIVE RESEARCH POINTS THE SAME DIRECTION. Timothy Miller, PhD Candidate in History at the University of Kansas, “The coming utopia/dystopia and communal possibilities”, Spaces of Utopia: An Electronic Journal, no. 1, Spring 2006, available online at ler.letras.up.pt/uploads/ficheiros/74_8.pdf, accessed 5/20/08. It seems obvious that a finite resource will eventually be used up, but even among educated people that is not necessarily accepted. For the average citizen the most noticeable oil shock comes with increased gasoline and diesel prices, and many seem to think that we are victims of a vast conspiracy by the multinational oil companies. Although there is probably truth to that contention, that is the smaller, not the larger, problem. Inescapably, we are burning oil at a prodigious rate, and supplies are on the brink of major decline. The only scientists and other specialists who argue that oil supplies are abundant are those who are economically tied to the energy industry, which even in 2 these perilous days has a vested interest in getting us to use ever more fossil fuels. The independent observers who have examined the world’s supply of oil vary in the details of their analysis, but not in their overall conclusion, namely that the production of oil will start declining in the very near future, and will continue to decline thereafter. The evidence for that scenario is provided not only by environmentalists and those who oppose the power of the multinational companies on political grounds, but also by the oil companies themselves. Richard Heinberg, of the New College of California, USA, provides strong evidence that the decline of oil will come in the very near future. He concludes that the peak of production will come between 2006 and 2015, and the latter end of that range will be the case only if the world economy goes into recession and demand for oil drops (Heinberg 2003: 118-119). The analysis is supported by the data gathered by Richard Duncan, who has looked at peaks in oil production by country and continent. He finds that production peaked in North America in 1983, in the former Soviet Union in 1987, and in Asia and the Pacific in 2004. Looking at current trends, he projects a peak of production in Europe in 2006, in South and Central America in 2006, in Africa in 2006, and in the Middle East in 2009. Putting all the world numbers together, he projects a world production peak in 2006 (quoted by Heinberg 2003: 103104). Paul Johnson adds an even more sobering note in his book The End of Oil. He notes that heroic oil-recovery measures have already been used to push the peak of production farther into the future, and that as a result when the peak does come, the decline will not be as gradual as it would have been otherwise. In other words, we are facing not a gentle downhill slope but a steep cliff (Johnson 2004: 52). REGIONAL ISOLATION OF PETROLEUM RESOURCES CREATES ENERGY DEPENDENCE- PAVING THE WAY FOR ENERGY WARS. Rosalie Westenskow, journalist, “Oil prices pummel U.S. security,” United Press International, 5/22/2008, lexis, accessed 6/01/2008. Unless the United States' energy structure changes radically and rapidly, soaring oil prices will leave the country at the mercy of hostile states and terrorists, witnesses testified Thursday in Congress. The United States currently consumes close to 21 million barrels of oil per day and imports almost 14 million barrels a day, or 60 percent. Countries in the Persian Gulf supply 16 percent of those imports, according to the Energy Information Agency, with another 10 percent coming from Venezuela. Relying on these countries for the nation's lifeblood puts the United States at serious risk because it gives power to those who oppose U.S. policy, said Rep. Howard Berman, D-Calif., chairman of the House Committee on Foreign Affairs. "Many sources of fossil fuels on the world market are in parts of the world that are either unstable or politically unfriendly to the United States," Berman said Thursday at a hearing in the Foreign Affairs Committee. "This provides leverage for those who control these energy supplies, enabling them Page 70 of 139

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to challenge U.S. foreign policy objectives." Currently unfolding events on the world stage attest to the willingness of many countries to use their energy resources to gain political power, said Rep. Ileana Ros-Lehtinen, R-Fla., ranking member of the committee. "Russia has demonstrated its willingness to use energy to put political pressure on other countries, such as Ukraine," Ros-Lehtinen said. As demand for oil and natural gas rises worldwide, emerging economies, such as China and India, may form unsavory partnerships to get the energy they need, putting the United States at further risk, said Paul Saunders, executive director of the Nixon Center, a non-partisan policy institute. "India's growing energy demand has led New Delhi to cultivate ties with Iran as the world's second-largest holder of natural gas reserves after Russia," Saunders said Thursday. "Japan, a key U.S. ally in Asia, has thus far resisted similar pressures but is clearly interested in a deeper energy relationship with Iran if it becomes possible." ANALYSIS OF SAUDI PRODUCTION PROVES OIL SUPPLY IS GETTING TIGHT. Elizabeth Souder, journalist, “T. Boone Pickens' prediction: Oil production is reaching its peak,” The Dallas Morning News, 5/25/2008, lexis, accessed 6/01/2008. When T. Boone Pickens talks, oil traders listen. The legendary oilman, who runs a multibilliondollar commodities hedge fund in Dallas, appears frequently on CNBC to predict oil prices. He's often correct. So nearly every time he makes a new prediction, the market moves that very day in the direction he forecasts. "I think you're going to see $150 before the end of the year," Mr. Pickens told CNBC viewers Tuesday. Sure enough, oil futures ended the day 1.6 percent higher at $129.07 a barrel, another record. Mr. Pickens is one of several Texans who are pushing the Peak Oil theory of oil scarcity into the mainstream. He believes humans will soon use up half the oil they can extract, and oil production rates will drop, never to recover. The controversial theory gives oil investors reason to bid prices to record levels and has prompted some local officials to create contingency plans. Oil company executives try to assure investors and consumers that there will be plenty of oil for many decades to come, so there's no reason for oil prices to have doubled during the last year. Oil traders don't seem to be listening. M. King Hubbert, a Shell geophysicist from San Saba, Texas, came up with the Peak Oil theory in the 1950s. He studied the way an oil field's production declines as the field matures, until it's barely a trickle. He correctly predicted that U.S. production rates would peak around 1970. But current Peak Oil theorists disagree on when global production will peak. Some say it's already happened; others give it another decade. Part of the problem is that it's impossible to find accurate information on exactly how much oil lies underground. Some countries, such as Saudi Arabia, keep their reserve data a state secret. Matthew Simmons tried to break through the Saudi silence. Mr. Simmons, who owns an investment bank and an oil field services company in Houston, pored over hundreds of technical reports about Saudi fields. He concluded that Saudi production will soon wane, and the country will no longer be able to turn on the taps anytime humans face an oil shortage. "Unless I'm totally screwed up in my analysis, we're sitting on the world's biggest delusion ever," Mr. Simmons said.

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Bubble Economy Extensions: BioFuels Solve Price Shocks
EXPERTS AGREE THAT A FLEX FUEL MANDATE WOULD INSULATE THE US FROM ENERGY DISRUPTIONS AND TERRORIST ATTACKS. Mark Clayton, Journalist, “Oil Shock 2?” Christian Science Monitor, May 12, 2008, lexis, accessed 5/25/08. One measure Lovins and Ann Korin, chairman of Set America Free, an energy-security coalition, agree on is for the government to mandate that all vehicles be "flex fuel" burning so Americans can choose alternatives to gasoline. The move, she says, would reduce the nation's exposure to a terrorist attack. "There's not much we can do today if an attack occurs other than band-aid responses like tapping into the strategic petroleum reserve," Ms. Korin says. "If every garage had a plug-in [hybrid gas-electric] or flex-fuel vehicle, you could still get around. Oil goes up, but we're not held hostage." The US already has "solutions that can take away the strategic power of oil," adds Robert "Bud" McFarlane, national security adviser to President Reagan in the mid-1980s, referring to ethanol, methanol, biodiesel, and electricity for vehicle propulsion. Dennis McGinn agrees. A retired vice admiral of the Navy and a national-security expert, he is acutely aware of the fragile oil-supply line and many energy choke points around the globe. Still, he, too, sees a silver lining in this crisis if Americans can wake up and respond to it. "Our nation has met a whole lot of crises in our history," he says. "This energy and climatechange challenge is perfect for the American public, industry, and government to really do something about. We just need to be honest with ourselves that business as usual can't continue."

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PUBLIC INVESTMENT SPURS PRIVATE INVESTMENT AND GROWTH. Sherle R. Schwenninger, senior fellow at the World Policy Institute, “A Goldilocks World Economy?” World Policy Journal Winter 2007, available online at http://www.newamerica.net/publications/articles/2007/a_goldilocks_world_economy_5374, accessed 5/20/08. A public-investment-led transition strategy would have advantages over other policy alternatives. First, in terms of demand, most of the public investment would go to stimulate domestic investment and jobs, and thus would be more efficient than either supply-side or demand-side tax cuts in countering an economic slowdown. Second, in terms of investment, public investment— particularly public infrastructure investment— is a more direct and more reliable way to increase both public and private investment than are supply-side tax cuts or deficit reduction, the policy choices respectively of the Bush administration and former Clinton administration officials. More public investment is needed to correct the current shortcomings in both the nation’s physical infrastructure and knowledge capital. Any increase in public investment related to these unmet needs would have positive returns for the economy and would, in any case, be better than no increase in public investment at all. Public investment would also be a more efficient way to stimulate private investment. Supply-side tax cuts are particularly inefficient in that the money saved from reduced taxes is just as likely to be consumed or invested abroad. As for deficit reduction, its principal purpose is to lower interest rates, but lower interest rates would not do much to stimulate investment when the cost of capital is already low by historical standards. By contrast, public investment can enhance private investment in two ways. It can increase the efficiency of existing investment and resources. And it can “crowd in” private investment by making new private investment feasible in places where earlier it was not. The main argument against public investment spending as a counter-cyclical tool is that it takes too long to implement—by the time public projects are approved and implemented the economy is on the way to recovery. But this is not to suggest using public investment as a classical countercyclical measure. The economy is not facing a business inventory recession; it is still struggling with the legacy of the bursting of the tech bubble and the follow-on housing bubble. In this case, a healthy dose of public investment spending is a necessary preventive measure against a prolonged slowdown caused by an investment stall after the burst of an asset bubble. PUBLIC INVESTMENT AND THIRD WORLD CONSUMPTION IS THE KEY TO ESCAPING THE BUBBLE CYCLE- IT’S THE ONLY PATH TO STABLE ECONOMIC GROWTH. Sherle R. Schwenninger, senior fellow at the World Policy Institute, “A Goldilocks World Economy?” World Policy Journal Winter 2007, available online at http://www.newamerica.net/publications/articles/2007/a_goldilocks_world_economy_5374, accessed 5/20/08. A program of expanded public investment spending would be one pillar of a transition strategy to a sustainable fastergrowing world economy. The other would be measures to encourage greater middle-class consumption abroad. A better balance between consumption and production at home means more consumption relative to production abroad, especially in the high savings, newly industrialized, Asian economies. As noted earlier, these economies have experienced rapid productivity gains over the past decade. The goal of American policy ought to be to help these economies translate those productivity gains into rising wages and living standards—so that working men and women there can consume more of what they produce and so that the world economy can grow in a more balanced way. To achieve this goal, American policymakers need to shift their international economic thinking from the neoliberal, exportoriented nostrums of the 1980s and 1990s to the Keynesian ideas of the 1940s and 1950s, when the United States dramatically expanded its middle class and raised living standards. Rather than encourage emerging economies to develop primarily through the export of manufactured goods and their component parts, U.S. international economic policy should champion middle-class development aimed at increasing domestic consumption. This means helping emerging economies to expand home ownership, invest in public infrastructure, improve public education, build a social safety net, and create more small and medium-size businesses—much as the United States did in the last century. The end goal of this policy should be to build a larger, global middle class in emerging economies, which could relieve U.S. consumers of some of the burden of serving as the main consumer locomotive of the world economy. The conditions for rebalancing the world economy in this way are present in many newly industrialized economies, where there is enormous pent-up consumer demand from rising incomes and years of suppressed consumption. OUR SCENARIO FOR THE ECONOMY IS MORE PROBABLE BECAUSE THIS IS AN “ABUNDANCE ECONOMY” WHICH MAKES OTHER ECONOMIC MODELS FAIL. Sherle R. Schwenninger, senior fellow at the World Policy Institute, “A Goldilocks World Economy?” World Policy Journal Winter 2007, available online at http://www.newamerica.net/publications/articles/2007/a_goldilocks_world_economy_5374, accessed 5/20/08. Adjusting Our Thinking. The notion of an economy of abundance and plenty is counterintuitive to the experiences and training of many of today’s leading economists and policymakers who are still rooted in the supply-constrained 1970s and ‘80s. Yet today’s economic conditions of rapid productivity growth and excess labor and capital have less in common with those decades than with the bubble years of the 1920s. Thus, both in our domestic and international policies, we may be at risk of repeating, albeit on a smaller scale, the mistake that an earlier generation in the 1920s made in not understanding the challenges associated with rapid productivity growth and an abundant supply of labor and capital. Those challenges require Page 73 of 139

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us to think more creatively about spreading economic prosperity not only in the United States but also in emerging economies.

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NOW IT A MAKE OR BREAK MOMENT FOR THE GLOBAL ECONOMY.

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Stephen McMahon, journalist, “Economy `Make or break' months looming,” The Advertiser (Australia), June 13, 2008, lexis, accessed 6/18/2008. The next few months will be the ``make or break time'' for the global economy, as it stares down the twin threats of higher inflation and faltering growth, a top U.S. economist has warned. Professor Marvin Goodfriend, a 20-year veteran of the U.S. Federal Reserve under former chairman Alan Greenspan's stewardship, said the volatility in oil prices and in global stock markets would continue until the uncertainty surrounding the U.S. economy begins to clear. ``We are going to have a very nervous summer (in the northern hemisphere) as we aren't going to get a clear picture until later in the year about whether the U.S. economy can avoid recession,'' he said. ``The U.S. economy has been whipsawed this year by two opposing forces.'' Despite the gloom, Professor Goodfriend is optimistic the U.S. economy can maintain its low-growth trajectory throughout this year - largely thanks to the $US170 billion of rebate cheques given to taxpayers by the government - and avoid an out-and-out recession. As prices continue to go higher, he forecast Fed chairman Ben Bernanke will be forced to raise rates once this year. Professor Goodfriend, a visitor at the United States Studies Centre at the University of Sydney, said if the Fed doesn't move quickly enough against rising inflation, the dreaded stagflation - slow or no growth combined with rising inflation - could hit for the first time since the 1970s. Today, he is meeting with senior Reserve Bank of Australia executives to discuss the global scourge of inflation. ``Australia is the flip-side to all the problems in the global economy, but inflation is its Achilles heel,'' he said. BIOFUELS DRIVE UP FOOD PRICES- RISKING A GLOBAL RECESSION. Larry Elliott, journalist, “Soft landings and hard realities: The IMF thinks we can ride out this crisis, but there could be far worse news to come,” Guardian Weekly, April 18, 2008, lexis, accessed 6/18/2008. The first is that it is far too early to say that the worst is over. Henry Paulson, who does Summers's old job at the US treasury, said he expected to see some impact from lower interest rates and tax cuts by the third quarter of this year. But that depends on the US housing market stabilising, because until it does there is a real risk of a vicious circle of foreclosures, collapsing consumer confidence, rising unemployment, bigger losses for US banks, tighter credit conditions and a falling stock market. The IMF says that risks are still heavily weighted to the downside. It produced an alternative scenario in which there would be a further tightening of credit conditions, a far bigger drop in equity and property prices than it currently expects, a gloomier assessment of the prospects for long-term productivity growth in the US, and an unwillingness on the part of foreign investors to continue buying US assets. It already believes there is a 25% risk of a global recession; under this alternative scenario it says there would be a deeper and longer period of falling growth in the US, accompanied by an extended period of weakness in the eurozone and spillover effects on the rest of the global economy through weaker trade flows and tougher credit conditions. This scenario looks just as realistic as the fund's baseline soft-landing forecast. For one thing, there is a clear disjunction between the idea that this is the biggest financial shock since the Depression and the idea that there will be only a short-lived and relatively mild impact on growth. In addition, the soft-landing thesis conveniently ignores the other headwinds facing the global economy. These include rocketing commodity prices that are contributing to a sharp rise in imported inflation, severe downward pressure on the dollar that threatens to become a disorderly plunge, the still-sizeable global imbalances that have resulted in massive trade surpluses in Asia, and massive trade deficits in the US, which have been only slightly reduced by a cheaper greenback and weaker growth. That list was supplemented last week by global hunger caused by rising food prices. The world has suddenly woken up to what should have been blindingly obvious: trying to solve the problem of climate change by using crops for biofuel was a short-term fix with potentially lethal result. If you encourage farmers to use land that would have produced food for fuel, the price of food will go up. Gordon Brown considers this to be a serious crisis and is right to call for a global response. Yet apart from the humanitarian need to help those going hungry, rising food prices make it harder to avoid recession in the West, since they stifle consumer confidence and make policy-makers warier about cutting interest rates. BIO-FUEL INCENTIVES DRIVE UP GLOBAL FOOD PRICES, AND DISTORT ENERGY MARKETS. Arvind Subramanian, senior fellow Peterson Institute for International Economics, “US Leadership in the Global Food Crisis,” Statement before the US House of Representatives, Committee on Financial Services, hearing on Contributing Factors and International Responses to the Global Food Crisis, May 14, 2008, available online at: http://www.petersoninstitute.org/publications/papers/paper.cfm?ResearchID=931, accessed 6/12/2008. I would like to make a few general comments about trade and economic incentives. First, U.S. policies related to ethanol. There is a big debate about the contribution that they make toward raising food prices. The range of estimates will vary and we will never know the precise magnitudes. But that should not come in the way of action. We can be confident that eliminating or reducing the distortions generated by the ethanol program will help dampen food prices. Moreover, these Page 75 of 139

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policies are one of the few factors responsible for the crisis that we can control more than we can control climactic factors that affect supply or the increased demand due to prosperity in the developing world. We need to act on the few things that U.S. policy-makers can control and eliminating or reducing the ethanol program is one policy lever we have. Moreover, the ethanol issue should be seen not from the narrow perspective of its contribution to food but from two broader perspectives. With oil prices at US$126 a barrel, the market by itself is providing a lot of help and incentives for ethanol production. There seems little need for additional help and incentives at taxpayers' expense. Furthermore, while ethanol interventions originally had good motivations (reducing dependence on fossil fuels and imported fuels), they have led to some unintended consequences that are now becoming evident. The question now from an environmental perspective is this: insofar as the U.S. government needs to provide incentives for the search for alternatives to fossil fuels, why favor one particular alternative, namely ethanol (which, according to experts is not even the most environmentally efficient one)? Why not level the playing field so that all new avenues, all potentially new ideas have a good shot at being explored and discovered? In other words, eliminating all the assistance to ethanol-based biofuels and providing broad-based incentives for alternative fuel research and production might be better food policy and better environmental policy. The aim of policy should not be to "pick" winners but to find winners. BIO-FUEL INCENTIVES INCREASE GLOBAL FOOD PRICES Arvind Subramanian, senior fellow Peterson Institute for International Economics, “US Leadership in the Global Food Crisis,” Statement before the US House of Representatives, Committee on Financial Services, hearing on Contributing Factors and International Responses to the Global Food Crisis, May 14, 2008, available online at: http://www.petersoninstitute.org/publications/papers/paper.cfm?ResearchID=931, accessed 6/12/2008. To boost agricultural supply in the medium run, we need to fix the incentives facing agriculture globally. That in turn means efficient and food-friendly trade policies around the world. But not only are we far away from that objective, we are moving in the wrong direction. In the U.S., the combination of the Renewable Fuels Standard (the ethanol mandates), the blenders' tax credit, and tariffs on imported Brazilian ethanol have diverted land, especially from wheat and soya bean production, and contributed to food price increases. Estimates vary on the magnitude of this contribution (one estimate by Professor Babcock of Iowa State University says that eliminating all three of these measures would reduce prices by 16 percent, while another by the International Food Policy Research Institute (IFPRI) suggests that a moratorium on biofuel production in developed countries through 2008 would ease corn prices by 20 percent and wheat prices by 10 percent), but as I will explain below, the question of exactly how much is less important than the fact that these three policies contribute to food price rises. BIOFUELS DRIVE UP COMMODITY PRICES. Jim Kleinschmit, Rural communities program director for the Institute for Agriculture and Trade Policy, “Biofuels Moving Mainstream– Environmental and Social Implications,” IATP COMMENTARY, September 13, 2007, available online at: www.iatp.org/iatp/commentaries.cfm?refid=100323, accessed 6/12/2008. Take, for example, the increasing concern about biofuels’ impact on commodity prices and availability – more commonly referred to as the “food vs. fuel” issue. There is no doubt that the growing demand of the biofuels sector for feedstocks – primarily corn and soybeans in the U.S. – is having an impact on the prices of these and other basic commodity crops. Already, it is expected that ethanol will consume 20 percent of U.S. corn in 2007, and more than 30 percent of the corn crop by 2009. And if all of the proposed plants as of April 2007 were to be built (which is not likely to happen), this share could grow to as much as 54 percent. Biodiesel’s market share is much smaller, but is having a similar effect on the soy market, with the USDA projecting that the sector will consume 20 percent of soy oil production in 2007/08. One clear result of this increased usage has been a rise in corn prices, but also in other commodities such as soybeans, wheat, oats, and barley, as farmers have shifted acreage to corn and other users have turned to them as “replacement” feedstocks. The result is that biofuels are blamed for everything from the higher prices of tortillas in Mexico to higher meat prices in America, all while raising the specter of worldwide threats of increased food insecurity.

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Bubble Internal: Inflation
A WEAKENED ECONOMY MAKES IT IMPOSSIBLE FOR THE FED TO FIGHT INFLATION- RISKING A GLOBAL ECONOMIC COLLAPSE.

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The Daily Yomiuri(Tokyo), June 17, 2008, lexis, accessed 6/18/2008. There is little room for relaxing monetary policy as a means of bolstering the economy, given the low-interest-rate policy already in place. In addition, the nation has a huge fiscal deficit to deal with, making it difficult to increase public spending on economic pump-priming measures. If the price increase spreads further, it will become even more difficult for the government to deal with the situation. Discord among Japan, Europe and the United States over policy coordination also could become a destabilizing factor for the global economy. The European Central Bank is positive about a rise in interest rates to avoid inflation. But the United States is finding it difficult to raise interest rates due to its fear of a financial system crash caused by the subprime mortgage crisis. If they fail to take concerted action, there is no denying that the disharmony could invite worldwide market trouble. Given the unpredictable economic situation, it is important to react flexibly and come out with measures to mitigate the impact of an economic downturn.

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Bubble Internal: Inflation

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THE FED HAS A BALANCED APPROACH RIGHT NOW- NEW INFLATION MIGHT FORCE ITS HAND AND CAUSE ANOTHER GREAT DEPRESSION. Mark Thompson, journalist, “Talk of recession is premature for U.S.,” The Augusta Chronicle (Georgia) March 24, 2008, lexis, accessed 6/18/2008. In fact, much of the recent banking news has been focused on the subprime market. Keep in mind that this market accounts for less than 10 percent of all homeowners, according to the Mortgage Banker's Association. Financial institutions are paying for their lax lending requirements; unfortunately, consumers and small businesses might also pay a price as it has spilled over into other areas of the economy. With the onset of a possible, but mild recession, rising prices have brought the discussion of stagflation to the forefront. Stagflation is when the aggregate price level is rising and the economy is slowing down. This period of time is difficult for policy makers. To combat rising prices or inflationary pressures, the Federal Reserve can pursue contractionary monetary policy via raising the federal funds rate. Doing so would further contract the economy and restrict financial capital. This mistake has been done before (including the Great Depression). Today, markets are adjusting. The Federal Reserve is pursuing a very aggressive, and in my opinion, appropriate stance as inflation expectations are holding steady. As each month passes, the Fed will re-evaluate the situation. THE ECONOMY WILL BE FINE NOW- BUT FASTER INFLATION COULD DESTROY THE RECOVERY. Business Week Online, “Stocks Sink as Oil Soars,” May 8, 2008, lexis, accessed 6/12/2008. The Kansas City Fed's Hoenig said in a speech late Tuesday that the Fed must be ready to raise benchmark interest rates in a timely manner given the "troublesome" inflation outlook. "If inflation gets too high, the economy will suffer dramatically," a Reuters dispatch from Denver quoted Hoenig as saying. Hoenig strongly hinted that he would not support more cuts to the Fed's benchmark interest rates at a time higher inflation could be getting entrenched, given prospects for growth to pick up in the second half of 2008. "The current accommodative stance should be sufficient to cushion the economy from a deeper slowdown and the risks that financial disruptions could spill over to the broader economy," Hoenig said. According to a Wall Street Journal report, Paulson said U.S. financial markets are emerging from the credit crunch that many economists believe has pushed the country to the brink of recession. "I do believe that the worst is likely to be behind us," Paulson told the newspaper in an interview. The Journal said Paulson's comments appear to be the Bush administration's most optimistic assessment yet about the financial turmoil that began last year with defaults on subprime home loans and spread through financial institutions that owned tens of billions of dollars in mortgage-backed securities. In the interview, however, the Treasury Secretary predicted there would be further "bumps along the road," and that it would take "some months longer" for the market distress to fully dissipate. NOW THERE’S A UNIQUE RISK OF GLOBAL INFLATION Joanna Slater, journalist, “Inflation's bite worsens around world.” The Associated Press June 11, 2008, lexis, access 6/10/2008. Inflation worries are heating up around the world and jolting financial markets in the process. On Tuesday, China's stock market was the latest to feel the blow, with the benchmark Shanghai Composite Index tumbling by 7.7 percent, to its lowest close this year. The drop came after the government announced steps to remove cash from the financial system in an attempt to tamp down inflation. Also Tuesday, officials in Vietnam effectively devalued their currency in a step aimed at easing market pressures related to soaring inflation rates. And in the U.S., investors sold off U.S. Treasury securities, one day after Federal Reserve Chairman Ben Bernanke warned that the run-up in oil prices is adding to upside risks for inflation. The price of the two year Treasury note, most sensitive to the Fed's moves, has fallen sharply (and its yield has risen) as investors grow convinced that the central bank may have to raise rates this autumn to contain inflation. On Tuesday, the two-year note's yield was 2.9 percent, up from 2.4 percent on Friday, marking a major jump in that rate. INTEREST RATES CAN’T BE USED AS A CHECK- MAKING ANY INFLATION DANGEROUS. Joanna Slater, journalist, “Inflation's bite worsens around world.” The Associated Press June 11, 2008, lexis, access 6/10/2008. The typical way to fight inflation is to raise interest rates. But that tends to hurt economic growth and weighs on stock prices. It also complicates efforts by some developing markets to hold their currencies steady, an important mission because their economies tend to be export-driven. The global economy is showing resilience, to be sure. On Tuesday, the World Bank predicted modest declines in growth rates and investment in developing countries this year, according to its annual Page 78 of 139

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Global Development Finance report. Skyrocketing energy and food prices are particularly acute for countries with large numbers of people living in poverty. But there are other inflationary forces at work which preceded the recent surge in commodity prices. Many developing economies have experienced a flood of capital inflows, leading to an overheated investment climate and piles of reserves. They've also seen rapid growth in domestic demand and lending, plus tightening labor markets. The inflation spike is sparking concern among investors. After years of benign conditions, emerging markets "actually are getting riskier," says Simon Hallett, who manages about $7 billion in international stocks at Harding, Loevner Management. Central banks across the developing world face a critical test. Many haven't taken aggressive steps to tighten monetary policy, say economists and investors, and have resorted to temporary measures like price controls on consumer goods such as flour and gasoline to tame inflation. Governments seeking to dial back costly subsidies risk angering their populaces. In Egypt, protests broke out in the town of Burullus over the weekend after officials stopped the sale of subsidized flour to citizens. "The increases in inflation are outpacing the reactions of central banks," says Curtis Mewbourne, co-head of emerging markets at Pacific Investment Management Co., which manages $70 billion in these countries. He says his firm has decreased its exposure to interest-bearing instruments like bonds issued in these markets. INFLATION IN DEVELOPING COUNTRIES TANKS THEIR FOREIGN INVESTMENT Joanna Slater, journalist, “Inflation's bite worsens around world.” The Associated Press June 11, 2008, lexis, access 6/10/2008. Investors are punishing stocks, bonds, and currencies in other countries that are already experiencing runaway inflation or where rising prices combine with other economic vulnerabilities. Vietnam was until recently a darling of investors seeking the next generation of hot markets. But a report that consumer price inflation was 25 percent higher in May from a year earlier knocked down the value of the local currency in futures markets and set off worries about a financial crisis. China's inflation rate hasn't yet reached those levels but is a major source of concern for investors. "The time for hard choices is here," wrote Stephen Green, head of China research at Standard Chartered Bank in Shanghai. In several large emerging markets, double-digit inflation has already arrived or is expected shortly, including Russia, Turkey, South Africa, India, Indonesia, and the Philippines. In the last week alone, Russia, the Philippines, and Indonesia all raised their key interest rates. But some investors worry it's not enough. Even with the increases in interest rates, many governments especially those in Asia are still running policies that stimulate their economies. That's because their key policy rates are lower than inflation, which gives investors an incentive to borrow rather than to save. "These guys are falling behind the curve," says Edwin Gutierrez, an emerging-market bond portfolio manager at Aberdeen Asset Management in London, in the hopes that the surge in food and energy prices will prove short-lived. "It's a very dangerous game," says Mr. Gutierrez. Internal: Inflation: US Inflation Key to Global Economy US INFLATION IS KEY TO A GLOBAL ECONOMIC DECLINE. CURRENTLY- WE ARE SAFE. Trevor Greetham, director of asset allocation for Fidelity International, “America will lead the way,” Financial Advise January 25, 2007, lexis, accessed, 6/18/2008. US consumer strength has been a major driving force for global economic growth and has acted as a power supply for the rapid economic development of China and other emerging markets in the past few years. With US house prices falling, fears of a weaker US consumer demand and a fall in business confidence could become more prevalent. For a soft landing in the US and world economy, there needs to be significant rate cuts from the Federal Reserve and lower mortgage rates. This, in turn, hinges on the path of inflation. US equities have underperformed more volatile growth-sensitive markets for the last few years. It is ironic the apparent global slowdown is US-led, but it will probably make Wall Street increasingly appealing to global investors. At present, European markets look most attractive. Growth remains strong, the European Central Bank is relatively early in its rate rise cycle and the strength of domestic demand should help offset possible weakness in exports. The euro's strength also enhances returns. Susceptibility Japan is probably the most susceptible major economy to a slowdown in US growth. The Bank of Japan officially ended its zero-interest rate policy with a 0.25 per cent interest rate rise in July 2006. Any further tightening of monetary policy ought to be a delicate process following such an extended period of deflation. However, official statements seem to suggest a desire to normalise rates at about 3 per cent. Smaller Asian markets have performed well. After strong performance in 2005, the Korean market slowed in 2006 as a result of weakened business confidence amid political uncertainties and lower domestic consumption. However, the economic outlook remains fair, given the strong export growth and stable demand. Domestic demand in Taiwan has been impacted negatively by weak fixed investment and private consumption, although export growth should continue to support the economy. The main emerging markets of China, Brazil and India, which together represent about a quarter of global growth in recent years, should make an increasingly important contribution in the long term. Weakness in developed economies, however, is likely to have a negative impact on investors.

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US INFLATION RISKS AN INTEREST RATE HIKE WHICH WOULD KILL GROWTH AND SEND A GLOBAL SIGNAL. Neil Fullick, journalist, “Monetary policies on the mind of investors,” The International Herald Tribune, June 16, 2008, lexis, accessed 6/18/2008. Financial markets battered last week by increased anti-inflation talk from the world's two most powerful central banks can take stock this week of just how aggressive the monetary tightening might be. While future rate increases by the European Central and the U.S. Federal Reserve would embolden rate setters elsewhere to follow suit, lingering concerns about a slowdown in economic growth might well keep the policy makers cautious and markets on edge. The dollar is expected to feel the crosswinds of these competing viewpoints early in the week after the Group of 8 nations failed to endorse a stronger dollar in a meeting of their finance ministers in Osaka, Japan, during the past weekend. The dollar has been linked to rising prices because some, including the French economy minister, Christine Lagarde, argue speculators are putting their money into commodities like oil to hedge against long-term weakness in the currency. ''The result of the G-8 was a disappointment, with ministers saying they did not discuss currencies,'' said Minoru Shioiri, chief manager of foreign exchange trading at Mitsubishi UFJ Securities in Tokyo. ''The dollar is likely to start lower on Monday.'' But any dollar downside may well be limited because the Fed seems poised to raise interest rates, adding to the appeal of investing in U.S. assets, bankers said. ''The dollar's fall will be gradual because views for higher U.S. interest rates and rising Treasury yields, bigger factors behind the dollar's recent rise, are still intact,'' said Tohru Sasaki, chief foreign exchange strategist at JPMorgan Chase in Tokyo. The dollar chalked up its biggest gains in more than three years against the euro last week to factor in the sudden burst of anti-inflation talk from policy makers at the Fed and the European Central Bank. The Fed chairman, Ben Bernanke, Enhanced Coverage Linking Fed chairman, Ben Bernanke, said a weak dollar was contributing to import-price inflation in the United States. He highlighted the need to keep inflation expectations under control, raising expectations that the Fed would increase rates. The Fed has aggressively cut rates to 2 percent from 5.25 percent since the global credit crisis blew up last year, so Bernanke Enhanced Coverage Linking Bernanke's comments suddenly put a rate rise on the agenda. The president of the European bank, Jean-Claude Trichet, was more clear-cut. He said the bank could raise rates for the first time since 1999 as soon as July. He and other policy makers have talked about being on high alert over inflation. The reaction in financial markets was dramatic. Bonds were battered. Yields on two-year U.S. Treasury securities, the most sensitive to changing interest rate expectations, jumped their most last week in 26 years, rising 65 basis points to more than 3 percent. A basis point is one-hundredth of a percentage point. Stocks fell globally, as measured by the MSCI world equity index. The Nikkei average, the FTSEurofirst 300, the FTSE 100, the Nasdaq and Standard & Poor's 500-stock index all lost ground. The Dow Jones industrial average rose. UNCONTROLLED US INFLATION RISKS GLOBAL INFLATION CRISIS. Hardev Kaur, journalist, “Prudent spending critical for long-term survival,” New Straits Times (Malaysia), June 13, 2008, lexis, accessed 6/15/2008. In July 2006, the market was forecasting an increase to $80US a barrel. Today, the price has breached the $139US a barrel and still shows "no sign of weakening soon". Last Saturday, the FT headline was "Crude oil jumps $10US; cost of barrel now close to $138US". Today, the scenario is no different - record high oil prices and inflation fears are growing. The United States' Federal Reserve chairman Ben Bernanke sounded inflation concerns on Monday. The assessment of some central bank officials in the US is that higher interest rates may be needed to offset global inflation. Thus, governments around the world, oil producers included, are looking into ways to reduce the burden of the unprecedented high oil prices from adversely affecting government budgets and finances. Subsidies that have capped prices consumers pay hide the real price of the commodity. And the increased burden of higher world oil prices is borne by governments as the amount of subsidies continues to increase. The Malaysian government's oil subsidy bill was also on the increase. Last year, the government spent RM53 billion on fuel subsidies - RM33 billion on diesel and petrol and RM20 billion on natural gas. If the government continued giving out subsidies as in the past, it is estimated that this year the subsidies would amount to some RM56 billion. This would mean an increase in government budget deficit which had been reduced to three per cent of gross domestic product. According to Professor Danny Quah of the London School of Economics, the government budget deficit could rise to between eight per cent and 10 per cent if the government continues with the subsidies. This would result in other unacceptable and unwelcome consequences for the economy. The high level of subsidies is untenable. For the longer-term survival of the nation, the government must be prudent in its spending and financial management today. Even though Malaysia is an oil producer and exporter, the country still imports oil and can neither ignore nor be shielded from global developments and price volatility. No country, big or small, developed or developing, is immune to price increases. Even in the US, a major oil producer, the price at the pump has reached a national average of $4US a gallon, passing the once unthinkable milestone. And this at the peak summer travel season in the US. Even then, Jason Toews, co-founder of fuel research site GasBuddy.com, is reported as saying that "I don't think we've felt quite the full impact of $138US or $139US barrel oil". Page 80 of 139

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Impact: Soil Erosion

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US ethanol bias drives up corn prices- causing soil erosion in several ways.
Jeff Tollefson, Energy reporter for Nature Magazine- fellow in science journalism at MIT, “Not your father's biofuels,” Nature Feb. 20, 2008. It's all the more discouraging because American farmers had reduced soil erosion by about 40 percent between 1985 and 1995, largely due to government policies like the Conservation Reserve Program (CRP). But CRP programs are now taking a back seat to the desire to cash in on the biofuel bonanza. Erosion is ignored while the US government provides billions of dollars in subsidies for biofuels. "Biofuels and climate change are real threats to America's soil health," Cox says. Farmers are eagerly plowing up CRP lands, pastures, and highly erodible land to grow corn--12 million additional acres of corn in 2007 alone--so they can profit from the ethanol boom. Ethanol is mainly made from corn, and the federal government hopes the US will be producing 35 billion gallons of the stuff by 2017. Reaching that goal would turn much of the US into a giant cornfield and has already doubled the price of corn in the past two years. Corn is particularly hard on the soil, requiring plenty of fertilizer, water, and pesticides. Cox says ethanol has sparked a "gold-rush mentality" among farmers who are mortgaging the future health of their soils for shortterm profits. "There's no question that the ethanol boom is increasing erosion." Not surprisingly, land prices and rents in the corn belt have jumped upward, creating additional pressure to "mine the soil to pay the mortage." Farmland has been a popular investment for many years, and in some states, half of all farmland is rented. This reduces the incentives for soil conservation, since the farmer who works the field is not the permanent caretaker of the land.

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Cellulose: Investment Key
Investment is key to cellulosic breakthrough- but investors are nervous.

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Wallace E. Tyner, Purdue University, Paper presented at the National Agricultural Biotechnology Council Conference, “Biofuels, Energy Security, and Global Warming Policy Interaction,” NATURE, Vol 444 No 7, December 2006. One way round this is to invest across the board. This is the strategy pursued by Vinod Khosla, the Silicon Valley venture capitalist who is one of the founders of Cilion. Khosla is also involved in cellulosic technologies through two companies based in Cambridge, Massachusetts: Celunol, which has just started to operate its own pilot plant, and Mascoma, which concentrates on process engineering and which last month raised $30 million in second-round venture funding. Farther afield in the biofuels world, Khosla is also a major investor in Kergy, a company that turns biomass into fuel in a completely different ‘thermochemical’ way, using just heat and catalysts. For some observers, such as Dan Schrag, a geochemist at Harvard University, these approaches are more attractive than fermentation, not least because they need no witches’ brews made from fiddly feedstock-specific enzyme. “When the dust clears, cellulosic ethanol is unlikely to be where we end up,” he predicts (see page 677). To Drinkwater, investors such as Khosla, with their broad-based approach to the problem, are exactly what the industry needs to drive the market forwards and get it over the final bump it needs to clear before commercial success. Unfortunately, there are few such people. In their absence, many in the industry, not without self-interest, see the responsibility resting with governments to provide attractive tax incentives.

Government financing is key to widespread use of cellulosic ethanol
Julie
Sibbing,
National
Wildlife
Federation,
Soil
and
Water
Conservation,
May‐June
2007,
p.
48A

 But
cellulosic technologies have not yet been deployed at commercial scale in the
United
States.
Cellulosic
ethanol
 will
rely
on
the
development
of
enzymes
that
can
break
down
the
cellulose
in
plant
materials
to
starch,
which
can
be
 fermented
into
ethanol.
While
there
are
significant
investments,
both
public
and
private,
into
developing
this
 enzymatic
technology,
nobody
knows
when
these
enzymes
will
be
available.
It could take
as
little
as
2
years
or
as
 long
as
15 years
without government leadership
to move the technology more quickly to commercialization.
There
 are
other
promising
technologies
for
utilizing
biomass
as
well:
pyrolysis,
gasification,
and
various
thermochemical
 processes.
Yet
these are receiving very little public investment. We currently have the unprecedented chance to develop a new, sustainable energy future for our country. While
biofuels
are
only
part
of
this
future,
they
need immediate and significant policy attention and public investment to set them on the right path.
Since
corn
ethanol
and
 soybean
biodiesel
are
what
we
have
available
for
biofuels
today
and
can
bring
about
modest
net
greenhouse
gas
 reductions,
we
must
inject
some
common
sense
into
the
debate
and
commit
to
sustainable
corn
ethanol
expansion
 targets,
along
with
increased
spending
on
conservation
programs
and
reasonable
safeguards
to
protect
the
 conservation
gains
we
have
achieved
over
the
past
several
decades.

 


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Cellulose: Investment Key

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Advanced enzyme breakthrough is near- we need a broader research effort.
David Rotman, Editor of Technololgy Review, “The price of biofuels: making ethanol from corn is expensive. Better biofuels are years away from the gas tank. Farmers are reluctant to change their practices. But do we really have any alternative to biofuels?” Technology Review, Vol. 111 No. 1, January 1, 2008. "Cellulose has physical and chemical properties that make it difficult to access and difficult to break down," explains Caltech's Arnold, who has worked on and off on the biological approach to producing cellulosic ethanol since the 1970s. For one thing, cellulose fibers are held together by a substance called lignin, which is "a bit like asphalt," Arnold says. Once the lignin is removed, the cellulose can be broken down by enzymes, but they are expensive, and existing enzymes are not ideal for the task. Many researchers believe that the most promising way to make cellulosic biofuels economically competitive involves the creation--or the discovery--of "superbugs," microorganisms that can break down cellulose to sugars and then ferment those sugars into ethanol. The idea is to take what is now a multistep process requiring the addition of costly enzymes and turn it into a simple, one-step process, referred toin the industry as consolidated bioprocessing. According to Lee Lynd, a professor of engineering at Dartmouth College and cofounder of Mascoma, a company based in Cambridge, MA, that is commercializing a version of the technology, the consolidated approach could eventually produce ethanol at 70 cents a gallon. "It would be a transformational breakthrough," he says. "There's no doubt it would be attractive." But finding superbugs has proved difficult. For decades, scientists have known of bacteria that can degrade cellulose and also produce some ethanol. Yet none can do the job quickly and efficiently enough to be useful for large-scale manufacturing. Nature, Arnold explains, offers little help. "There are some organisms that break down cellulose," she says, "but the problem is that they don't make fuels, so that doesn't do you much good." An alternative, she says, is to genetically modify E. coli and yeast so that theysecrete enzymes that degrade cellulose. But while many different kinds of enzymes could do the job, "most them don't like to be inserted into E. coli and yeast." Arnold, however, is optimistic that the right organism will be discovered. "You never know what will happen tomorrow," she says, "whether it's done using synthetic biology or someone just scrapes one off the bottom of their shoe." She didn't quite scrape it off her shoe, but Susan Leschine, a microbiologist at the University of Massachusetts, Amherst, believes she just might have stumbled on a bug that will do the job. She found itin a soil sample collected more than a decade ago from the woods surrounding the Quabbin Reservoir, about 15 miles from her lab. The Quabbin sample was just one of many from around the world that Leschine was studying, so it was several years before she finished analyzing it. But when she did, she realized that one of its bacteria, Clostridium phytofermentans, had extraordinary properties. "It decomposes nearly all the components of the plant, and it forms ethanol as the main product," she says. "It produces prodigious amounts of ethanol." Leschine founded a company in Amherst, SunEthanol, that will attempt to scale up ethanol production using the bacterium. There's "a long way to go," she acknowledges, but she adds that "what we have is very different, and that gives us a leg up. We already have a microbe and have demonstrated it on real feedstocks." Leschine says that otheruseful microbes are probably waiting to be discovered: a single soilsample, after all, contains hundred of thousands of varieties. "In this zoo of microbes," she says, "we can think that there are others with similar properties out there."

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Cellulose Solves Ag Crisis
Agricultural demand will make biofuel consume nearly all arable land- only advanced biofuels solve.

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David Rotman, Editor of Technololgy Review, “The price of biofuels: making ethanol from corn is expensive. Better biofuels are years away from the gas tank. Farmers are reluctant to change their practices. But do we really have any alternative to biofuels?” Technology Review, Vol. 111 No. 1, January 1, 2008. Whether ethanol made from cellulosic biomass is good or bad for the environment, however, depends on what kind of biomass it is and how it is grown. In his office in St. Paul, David Tilman, a professor of ecology atthe University of Minnesota, pulls out a large aerial photo of a field sectioned into a neat grid. Even from the camera's vantage point far above the ground, the land looks poor. In one plot are thin rows of grasses, the sandy soil visible beneath. Tilman says the land was so infertile that agricultural use of it had been abandoned. Then he and his colleagues scraped off any remaining topsoil. "No farmer has land this bad," he says. In a series of tests, Tilman grew a mixture of native prairie grasses (including switchgrass) in some of the field's plots and single species in others. The results show that a diverse mix of grasses, even grown in extremely infertile soil, "could be a valuable source of biofuels," he says. "You could make more ethanol from an acre [of the mixed grasses] than you could from an acre of corn." Better yet, in apaper published in Science, Tilman showed that the prairie grasses could be used to make ethanol that is "carbon negative": the grasses might consume and store more carbon dioxide than is released by producing and burning the fuel made from them. The findings are striking because they suggest an environmentally beneficial way to produce massive amounts of biofuels without competing with food crops. By 2050, according to Tilman, the world will need a billion hectares more land for food. "That's the land mass of the entire United States just to feed the world," he says. "If you did a lot of biofuels on [arable] land--it is very easy to envision a billion hectares for biofuels--you will have no nature left and no reserve of land after 50 years." Instead, Tilman argues, it makes sense to grow biomass for fuels on relatively infertile land no longer used for agriculture.

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Cellulose Solves Dependence

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Cellulose will drop the price of biofuel- crowding out oil entirely
David Rotman, Editor of Technololgy Review, “The price of biofuels: making ethanol from corn is expensive. Better biofuels are years away from the gas tank. Farmers are reluctant to change their practices. But do we really have any alternative to biofuels?” Technology Review, Vol. 111 No. 1, January 1, 2008. Even in a Silicon Valley culture that reveres successful venture capitalists, Vinod Khosla has a special place of honor. A cofounder ofSun Microsystems in the early 1980s, Khosla later joined the venturecapital firm Kleiner Perkins Caufield and Byers, where in the late 1990s and early 2000s he gained a reputation for ignoring the dotcom excitement in favor of a series of esoteric startups in the far less glamorous field of optical networking. When several of the startups sold for billions of dollars to large companies gearing up their infrastructure for the Internet boom, Khosla became, in the words of one overheated headline of the time, "The No. 1 VC on the Planet." These days Khosla, who is now among the world's richest people (the Forbes 400 lists him at 317, with a net worth of $i.5 billion), is putting most of his investments in alternative energies. He counts among his portfolio companies more than a dozen biofuel startups--synthetic-biology companies LS9 and Amyris, cellulosic companies like Mascoma, and corn ethanol companies like Cilion, based in Goshen, CA. Butto call Khosla simply an investor in biofuels would greatly understate his involvement. In the last several years, he has emerged as one of the world's leading advocates of the technology, promoting its virtues and freely debating any detractors (see Q&A, March/April 2007). Khosla seems exasperated by the biofuels naysayers. Climate change, he says, is "by far the biggest issue" driving his interest in biofuels. If we want to head off climate change and decrease consumption of gasoline, "there are no alternatives" to using cellulosic biofuelsfor transportation. "Biomass is the only feedstock in sufficient quantities to cost-effectively replace oil," he says. "Nothing else exists." Hybrid and electric vehicles, he adds, are "just toys." In particular, argues Khosla, any transportation technology needs to compete in China and India, the fastest-growing automotive marketsin the world. "It's no big deal to sell a million plug-in electrics in a place like California," he says. The difficulty is selling a $20,000 hybrid vehicle in India. "No friggin' chance. And any technology not adoptable by China and India is irrelevant to climate change," he says. "Environmentalists don't focus on scalability. If you can't scale it up, it is just a toy. Hence the need for biofuels. Hence biofuels from biomass." In a number of opinion papers posted on the website of Khosla Ventures, a firm he started in 2004 that has invested heavily in biofuelsand other environmental technologies, Khosla envisions biofuel production rapidly increasing over the next 20 years. According to his numbers, production of corn ethanol will level off at 15 billion gallonsa year by 2014, but cellulosic ethanol will increase steadily, reaching 140 billion gallons by 2030. At that point, he predicts, biofuels will be cheap and abundant enough to replace gasoline for almost all purposes. While Khosla readily acknowledges the limitations of corn-derived ethanol, he says it has been an important "stepping-stone": the market for corn ethanol has created an infrastructure and market for biofuels in general, removing many of the business risks of investing in cellulosic ethanol. "The reason that I like [corn ethanol] is that its trajectory leads to cellulosic ethanol," he says. "Without corn ethanol, no one would be investing in cellulosics."

Page 85 of 139

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Add-on: Oil Sands
High oil prices = oil sands investment

ABJ

Leonard L. Coburn, former Director of Russian and Eurasian Affairs, U.S. Department of Energy ENERGY MARKETS AND GLOBAL POLITICS, 2006, available online at, www.aspeninstitute.org/.../EE_ENERGY_MARKETS_AND_GLOBAL_POLITICS_I.PDF. Today’s high oil price environment encourages the pursuit of oil sands investments and production. Estimates provided of the cost of supplying oil from the Alberta oil sands were in the $30-$35 per barrel range. With high energy prices Canada could produce about 3.5 mmbpd by 2020, with a potential to produce more than 5 mmbpd. But the region is experiencing serious cost escalations due to increased cost for the energy needed to produce oil sands. Oil sands either are mined and then processed using large quantities of energy to produce the oil, or produced under ground (in situ), again using large quantities of energy to produce steam that helps turn the heavy bitumen into flowing oil. Both methods also require large amounts of water. Based on projections using the latest, higher estimates of the cost of production, it is more likely that Alberta’s oil sands region will produce 2.6 mmbpd by 2015 and 3.2 mmbpd by 2020.

Page 86 of 139

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Off-Case: Uniqueness Shield
NU- The farm bill gives massive inventives for cellulose.

ABJ

ROSALIE WESTENSKOW, journalist, “Farm bill hikes biofuels funding,” UPI Energy May 22, 2008. The farm bill passed last week by Congress, and promised a veto this week by President Bush, gives a big boost to the renewable fuels industry. The bill passed by high majorities, with a vote of 318-106 in the House and 85-15 in the Senate -enough to override a veto if the majority of policymakers vote the same way again. Government subsidies and funding for the research and development of alternative fuels will increase by $1 billion if the bill becomes law. The provisions target cellulosic fuels, made out of non-food crops such as switchgrass or waste materials like corn cobs. In recent weeks, as food prices have skyrocketed, some experts have said increased production of corn-based ethanol is partly to blame. As a result, Congress wants to get cellulosic fuels up and running as soon as possible." America's energy solution will be achieved by expanding renewable fuel production and alternative energy through investment in scientific research," said Rep. Nick Lampson, D-Texas, who met with Senate leaders in conference to reconcile the House and Senate versions of the bill. "We need to make sure we are providing incentives and resources to industries that are working to diversify America's energy platform." The bill certainly does that, allocating the $1 billion for alternative fuels into a variety of different programs, including $320 million in loan guarantees for biorefineries producing advanced biofuels.

Page 87 of 139

Miami inst.
OFF Case: Oil Answers
Latin American and Asian growth will drive energy prices for the coming decades.
Leonard L. Coburn, former Director of Russian and Eurasian Affairs, U.S. Department of Energy ENERGY MARKETS AND GLOBAL POLITICS, 2006, available online at, www.aspeninstitute.org/.../EE_ENERGY_MARKETS_AND_GLOBAL_POLITICS_I.PDF.

ABJ

The Forum first looked at long term projections of energy demand and supply, primarily for oil but also for other resources. Since unconventional oil is becoming an important element in future supply projections, the discussions also focused in some detail on Canadian oil sands. The projections raised important energy security questions for policy makers, and the experts took a hard look at these questions from the U.S. perspective. A baseline energy outlook to 2030, based on energy demand by countries and end-use sectors, was provided by a major oil company as a basis for discussion. Total energy growth was linked to economic drivers such as the growth in GDP and population. Population is expected to increase by one third, growing from about 6 billion people in 2000 to 8 billion in 2030. The non-OECD or developing regions grow at a rate more than double that of the OECD. The most significant increases will occur in Latin America, Africa and particularly Asia Pacific (the non-OECD countries of that region, including China, India, and others).World GDP growth will be robust and will more than double over the 30-year time period, with an annual growth rate of 2.7%. Despite strong growth in the OECD, the fastest growth will be in Asia-Pacific, led by China, India, Indonesia, and Malaysia. By 2030, the GDP of the Asia Pacific region will approach that of Europe. This rapid economic growth will be a key driver of energy demand, and the world will need about 60 percent more energy in 2030 than in 2000. In the OECD countries, technology and efficiency gains will keep demand growth relatively small. But non-OECD demand, driven especially by the annual growth of 3.2 percent in the Asia-Pacific region,will move past the OECD countries. In addition the overall declining trend in energy intensity, the amount of energy used per unit of GDP, will continue everywhere, but the trend will accelerate in developing countries.

Page 88 of 139

Miami inst.
Off Case: Saudi Relations Answers
Saudi Arabia is looking passed the West for the sale of its oil.
Leonard L. Coburn, former Director of Russian and Eurasian Affairs, U.S. Department of Energy ENERGY MARKETS AND GLOBAL POLITICS, 2006, available online at, www.aspeninstitute.org/.../EE_ENERGY_MARKETS_AND_GLOBAL_POLITICS_I.PDF.

ABJ

Saudi Arabia is the largest oil producer and exporter. It also holds the largest oil reserves. Future production from Saudi Arabia can make the difference between adequately supplied or constrained markets. In response to concerns about the stability of the Saudi regime in the midst of strife throughout much of the Middle East, it was noted that the regime has been stable for more than 70 years and is likely to be able to make the investments necessary to meet future oil demand. The Saudi oil industry sees its future inextricably bound together with China and its rapidly growing economy. Long-term agreements with China are very valuable, and this is one of Saudi Aramco’s approaches to handling future risk. All agreements with the Chinese have been done on a commercial basis. The Saudis understand India’s and China’s efforts to diversify their sources of supply, which is not viewed by the Saudis as an attempt to undermine or damage U.S. foreign policy. As a result, the Saudis increasingly are looking to Asia-Pacific markets for their future and less towards the West. Saudi Aramco, the Saudi National Oil Company, handles all of Saudi Arabia’s oil production, but Saudi Aramco relies on international oil companies for many services. Saudi Aramco’s relationship with IOCs is strong, since the Saudis appreciate the ability of IOCs to handle a variety of risks, including geological, financial and political, and like the IOCs, they would prefer to let the market operate without much government interference. Saudi Arabia’s long-term strategy is building trust between consuming and producing nations, both in the West and in the East (Asia-Pacific). Saudi Aramco’s goal is to invest in many countries, build more downstream capacity to process its crude oil and at the same time enhance trust.

Page 89 of 139

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***Aff***

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Corn Ethanol Bad: Amazon

Cellulosic ethanol solves Amazonian deforestation – species loss alone causes planetary extinction
Lester
Brown,
Earth
Policy
Institute,
Plan
B
2.0
–
Rescuing
A
Planet
Under
Stress
And
A
Civilization
In
Trouble,


2006,
p.
35‐6

Aside from the prospective use of cellulose, current
and
planned
ethanol-producing operations use food crops such
as
 sugarcane,
sugar
beets,
corn,
wheat,
and
barley.
The
United
States,
for
example,
in
2004
used
32
million
tons
of
corn to produce
3.4
billion
gallons
of
ethanol.
Although
this
is
scarcely
12
percent
of
the
huge
U.S.
corn
crop,
it
is
enough
to
 feed
100
million
people
at
average
world
grain
consumption
levels.
In
an
oil‐short
world,
what
will
be
the
economic
 and
environmental
effects
of
agriculture's
emergence
as
a
producer
of
transport
fuels?
Agriculture's
role
in
the
global
 economy
clearly
will
be
strengthened
as
it
faces
a
vast,
virtually
unlimited
market
for
automotive
fuel.
Tropical
and
 subtropical
countries
that
can
produce
sugarcane
or
palm
oil
will
be
able
to
full
exploit
their
year‐round
growing
 conditions,
giving
them
a
strong
comparative
advantage
in
the
world
market.

With biofuel production spreading,
the
 world
price
for
oil
will,
in
effect,
become
a
support
price
for
farm
products.
If
food
and
feed
crop
prices
are
weak
and
 oil
prices
are
high,
commodities will go to fuel producers.
For
example,
vegetable
oils
trading
on
European
markets
 on
any
given
day
may
end
up
in
either
supermarkets
or
service
stations.
The
risk
is
that
economic pressures to clear land for expanding sugarcane production in the Brazilian
cerrado
and
Amazon basin
and
for
palm
oil
plantations
in
 countries
such
as
Indonesia
and
Malaysia
will pose a major new threat to plant and animal diversity.
In
the
absence
 of
governmental
constraints,
the rising price of oil could quickly become the leading threat to biodiversity, ensuring that the wave of extinctions now under way does
indeed
become the sixth great extinction.


Page 90 of 139

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Corn Ethanol Bad: Soil Erosion = Extinction

ABJ

Soil erosion causes global extinction.
Stephen Leahy, the science and environment correspondent for Inter Press Service News Agency, “Peak soil: the silent global crisis,” Earth Island Journal, Vol. 23 No. 1, March 22, 2008. A harsh winter wind blew last night, and this morning the thin snow cover has turned into a rich chocolate brown. The dirt covering the snow comes from cornfields near my home that were ploughed following the harvest, a common practice in southern Ontario and in the corn-growing regions of the US Midwest. A handful of this dirty snow melts quickly, leaving a thin, fine-grained wet mess. It doesn't look like much, but the mucky sludge in my hand is the prerequisite for life on the planet. "We are overlooking soil as the foundation of all life on Earth," says Andres Arnalds, assistant director of the Icelandic Soil Conservation Service. Arnalds is an eloquent spokesperson for the unheralded emergency of soil erosion, a problem that is reducing global food production and water availability, and is responsible for an estimated 30 percent of the greenhouse gases emissions. "Land degradation and desertification may be regarded as the silent crisis of the world, a genuine threat to the future of humankind." Arnalds is dead serious when he calls soil erosion a crisis. Each year, some 38,000 square miles of land become severely degraded or turn into desert. About five billion acres of arable land have been stripped of their precious layer of topsoil and been abandoned since the first wheat and barley fields were planted 10,000 years ago. In the past 40 years alone, 30 percent of the planet's arable land has become unproductive due to erosion, mainly in Asia and Africa. At current erosion rates, soils are being depleted faster than they are replenished, and nearly all of the remaining 11 billion acres of cropland and grazing land suffer from some degree of erosion. Most of this erosion is simply due to plowing, removal of crop residues after harvest, and overgrazing, which leaves soil naked and vulnerable to wind and rain. It is akin to tire wear on your car--a gradual, unobserved process that has potentially catastrophic consequences if ignored for too long. Arnalds has seen our perilous future crisis by looking into the past. Eleven hundred years ago, the first Icelandic settlers came to a cold island mostly covered by forests and lush meadows, and blessed with deep volcanic soils. In a pattern repeated around the world, settlers cleared the forests and put too many animals on the meadows, until 96 percent of the forest was gone and half the grasslands destroyed. By the 1800s, Iceland had become Europe's largest desert; the people starved, and the once prosperous country became one of the world's poorest. "Once soil is gone, you can't get it back," Arnalds says. "It's a non-renewable resource."

Soil erosion has cascading effects- risking extinction.
Stephen Leahy, the science and environment correspondent for Inter Press Service News Agency, “Peak soil: the silent global crisis,” Earth Island Journal, Vol. 23 No. 1, March 22, 2008. No one knows how much food-producing land will be left by 2050, when another three billion people are expected to join the current global population of 6.5 billion. What we do know is that right now, 99 percent of human food calories come from the land. Global food production has kept pace with population growth thus far thanks chiefly to the extensive use of chemical fertilizers. But food production per acre of land is starting to decline, primarily due to loss of productiveland and water shortages. The latter is often the result of soil erosion because soil and vegetation act as a sponge that holds and gradually releases water. And that soil erosion, in turn, is exacerbated by chemical farming practices that over time break down soil structure. Add to these challenges climate change's impact on soil erosion and the competition between growing food and producing biofuels, and it's frightening to consider the challenge of feeding nine billion people when nearly one billion go hungry fight now. Arnalds summarizes the challenge: More food will have to be produced within the next 50 years than during the last 101000 years combined. '"Securing food in many places will become a crisis of rapidly growing proportions." Erosion largely goes unnoticed by farmers as it "nickels and dimes you to death," says David Pimentel, an ecologist at Cornell University who has conducted extensive research on the subject. Even if therewere no humans on the planet, soils would still erode. The soil formation from the weathering of rock and the breakdown of plants, however, would be faster than the erosion rate; it takes roughly 500 years to create one inch of soil. Once humans remove natural vegetation, soil is exposed to raindrops that easily dislodge it, washing soil particles into creeks, streams, rivers, and eventually into the ocean. One rainstorm will wash away .04 inches of soil. This may not seem likemuch, but over one acre of land that fraction of an inch adds up to tons of topsoil. Wind also disrupts soil, and can transport dust huge distances. Dry and windy conditions blew nearly two inches of topsoil off Kansas farmlands during the winter of 1995-96. Contrary to common belief, the topsoil loss in Kansas didn't end up being neatly deposited on Page 91 of 139

Miami inst.

ABJ

farmsin neighboring states. More than 60 percent ended up clogging ditches, streams, rivers, and lakes. That makes waterways more prone to flooding (further exacerbating erosion) and contaminates them with fertilizer and pesticide residues, Pimentel says. Every rainy day or windy night steals a thin layer of soil from any exposed piece of ground until there is little left but sand and rock. "Iowa has some of the best and deepest soils in the world," Pimentel says, "and they've lost nearly 50 percent in the last hundred years." Erosion's potential threat to humanity remains largely ignored by the world community.

Page 92 of 139

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Corn Ethanol Bad: Soil Erosion- Corn Prices =
Corn inflation and oil dependence lead to rampant soil erosion.

ABJ

Stephen Leahy, the science and environment correspondent for Inter Press Service News Agency, “Peak soil: the silent global crisis,” Earth Island Journal, Vol. 23 No. 1, March 22, 2008. Such badlands can be found in every country in the world, and are easy to spot. A more worrisome trend is the hidden danger of losing soil fertility on lands that appear healthy. "Fertility loss on good soils has a much bigger impact than further degradation of badlands," Stocking says. Healthy topsoil is a complex mixture of minerals, bacteria, fungi,microscopic invertebrates, and larger invertebrates such as ants andearthworms that break down nutrients and transfer them to the roots of plants. Degradation of soils diminishes this incredible below-ground biodiversity, reducing crop yield as well as soils' ability to store and filter water and to regulate the global cycles of carbon, nitrogen, and phosphorus. While some American farmers control erosion using low- or no-till techniques for planting, the majority are mining the soil, according to Craig Cox, executive director of the Soil and Water Conservation Society, headquartered in Iowa. "Soil conservation has taken a back seat to maximizing production," Cox says. As Cox drives the rural roads of Iowa, he sees fresh signs of erosion on the world's best farmland. "It's amazing to see the extent of erosion here, mainly because of the absence of basic soil conservation techniques," he says. Those techniques--such as planting grasses along the edges of waterways and leaving crop residues on the soil are some of the hard lessons learned during the dust bowl years of the 1930s. But those lessons have been forgotten--or ignored. Driven by the high costs of fertilizer and fuel, and currently lucrative crop prices, farmers are planting rows of corn right to the edge of stream banks, and sometimes in the streams themselves. "It's amazing and discouraging to see," Cox says.

Page 93 of 139

Miami inst.
Corn Ethanol Bad – Global Warming
Corn Based Ethonal causes Global Warming

ABJ

<H. Josef Herbert, Associated Press Writer, “Study: Ethanol May Add to Global Warming”, USA Today, February 8, 2008>

WASHINGTON — The widespread use of ethanol from corn could result in nearly twice the greenhouse gas emissions as the gasoline it would replace because of expected land-use changes, researchers concluded Thursday. The study challenges the rush to biofuels as a response to global warming. "Using good cropland to expand biofuels will probably exacerbate global warming," concludes the study published in Science magazine. The researchers said that farmers under economic pressure to produce biofuels will increasingly "plow up more forest or grasslands," releasing much of the carbon formerly stored in plants and soils through decomposition or fires. Globally, more grasslands and forests will be converted to growing the crops to replace the loss of grains when U.S. farmers convert land to biofuels, the study said.

Corn Ethanol has negative global warming impacts
<Union of Concerned Scientists, “The Truth About Ethanol”, page last revised June 25, 2008> Accurate
lifecycle
emissions
accounting
requires
that
all
of
the
energy
and
inputs
associated
with
growing,
producing,
 delivering,
and
using
any
biofuel
are
tracked,
including
emissions
associated
with
changes
in
land
use.
Most
analyses
 conducted
before
2008
indicate
that
corn
ethanol
delivers
a
10
to
20
percent
reduction
in
global
warming
emissions
 over
its
lifecycle
compared
with
gasoline,
but
these
analyses
did
not
include
land
use
changes.
The
reduction
is
modest
 because
corn
production
requires
a
significant
amount
of
fossil
fuel
inputs
for
farm
operations,
processing
and
distilling,
 and
fertilizer
production
(generally
natural
gas).
Fertilizers
used
for
corn
production
also
generate
a
substantial
amount
 of
nitrous
oxide,
a
potent
global
warming
pollutant,
as
unused
fertilizer
breaks
down
in
the
field.
In
addition,
many
corn
 ethanol
production
facilities
operate
on
natural
gas;
if
new
production
facilities
use
coal
instead,
the
emission
benefits
 of
corn
ethanol
could
be
reduced
or
eliminated.


The cost to produce corn ethonal outweighs the entire net benefit of it.
<Sarah Tarver-Wahlquist and Tracy Fernandez Rysavy, “Corn Ethanol Isnʼt the Answer: A Co-Op American Exposé”, Co-Op America Quarterly, Summer 2007 (national non profit organization focusing on economic action to solve social and environmental problems. Co-Op Quarterly is their magazine)>.

In the US today, about 95 percent of our ethanol is derived from corn kernels. Because corn is such an energy-intensive plant to grow, and because the methods to process corn into ethanol are also energy intensive, it takes seven barrels of oil to produce eight barrels of corn ethanol, from field to processing plant, according to research by the traditionally rightleaning Cato Institute. So when you factor in production, ethanol curbs climate-changing vehicle emissions by a mere 12 percent over gasoline, according to a 2006 University of Minnesota study by Jason Hill and David Tilman. (With blends like E85—85 percent ethanol, 15 percent gas—that emissions reduction plummets to 2 percent.) And that’s only if the corn is grown on existing fields. Converting wildlife preserves to cropland to grow more ethanol would result in a net greenhouse gas release that would exacerbate global warming and negate any benefit, Hill told the University of Minnesota’s alumni magazine.

Page 94 of 139

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Corn Ethanol Bad – Emissions
Corn ethanol causes a significant increase in carbon emissions
Jeff
Jacoby,
Boston
Globe,
“How
government
makes
things
worse,”
3/9/2008,
Lexis


ABJ

Take
ethanol,
the
much‐hyped
biofuel
made
(primarily)
from
corn.
Ethanol
has
been
touted
as
a
weapon
in
the
 fashionable
crusade
against
climate
change,
because
when
mixed
with
gasoline,
it
modestly
reduces
emissions
of
carbon
 dioxide.
Reasoning
that
if
a
little
ethanol
is
good,
a
lot
must
be
better,
Congress
and
the
Bush
administration
recently
 mandated
a
sextupling
of
ethanol
production,
from
the
6
billion
gallons
produced
last
year
to
36
billion
by
2022.

But
 now
comes
word
that
expanding
ethanol
use
is
likely
to
mean
not
less
CO{‐2}
in
the
atmosphere,
but
more.
Instead
of
 reducing
greenhouse
gas
emissions
from
gasoline
by
20
percent
‐
the
estimate
Congress
relied
on
in
requiring
the
huge
 increase
in
production
‐
ethanol
use
will
cause
such
emissions
to
nearly
double
over
the
next
30
years.

The
problem,
 laid
out
in
two
new
studies
in
the
journal
Science,
is
that
it
takes
a
lot
of
land
to
grow
biofuel
feedstocks
such
as
corn,
 and
as
forests
or
grasslands
are
cleared
for
crops,
large
amounts
of
CO{‐2}
are
released.
Diverting
land
in
this
fashion
 also
eliminates
"carbon
sinks,"
which
absorb
atmospheric
CO{‐2}.
Bottom
line:
The
government's
ethanol
mandate
will
 generate
a
"carbon
debt"
that
will
take
decades,
maybe
centuries,
to
pay
off.



Corn ethanol increases carbon emissions – land-use changes Washington Post, 2/27/2008, “The Problem With Biofuels,” Lexis
AS
THE
United
States
searches
for
alternative
ways
to
feed
its
addiction
to
petroleum,
ethanol
and
other
biofuels
 derived
from
organic
material
have
been
considered
a
miracle
motor
vehicle
elixir.
The
energy
bill
signed
by
President
 Bush
in
December
mandates
that
at
least
36
billion
gallons
of
biofuels
a
year
be
used
by
2020.
Yet
separate
studies
 released
this
month
by
Princeton
University
and
the
Nature
Conservancy
reveal
that
biofuels
are
not
a
silver
bullet
in
the
 battle
against
global
warming.
In
fact,
they
could
make
things
worse.

Corn
and
sugar
cane
are
common
sources
of
 ethanol.
Aside
from
emitting
fewer
greenhouse
gases
than
coal
or
oil
when
burned
as
fuel,
these
biofuel
crops
remove
 carbon
from
the
atmosphere
while
they
are
growing
‐‐
thus
making
them
nearly
carbon‐neutral.
But
the
studies
show
 that
ethanol
may
be
even
more
dangerous
for
the
environment
than
fossil
fuels
are.
As
the
Princeton
study
points
out,
 clearing
previously
untouched
land
to
grow
biofuel
crops
releases
long‐sequestered
carbon
into
the
atmosphere.
While
 planting
corn
and
sugar
cane
in
already
tilled
land
is
fine,
a
problem
arises
when
farmers
churn
up
new
land
to
grow
 more
fuel
or
the
food
and
feed
displaced
by
biofuel
crops.

The
impact
of
these
land‐use
changes
is
enormous.
As
the
 study
from
the
Nature
Conservancy
warns,
"converting
rainforests,
peatlands,
savannas,
or
grasslands
to
produce
 biofuels
in
Brazil,
Southeast
Asia
and
the
United
States
creates
a
'biofuel
carbon
debt'
by
releasing
17
to
420
times
more
 carbon
dioxide
than
the
fossil
fuels
they
replace."
There
are
other
negative
effects.
Massive
amounts
of
water
are
 needed
to
irrigate
cornfields,
setting
up
potential
competition
between
farms
and
homes.
The
runoff
of
pesticides
and
 nitrogen‐based
fertilizers
used
by
farmers
could
lead
to
increased
pollution
and
oxygen‐depleted
waterways.
The
 natural
gas
used
to
make
the
fertilizer
adds
to
the
carbon
deficit
created
by
biofuels.



Page 95 of 139

Miami inst.
Corn Ethanol Bad: Water Pollution
Corn dependence for biofuel leads to massive species loss through water pollution.

ABJ

The Washington Post, “How Corn Ethanol Could Pollute the Bay,” August 26, 2007. Despite rising food prices, it seems that nearly everyone is turning to corn-based ethanol as their choice for alternative fuel. Hidden behind these headlines, though, is an equally important but less visible cost: water pollution. Corn is a "leaky" crop, losing more nitrogen per acre than most other crops. In the Washington region, much of this excess nitrogen ends up polluting the Chesapeake Bay and robbing fish, crabs and oysters of oxygen. For farmers, the demand for alternative fuels has brought much-needed, and deserved, increases in corn prices. Unfortunately, this summer's drought will keep mid-Atlantic farmers from realizing their potential windfall, and any unused nitrogen will wash into the bay this winter. Nationally, farmers planted 16 million new acres of corn for ethanol. Maryland farmers provided 200,000 of these acres, but over time, production could grow to as much as 1 million acres -- yielding an extra 8 million to 16 million pounds of nitrogen in the state's runoff. Regional officials are already struggling to reduce nitrogen loads by 100 million pounds. This additional load could set back regional water quality efforts by three to five years. This thirst for grain-based ethanol will add to the woes of our weakened ecosystems. Three strategies, however, could reduce and perhaps reverse the damage: Plugging the nitrogen leaks. Many farming methods can yield good crops with less nitrogen loss. These practices are used to some extent, but they need to be more diligently applied, and states need to ensure that all farmers adhere to them. With expanded production to support ethanol, these changes are needed now. Expanding conservation support. To offset the pressure of ethanol on crop production, policymakers should expand the federal and state programs that fund farmers who implement conservation practices. Congress is currently reauthorizing the farm bill and should take this opportunity to expand conservation efforts to offset the impacts of ethanol. Looking beyond corn. Research indicates that we can use native prairie grasses (such as switch grass) or fast-growing trees to fuel ethanol production. Cellulosic ethanol converts plant matter into ethanol rather than using edible grain. Production, handling and processing problems, however, may delay commercialization for another decade. Compared with corn, switch grass loses little nitrogen, traps greenhouse gases and builds better soils. Regional farmers could realize multiple income streams by harvesting switch grass for ethanol production, selling nitrogen and carbon reduction credits to sewage treatment and power plants, and collecting federal incentives for improving soils. When added together, switch grass is worth investing in. And that's before figuring in the benefits to our region's coastal waterways. We need to accelerate cellulosic ethanol development as we deepen our investment in corn ethanol. Without better management practices and policies, feeding corn to our cars will continue to pose a huge threat to our coastal waterways, while also threatening food supplies and prices. If ethanol is to become a truly "green" fuel, we must look beyond corn and toward cellulosic ethanol from prairie grasses.

Page 96 of 139

Miami inst.
Corn Ethanol Bad – Emissions Biofuels hurt the environment – increase land use and global warming due to inputs

ABJ

Ben
Lieberman
is
Senior
Policy
Analyst
for
Energy
and
Environment
and
Nicolas
Loris
is
a
Research
Assistant
in
the
 Thomas
A.
Roe
Institute
for
Economic
Policy
Studies
at
The
Heritage
Foundation,
5/15/2008,
“Time
to
Repeal
the
 Ethanol
Mandate,”
http://www.heritage.org/RESEARCH/ENERGYANDENVIRONMENT/WM1925.CFM
 Many
environmental
organizations
have
raised
concerns
about
the
increased
inputs
of
energy,
pesticides,
and
fertilizer
 needed
to
grow
more
corn.[6]
The
same
is
true
for
the
stress
on
water
supplies,
especially
now
that
corn
production
is
 being
expanded
in
locales
where
rainfall
is
insufficient
and
irrigation
is
needed.[7]
Even
land
that
is
now
protected
under
 federal
conservation
programs
may
soon
be
cleared
for
corn.[8]

In
addition,
the
facilities
that
turn
corn
into
ethanol
 create
emissions
issues
of
their
own.
The
goal
of
the
ethanol
mandate
was
to
reduce
carbon
dioxide
emissions,
but
after
 taking
into
account
the
carbon
dioxide
emitted
from
ethanol
production,
the
reduction
in
emissions
is
modest.[9]
These
 effects
on
the
land,
air,
and
water
have
already
raised
serious
concerns,
and
we
are
only
one‐quarter
of
the
way
toward
 the
eventual
36
billion‐gallon
target.
Clearly,
the
food
and
fuel
impacts
cannot
be
justified
by
environmental
benefits.

 Even
worse
is
the
turnabout
on
the
major
environmental
issue
of
the
day:
climate
change.
Proponents
of
ethanol
and
 other
biofuels
claimed
that
they
are
responsible
for
lower
carbon
dioxide
and
other
greenhouse
gas
emissions
than
the
 gasoline
they
displace,
but
several
recent
studies
challenge
this
assertion
and
argue
that
biofuels
increase
such
 emissions.[10]
Oxfam,
an
international
aid
organization,
argues
that
"large‐scale
growth
in
biofuels
demand
has
pushed
 up
food
prices
and
so
far
there
is
little
evidence
that
it
is
reducing
overall
carbon
emissions."[11]



Biofuel efforts at land conversion produce negative carbon emissions for centuries
Fargione
et
al
2008,
Joseph
Fargione,
Jason
Hill,
David
Tilman,
Stephen
Polasky,
Peter
Hawthorne,
The
Nature
 Conservancy,
Department
of
Ecology,
Evolution,
and
Behavior,
and
Department
of
Applied
Economics,
University
of
 Minnesota,
“Land
Clearing
and
the
Biofuel
Carbon
Debt,”
February
29,
2008,
Science
Vol.
319.
no.
5867,
pp.
1235
‐
1238
 Our
analyses
suggest
that
biofuels,
if
produced
on
converted
land,
could,
for
long
periods
of
time,
be
much
greater
net
 emitters
of
greenhouse
gases
than
the
fossil
fuels
that
they
typically
displace.
All
but
two—sugarcane
ethanol
and
 soybean
biodiesel
on
Cerrado—would
generate
greater
GHG
emissions
for
at
least
half
a
century,
with
several
forms
of
 biofuel
production
from
land
conversion
doing
so
for
centuries.
At
least
for
current
or
developing
biofuel
technologies,
 any
strategy
to
reduce
GHG
emissions
that
causes
land
conversion
from
native
ecosystems
to
cropland
is
likely
to
be
 counter‐productive.


Corn Ethonal can have more of a lifecycle emission than gas
<Union of Concerned Scientists, “The Truth About Ethanol”, page last revised June 25, 2008>
 Several
new
studies
have
focused
on
the
contribution
of
land
use
changes
to
lifecycle
global
warming
pollution.
If
land
is
 converted
from
forest
to
cropland,
there
can
be
a
significant
increase
in
global
warming
pollution.
Recent
estimates
 suggest
that
the
emissions
from
these
changes
in
land
use
may
be
huge
and
could
dramatically
shift
the
balance
of
risks
 and
rewards
for
some
kinds
of
ethanol.
For
example,
when
lifecycle
analysis
of
corn
ethanol
includes
land
use
changes
 caused
by
using
corn
for
ethanol
rather
than
food
or
animal
feed,
the
lifecycle
emissions
can
end
up
as
high
as
gasoline
 or
potentially
much
higher
(see
the
UCS
Land
Use
Fact
Sheet
for
more
details).



Page 97 of 139

Miami inst.

ABJ

Corn Ethanol Bad – Emissions Corn Ethanol releases more harmful emissions than gas. Robert
Hahn,
Cochairman,
U.S.
Alternative
Fuels
Council,
1990‐1992,
Senior
Fellow
and
Executive
Director
of
the
AEI

Center
for
Regulatory
and
Market
Studies,
“Ethanol's
Bottom
Line,”Wall
Street
Journal,http://www.aei.org/publications
 /pubID.27152,filter.all/pub_detail.asp,
11/24/07
 If
annual
production
increases
by
three
billion
gallons
in
2012‐‐a
plausibly
modest
number
when
the
EPA
made
its
own
 calculations‐‐we
estimate
that
the
costs
will
exceed
the
benefits
by
about
$1
billion
a
year.
If
domestic
production
 reaches
the
more
"optimistic"
Energy
Department
projection
for
that
year,
net
economic
costs
would
likely
top
$2
billion
 annually.
Our
analysis
is
deliberately
weighted
to
give
ethanol
the
benefit
of
a
doubt.
For
example,
we
assume
that,
on
 balance,
ethanol
from
corn
reduces
greenhouse
emissions,
even
though
recent
science
suggests
that
substituting
 ethanol
for
gasoline
might
actually
have
a
negative
impact
(it
increases
emissions
of
nitrous
oxide,
a
more
potent
 greenhouse
gas
than
carbon
dioxide).
Ethanol
distilled
from
grasses
and
waste
materials
has
a
better
environmental
 payoff,
but
has
much
higher
direct
production
costs.
Even
if
ways
are
found
to
make
alcohol
cost‐effectively
from
 otherwise
worthless
sources
of
carbon,
the
process
would
undermine
local
air
quality
as
it
slowed
global
warming.
 Though
ethanol
is
likely
to
reduce
tailpipe
emissions
of
carbon
monoxide
and
toxic
hydrocarbons
including
benzene
and
 formaldehyde,
the
extra
nitrogen
oxides
react
in
sunlight
to
form
smog.
The
picture
on
the
energy
side
is
a
little
brighter.
 For
each
barrel
of
oil
displaced
by
ethanol,
there
are
benefits
in
the
form
of
slightly
lower
oil
prices
and
reduced
 potential
for
economic
dislocation
from
oil‐price
spikes.
We
estimate
these
to
be
in
the
neighborhood
of
$500
million
 annually
in
2012.




Corn ethanol increases emissions of noxious fumes.
Jerry
Taylor,
Senior
Fellow
at
CATO,
and
Peter
Van
Doren,Senior
Fellow
at
CATO
and
Editor,
Regulation,
“The
Ethanol
Boondoggle,”
 The
Milken
Institute
Review,
First
Quarter,
2007.



One
of
the
most
commonly
heard
claims
about
ethanol
is
that
it
reduces
automobile
pollution.
Archer
Daniels
 Midland,
the
gigantic
commodities
processor,
has
paid
for
an
avalanche
of
advertising
for
some
years
now
suggesting
 that
ethanol
is
the
thin
yellow
kernel
standing
between
us

and
environmental
Armageddon.
Calling
these
claims
the
 equivalent
of
the
Big
Lie
is
probably
harsh,
but
it’s
also
accurate.
The
only
thorough
appraisal
of
the
peer
reviewed
and
 technical
literature
of
which
we
are
aware
of
was
published
last
year
by
Prof.
Robert
Niven
of
the
Australian
Defense
 Force
Academy
at
the
University
of
New
South
Wales.
He
found
that
when
evaporative
emissions
are
taken
into
 account,
E10
(fuel
that’s
nine
parts
conventional
gasoline
to
one
part
ethanol,
the
standard
mix
in
service
stations
in
the
 United
States)
actually
increases
emissions
of
total
hydrocarbons,
non‐methane
organic
compounds
and
volatile
 toxins.
Photochemical
smog
is
worsened
by
ethanol
consumption,
while
ambient
concentrations
of
toxic
chemicals
 are
higher
as
well.
By
no
coincidence,air
pollution
is
even
worse
from
E85,
the
85
percent
ethanol
fuel
now
being
 heavily
promoted
by
General
Motors.
The
picture
is
a
bit
better
for
greenhouse
gas
emissions,
but
not
by
much.
 Niven’s
review
found
that
E10
offers
only
a
1
percent
to
5
percent
reduction
of
greenhouse
emissions
over
 conventional
gasoline.
The
use
of
pure
ethanol
as
a
transportation
fuel,
however,
as
is
used
in
Brazil,
might
reduce
this
category

of
emissions
by
up
to
12
percent.


Page 98 of 139

Miami inst.
Corn Ethanol Bad – Emissions Corn ethanol increases overall emissions

ABJ

Jeff
Goodell,
contributing
editor
at
Rolling
Stone
and
a
frequent
contributor
to
the
New
York
Times
Magazine,
8/9/2007,
 “The
Ethanol
Scam:
One
of
America's
Biggest
Political
Boondoggles,”
 http://www.rollingstone.com/politics/story/15635751/the_ethanol_scam_one_of_americas_biggest_political_boondog gles/3
 Another
misconception
is
that
ethanol
is
green.
In
fact,
corn
production
depends
on
huge
amounts
of
fossil
fuel
‐‐
not
 just
the
diesel
needed
to
plow
fields
and
transport
crops,
but
also
the
vast
quantities
of
natural
gas
used
to
produce
 fertilizers.
Runoff
from
industrial‐scale
cornfields
also
silts
up
the
Mississippi
River
and
creates
a
vast
dead
zone
in
the
 Gulf
of
Mexico
every
summer.
What's
more,
when
corn
ethanol
is
burned
in
vehicles,
it
is
as
dirty
as
conventional
 gasoline
and
does
little
to
solve
global
warming:
E85
reduces
carbon
dioxide
emissions
by
a
modest
fifteen
percent
at
 best,
while
fueling
the
destruction
of
tropical
forests.


Page 99 of 139

Miami inst.
AT: Biofuels Help the Environment
Environmental benefits of current biofuels are miniscule

ABJ

Runge
and
Senauer
2007,
C.
Ford
Runge
is
Distinguished
McKnight
University
Professor
of
Applied
Economics
and
Law
 and
Director
of
the
Center
for
International
Food
and
Agricultural
Policy
at
the
University
of
Minnesota.
Benjamin
 Senauer
is
Professor
of
Applied
Economics
and
Co‐director
of
the
Food
Industry
Center
at
the
University
of
Minnesota,
 May/June
2007,
“How
Biofuels
Could
Starve
the
Poor,”
Foreign
Affiars,
Vol.
86,
Issue
3,
Ebsco
 Nor
is
corn‐based
ethanol
very
fuel
efficient.
Debates
over
the
"net
energy
balance"
of
biofuels
and
gasoline‐‐the
ratio
 between
the
energy
they
produce
and
the
energy
needed
to
produce
them‐‐have
raged
for
decades.
For
now,
corn‐ based
ethanol
appears
to
be
favored
over
gasoline,
and
biodiesel
over
petroleum
diesel‐‐but
not
by
much.
Scientists
at
 the
Argonne
National
Laboratory
and
the
National
Renewable
Energy
Laboratory
have
calculated
that
the
net
energy
 ratio
of
gasoline
is
0.81,
a
result
that
implies
an
input
larger
than
the
output.
Corn‐based
ethanol
has
a
ratio
that
ranges
 between
1.25
and
1.35,
which
is
better
than
breaking
even.
Petroleum
diesel
has
an
energy
ratio
of
0.83,
compared
with
 that
of
biodiesel
made
from
soybean
oil,
which
ranges
from
1.93
to
3.21.
(Biodiesel
produced
from
other
fats
and
oils,
 such
as
restaurant
grease,
may
be
more
energy
efficient.)

Similar
results
emerge
when
biofuels
are
compared
with
 gasoline
using
other
indices
of
environmental
impact,
such
as
greenhouse
gas
emissions.
The
full
cycle
of
the
production
 and
use
of
corn‐based
ethanol
releases
less
greenhouse
gases
than
does
that
of
gasoline,
but
only
by
12
to
26
percent.
 The
production
and
use
of
biodiesel
emits
41
to
78
percent
less
such
gases
than
do
the
production
and
use
of
 petroleum‐based
diesel
fuels.

Another
point
of
comparison
is
greenhouse
gas
emissions
per
mile
driven,
which
takes
 account
of
relative
fuel
efficiency.
Using
gasoline
blends
with
10
percent
corn‐based
ethanol
instead
of
pure
gasoline
 lowers
emissions
by
2
percent.
If
the
blend
is
85
percent
ethanol
(which
only
flexible‐fuel
vehicles
can
run
on),
 greenhouse
gas
emissions
fall
further:
by
23
percent
if
the
ethanol
is
corn‐based
and
by
64
percent
if
it
is
cellulose‐ based.
Likewise,
diesel
containing
2
percent
biodiesel
emits
1.6
percent
less
greenhouse
gases
than
does
petroleum
 diesel,
whereas
blends
with
20
percent
biodiesel
emit
16
percent
less,
and
pure
biodiesel
(also
for
use
only
in
special
 vehicles)
emits
78
percent
less.
On
the
other
hand,
biodiesel
can
increase
emissions
of
nitrogen
oxide,
which
contributes
 to
air
pollution.
In
short,
the
"green"
virtues
of
ethanol
and
biodiesel
are
modest
when
these
fuels
are
made
from
corn
 and
soybeans,
which
are
energy‐intensive,
highly
polluting
row
crops.



Page 100 of 139

Miami inst.
Corn Ethanol Bad – Environment
Corn Ethanol production bad for environment.

ABJ

Nick
Loris
and
Alison
Acosta
Fraser,

Director
of
the
Roe
Institute
for
Economic
Policy
Studies,
“Ethanol
Loses
Ground
at
U.N.
 Climate
Conference:
Congress
Should
Rethink
Energy
Bill
Mandate,”
http://www.heritage.org/Resear
 ch/EnergyandEnvironment/wm1750.cfm,
Heritage
Foundation,
12/17/07


The
claim
that
ethanol
production
is
good
for
the
environment
is
misleading
for
a
number
of
reasons.
First,
 transporting
ethanol
is
costlier
and
requires
more
energy
than
transporting
other
fuels.
Ethanol
must
be
transported
by
 petroleum‐using
trucks,
barges,
and
railroads,
because
any
moisture
in
the
pipelines
will
contaminate
the
ethanol
and
 make
it
virtually
useless.[3]
Second,
planting
corn
requires
farmers
to
use
a
number
of
pesticides
and
fertilizers
that
 harm
the
environment.
1995
Nobel
Laureate
P.J.
Crutzen
concluded
that
the
nitrous
oxide
emitted
from
biofuel
production
 contributes
as
much
or
more
to
global
warming
than
the
cooling
caused
by
fossil
fuel
reduction.[4]
Third,
the
proposed
 mandate
would
lead
to
greatly
expanded
ethanol
production;
consequently,
more
acreage
would
be
shifted
to
corn‐‐ either
by
clearing
forestland
or
by
converting
farmland
previously
used
to
grow
products
like
soybeans
or
wheat.[5]
 The
first
option
would
damage
the
environment
through
deforestation;
the
second
would
push
food
prices
even
higher.



Corn ethanol hurts the environment
<L.
 Leon
 Geyer,
 Professor,
 Virginia
 Tech,
 Department
 of
 Agricultural
 and
 Applied
 Economics,
 Phillip
 Chong,
 Research
 Assistant,
 Virginia
 Tech,
 Department
 of
 Agricultural
 and
 Applied
 Economics
 and
 Bill
 Hxue
 Research
 Associate,
 Virginia
 Tech,
Department
of
Agricultural
and
Applied
Economics,
12
Drake
J.
Agric.
L.
61,
2007,
Lexis.>

 Another
significant
impact
of
ethanol
revolves
around
the
environment.
Although
ethanol
has
been
praised
for
its
ability
 to
reduce
harmful
vehicle
emissions,
the
removal
of
biomass
for
energy
production
intensifies
soil
erosion,
water
runoff,
 and
soil
nutrient
loss.
As
Pimentel
states,
"the
removal
of
biomass
for
all
purposes,
but
most
especially
for
energy
 production,
threatens
the
integrity
of
the
entire
natural
ecosystem."
n111
More
specifically,
this
environmental
concern

 [*76]

stems
from
the
fear
that
an
increase
in
corn
farming
will
further
stress
the
environment
through
fertilizer
and
 pesticide
runoffs,
which
will
create
eutrophication
within
surrounding
watershed
areas.


Page 101 of 139

Miami inst.
Corn Ethanol Bad – Environment Ethanol production hurts air quality and the environment

ABJ

<Sarah Tarver-Wahlquist and Tracy Fernandez Rysavy, “Corn Ethanol Isnʼt the Answer: A Co-Op American Exposé”, Co-Op America Quarterly, Summer 2007 (national non profit organization focusing on economic action to solve social and environmental problems. Co-Op Quarterly is their magazine)>.

In addition, groups like the Sierra Club note that ethanol produces even more smog than gasoline, contributing to the poor air quality that’s behind increased instances of childhood asthma and lung problems in adults. A recent study by Stanford University atmospheric scientist Mark Z. Jacobson concluded that “a high blend of ethanol poses an equal or greater risk to public health than gasoline,” as widespread use could cause possible increases in respiratory-related deaths and hospitalizations. Archer Daniels Midland (ADM) is the main player in the ethanol sector, responsible for about 40 percent of US ethanol production—and its environmental record is nothing to be proud of. According to the nonprofit Corpwatch, ADM is currently under investigation for approximately 25 violations of Superfund laws. ADM has been cited several times by the EPA for flouting the Clean Air Act, including 52 plant violations resulting in a $351 million settlement with the EPA and US Department of Justice in 2003, one of the largest such settlements on record. In 2002, ADM landed in the top ten of the Political Economy Research Institute’s Toxic 100 index, which ranks the nation’s largest companies based on pollution levels. And in 2006, Ceres measured how 100 leading global companies are responding to global warming, looking at board oversight, public disclosure, emissions accounting, and strategic performance. On a 0 to 100 scale, ADM scored a dismal total of 12 points. ADM and its competitors Cargill and Dunge are also behind 60 percent of the financing of soy production in Brazil, which has resulted in the deforestation of 1.2 million hectares of Amazon rainforest, says Greenpeace International.

Corn growth causes pollution
<Sarah Tarver-Wahlquist and Tracy Fernandez Rysavy, “Corn Ethanol Isnʼt the Answer: A Co-Op American Exposé”, Co-Op America Quarterly, Summer 2007 (national non profit organization focusing on economic action to solve social and environmental problems. Co-Op Quarterly is their magazine)>.

Growing corn at the scale required to switch a significant amount of fuel in the US to ethanol could have devastating environmental effects. Corn requires more toxic pesticides and fertilizers than any other US food crops, according to the New York Times. Chlorpyrifos, the most commonly applied pesticide on corn, is banned by the US Environmental Protection Agency (EPA) for household use, and EPA studies have linked chlorpyrifos to brain damage in rats. The EPA has also classified Atrazine, the most commonly used herbicide on corn, as a possible carcinogen. Nitrogen, a main ingredient in corn fertilizers, encourages algae growth in saltwater, creating oxygen-starved “dead zones”—including a 12,000-foot dead zone in the Gulf of Mexico—that threaten aquatic life and water quality in coastal regions. Nitrogen runoff from farms is also contaminating water wells around the country. A 1998 study by the National Center for Environmental Health found that 13 percent of the domestic drinking-water wells in the Midwest contained unsafe levels of nitrates, which can cause birth defects.


Page 102 of 139

Miami inst.
Corn Ethanol Bad – Environment Corn ethanol as a way to decrease greenhouse gasses is expensive and bad for the environment.
Jerry
Taylor,Senior
Fellow
at
CATO,
and
Peter
Van
Doren,Senior
Fellow
at
CATO
and
Editor,
Regulation,
“The
Ethanol


ABJ

Boondoggle,”
The
Milken
Institute
Review,
First
Quarter,
2007

In
any
event,
this
debate
about
life‐cycle
emissions
from
ethanol
misses
the
point
that
reducing
greenhouse
gas
emissions
via


ethanol
would
be
an
incredibly
costly
proposition
–
$250
per
ton
according
to
a
recent
report
by
the
International
Energy

Agency.
Moreover,
that’s
a
conservative
estimate,
because
the
agency
considered
only
greenhouse
gas
emissions
from
automobile
 tailpipes.
Given
that
most
of
the
emissions
associated
with
ethanol
come
from
upstream
in
the
production
process,
a
full
accounting
 would
inflate
its
estimate
dramatically.
Spending
$250
(at
the
very
least)
to
remove
a
ton
of
carbon
from
the
atmosphere
is


an
incredibly
expensive
way
to
get
the
job
done
–
and
one
that
surely
costs
more
than
it
benefits
the
environment.

William
Nordhaus
of
Yale,
for
example,
calculates
that
an
optimal
policy
of
greenhouse
gas
controls
would
embrace
abatement
costs
 of
between
$15
and
$22
per
ton
of
carbon
in
the
United
States.
Accordingly,
employing
ethanol
to
reduce
greenhouse
gas
emissions
 is
fantastically
wasteful


Wait,
it
gets
worse.
Although
the
environmental
debate
regarding
ethanol
is
almost
exclusively
concerned
with
air‐ quality
issues,
a
forgotten
dimension
concerns
the
effect

of
ethanol
consumption
on
land
use.
Profitable
corn
 production
requires

tremendous
amounts
of
fertilizer,
pesticide
and
water.
Increasing
the
demand
for
ethanol
would
 increase
the
amount
of
land
dedicated
to
corn
production.
And
that
would
mean
more
water
pollution,
less
water
for
 other
uses,
and
more
ecosystem
destruction.
 In
short,
then,
ethanol
promises
to
reduce
greenhouse
gas
emissions,
but
not
by
very
much
and
at
an
unacceptable
 cost
since
there
are
any
number
of
less
expensive
means
to
the
same
end.
To
add
to
the
insult,
ethanol
worsens
air
 and
water
quality
and
contributes
to
habitat
destruction.


Corn ethanol damages bird habitat
Jim
Giles,
New
Scientist,
8/18/2007,
“Can
biofuels
rescue
America's
praries?”
Vol.
195,
Issue
2617,
Ebsco
 Spurred
on
by
rising
oil
prices
and
the
2005
Energy
Policy
Act,
which
demanded
that
at
least
28
billion
litres
of
ethanol
 be
produced
annually
by
2012,
the
number
of
US
corn
ethanol
plants
has
doubled
to
around
120
in
the
past
five
years.
 Indeed,
the
industry
is
already
close
to
the
2012
target,
according
to
figures
from
the
Renewable
Fuels
Association,
an
 ethanol
industry
body‐based
in
Washington
DC.
This
rapid
development
has
come
at
a
cost.
David
Sample
of
the
 Wisconsin
Department
of
Natural
Resources
in
Madison
told
the
ESA
meeting
that
corn
production
jumped
10
per
cent
 last
year
in
his
state
alone.
As
the
cornfields
expand,
government
grants
aimed
at
encouraging
farmers
to
set
aside
 marginal
land
to
protect
soils
and
biodiversity
are
going
unused.
This
trend
is
especially
damaging
for
birds
that
nest
in
 the
grass
that
grows
on
set‐aside
land.
Sample
estimates
that
16
per
cent
of
land
protected
under
the
set‐aside
scheme
 will
be
lost
this
year.
In
Wisconsin,
the
figure
could
exceed
one‐third.
"Marginal
land
is
being
developed
for
corn,
but
 corn
is
pretty
much
useless
as
a
habitat
for
the
birds
we
care
about,"
says
Sample.



Page 103 of 139

Miami inst.
Corn Ethanol Bad – Dead Zone
Excessive corn use increases nitrogen runoffs

ABJ

Runge
and
Senauer
2007,
C.
Ford
Runge
is
Distinguished
McKnight
University
Professor
of
Applied
Economics
and
Law
 and
Director
of
the
Center
for
International
Food
and
Agricultural
Policy
at
the
University
of
Minnesota.
Benjamin
 Senauer
is
Professor
of
Applied
Economics
and
Co‐director
of
the
Food
Industry
Center
at
the
University
of
Minnesota,
 May/June
2007,
“How
Biofuels
Could
Starve
the
Poor,”
Foreign
Affiars,
Vol.
86,
Issue
3,
Ebsco
 Should
corn
and
soybeans
be
used
as
fuel
crops
at
all?
Soybeans
and
especially
corn
are
row
crops
that
contribute
to
soil
 erosion
and
water
pollution
and
require
large
amounts
of
fertilizer,
pesticides,
and
fuel
to
grow,
harvest,
and
dry.
They
 are
the
major
cause
of
nitrogen
runoff‐‐the
harmful
leakage
of
nitrogen
from
fields
when
it
rains‐‐
of
the
type
that
has
 created
the
so‐called
dead
zone
in
the
Gulf
of
Mexico,
an
ocean
area
the
size
of
New
Jersey
that
has
so
little
oxygen
it
 can
barely
support
life.
In
the
United
States,
corn
and
soybeans
are
typically
planted
in
rotation,
because
soybeans
add
 nitrogen
to
the
soil,
which
corn
needs
to
grow.
But
as
corn
increasingly
displaces
soybeans
as
a
main
source
of
ethanol,
 it
will
be
cropped
continuously,
which
will
require
major
increases
in
nitrogen
fertilizer
and
aggravate
the
nitrogen
 runoff
problem.


Page 104 of 139

Miami inst.
Corn Ethanol Bad – Water Quality
Increase in producing corn ethonal can harm water quality
<The
National
Academies.
"Increase
In
Ethanol
Production
From
Corn
Could
Significantly
Harm
Water
Quality."
 ScienceDaily
11
October
2007.>


ABJ

A
National
Research
Council
committee
was
convened
to
look
at
how
shifts
in
the
nation's
agriculture
to
include
more
 energy
crops,
and
potentially
more
crops
overall,
could
affect
water
management
and
long‐term
sustainability
of
biofuel
 production.
Based
on
findings
presented
at
a
July
colloquium,
the
committee
came
to
several
conclusions
about
biofuel
 production
and
identified
options
for
addressing
them.
 In
terms
of
water
quantity,
the
committee
found
that
agricultural
shifts
to
growing
corn
and
expanding
biofuel
crops
 into
regions
with
little
agriculture,
especially
dry
areas,
could
change
current
irrigation
practices
and
greatly
increase
 pressure
on
water
resources
in
many
parts
of
the
United
States.
The
amount
of
rainfall
and
other
hydroclimate
 conditions
from
region
to
region
causes
significant
variations
in
the
water
requirement
for
the
same
crop,
the
report
 says.



Pesticides used for corn growth harm water quality
<The
National
Academies.
"Increase
In
Ethanol
Production
From
Corn
Could
Significantly
Harm
Water
Quality."
 ScienceDaily
11
October
2007.> A
possible
metric
to
gauge
the
impact
of
biofuels
on
water
quality
could
be
to
compare
the
amount
of
fertilizers
and
 pesticides
used
on
various
crops,
the
committee
suggested.
For
example,
corn
has
the
greatest
application
rates
of
both
 fertilizer
and
pesticides
per
acre,
higher
than
for
soybeans
and
mixed‐species
grassland
biomass.
The
switch
from
other
 crops
or
noncrop
plants
to
corn
would
likely
lead
to
much
higher
application
rates
of
highly
soluble
nitrogen,
which
 could
migrate
to
drinking
water
wells,
rivers,
and
streams,
the
committee
said.
When
not
removed
from
water
before
 consumption,
high
levels
of
nitrate
and
nitrite
‐‐
products
of
nitrogen
fertilizers
‐‐
could
have
significant
health
impacts.


Specific Examples of areas water quality harmed
<The
National
Academies.
"Increase
In
Ethanol
Production
From
Corn
Could
Significantly
Harm
Water
Quality."
 ScienceDaily
11
October
2007.>
 For
example,
in
the
Northern
and
Southern
Plains,
corn
generally
uses
more
water
than
soybeans
and
cotton,
while
the
 reverse
is
true
in
the
Pacific
and
mountain
regions
of
the
country.
Water
demands
for
drinking,
industry,
and
such
uses
 as
hydropower,
fish
habitat,
and
recreation
could
compete
with,
and
in
some
cases,
constrain
the
use
of
water
for
 biofuel
crops
in
some
regions.
Consequently,
growing
biofuel
crops
requiring
additional
irrigation
in
areas
with
limited
 water
supplies
is
a
major
concern,
the
report
says.


Page 105 of 139

Miami inst.
Corn Ethanol Bad – Unstable
Corn ethanol is not a secure source of energy.

ABJ

James
Eaves,assistant
professor
in
the
Department
of
Finance
and
Insurance
at
Laval
University,
and
Stephen
Eaves,
vice‐president
 of
Eaves
Devices,
“Is
Ethanol
the
“Energy
Security”
Solution,”Washington
Post
via
CATO,
10/03/07


Another ethanol shortcoming is that it is not very secure. While it is true that U.S. corn yields have increased substantially over the past few decades, researchers have observed that the year-to-year percentage gain has steadily declined. The rate peaked around 4 percent in the early 1960s and was less than 1.5 percent in 2001. That growth rate is not expected to keep up with food demand. Moreover, variability in U.S. corn yields appears to be increasing, a point that is underscored by this summer's drought. Researchers predict that, even under the best-case global warming scenario, corn yields are likely to decline by 22 percent in the short-run. For the sake of argument, let us be optimistic and assume yield variability will remain within historical parameters. We can then use data from the National Agricultural Statistics Service to estimate the frequency and size of ethanol disruptions that we should expect in the future. We then can compare this variability to the variability in oil imports. Specifically, let us consider the time period 1960-2005, a period that included, among other oil shocks, the Six-Day War, the Arab oil embargo, the Iranian revolution, and the outbreak of the Iran-Iraq War. If variations in the supplies of both corn and oil during this period are a reasonable guess about future variability, then in any given year we should not be surprised if corn yields decline by 11.9 percent. In contrast, a typical decline in Middle Eastern oil supplies would be only 6.8 percent. Moreover, in one out of every 20 years, we would expect corn yields to decline by 31.8 percent, while the corresponding disruption in the oil supply would be only 14.9 percent. Thus, based on history, displacing gasoline with ethanol would exchange geopolitical risk with yield risk. History suggests that yield risk is about twice as high.

Corn ethanol crops sensitive to weather and natural threats.

Colin
A.
Carter,
a
professor
of
agricultural
and
resource
economics
at
the
University
of
California
at
Davis,
Henry
I.
Miller,
physician
 and
fellow
at
Stanford
University's
Hoover
Institution,
“Drunk
on
Ethanol,”The
Washington
 Times,http://washingtontimes.com/news/2007/may/24/20070524‐083912‐6259r/,
5/27/07
 Until the recent ethanol boom, more than 60 percent of the annual U.S. corn harvest was fed domestically to cattle, hogs and chickens, or used in food or beverages. Thus, it is no surprise that competition for corn has doubled its price during the past year -from $2 to $4 per bushel. Because thousands of food items contain corn or corn byproducts, we see upward pressure on food prices as the demand for ethanol boosts the demand for corn: Nationally, food prices were up 3.9 percent in April, compared to the same month a year earlier.

These early effects may be only a hint of things to come. Any sort of shock to corn yields, such as drought, unseasonably hot weather, pests or disease in the next few years could send food prices into the stratosphere. Even
Gregory Page, the chief executive officer of agribusiness giant Cargill, a major beneficiary of the ethanol boom, shares these fears, "We just have to be sure that the more-is-better mindset [regarding ethanol] doesn't get way out ahead of the

capacity of the land to provide the fuel. ... What we would like to see is some thoughtfulness about what we will do if we have a weather calamity." Such concerns are more than theoretical: In 1970, a widespread outbreak of a fungus called Southern corn leaf blight destroyed 15 percent of the U.S. corn crop, and in 1988, drought reduced U.S. corn yields almost 30 percent. 
 
 


Page 106 of 139

Miami inst.
Corn Ethanol Bad – Not Sustainable

ABJ

Biofuels are not sustainable – don’t have a positive energy balance and, even if they did, they produce other environmental harms
Rajagopal
et
al
2007,
D
Rajagopal,
Energy
and
Resources
Group,
University
of
California
at
Berkeley,
S
E
Sexton,
D
 Roland‐Holst,
and
D
Zilberman,
Department
of
Agricultural
and
Resource
Economics,
University
of
California
at
Berkeley
 and
Zilberman
is
a
Member
of
Giannini
Foundation,
“Challenge
of
biofuel:
filling
the
tank
without
emptying
the
 stomach?”
11/30/2007,
http://www.iop.org/EJ/article/1748‐9326/2/4/044004/erl7_4_044004.html
 An
extensive
literature
compares
the
net
intensity
of
energy
consumption
(and
pollution
generation)
per
unit
of
useful
 energy
produced
by
biofuel
and
fossil
fuels
(Cleveland
2005,
de
Oliveira
et
al
2005,
Farrell
et
al
2006,
Pimentel
and
 Patzek
2005,
Sheehan
et
al
2003,
Tilman
et
al
2006).
One
measure
of
energy
intensity
is
the
energy
return
on
investment
 (EROI),
which
is
defined
as
the
ratio
of
useful
energy
delivered
by
an
energy
source
to
energy
expended
in
obtaining
that
 energy
source.
In
the
case
of
fuel
such
as
gasoline
or
ethanol,
it
measures
the
amount
of
energy
contained
in
a
litre
of
 fuel
compared
to
the
amount
of
energy
expended
in
producing
a
litre
of
fuel.
Cleveland
(2005)
reports
an
EROI
of
9:1
for
 oil
whereas
Farrell
et
al
(2006)
report
the
EROI
for
US‐produced
corn
ethanol
in
the
range
of
1.2–1.6.
Hall
et
al
(2003)
 argue
that
corn
ethanol
is
not
sustainable
because
of
its
low
EROI.
Moreover,
the
greenhouse
gas
emissions
reductions
 of
corn
ethanol
are
reported
to
be
marginal
at
best
(Farrell
et
al
2006).
Corn
ethanol
is,
therefore,
ineffectual
from
a
 climate
change
perspective
and
also
unsustainable
from
an
energy
efficiency
perspective.
Sugarcane
ethanol
in
Brazil
is
 reported
to
offer
higher
energy
return
and
greenhouse
gas
reductions
per
litre
of
ethanol
than
US‐made
corn
ethanol
 (Goldemberg
2007).
Like
corn
ethanol,
however,
sugarcane
ethanol
production
is
associated
with
externalities
that
must
 also
be
included
in
the
calculus
of
biofuel
sustainability.
Biofuel
is
a
land
and
water
intensive
technology.
Production
of
 biofuels
takes
land
away
from
its
two
other
primary
uses—food
production
and
environmental
preservation.
As
farming
 expands
to
produce
energy
crops,
soil
erosion
may
worsen,
application
of
chemical
pesticides
and
fertilizers
may
expand
 and
biodiversity
may
suffer
on
shrinking
environmental
lands.
A
positive
net
energy
balance,
therefore,
is
not
sufficient
 for
sustainability.
In
fact,
sugarcane
ethanol
can
appear
unsustainable
based
on
the
impact
its
production
has
on
water
 alone
(de
Oliveira
et
al
2005).
Likewise,
palm
biodiesel
production
in
Indonesia
is
viewed
as
unsustainable
because
of
its
 consequences
for
tropical
rainforests
(Curran
et
al
2004).



Page 107 of 139

Miami inst.
Corn Ethanol Bad – No Energy Independence
No Solution lies with corn ethonal to solve oil dependence

ABJ

<Sarah Tarver-Wahlquist and Tracy Fernandez Rysavy, “Corn Ethanol Isnʼt the Answer: A Co-Op American Exposé”, Co-Op America Quarterly, Summer 2007 (national non profit organization focusing on economic action to solve social and environmental problems. Co-Op Quarterly is their magazine)>.

One of ethanol’s main selling points is that it will heighten US security by reducing our dependence on oil imports from countries potentially harboring terrorists. But the fact is, growing that much corn for ethanol would make impossible demands on our agricultural land. The USDA estimates that 90.5 millions acres of corn will be planted in 2007 (up 12 million from 2006), but even if all of this corn were used for ethanol, it would only satisfy about 16 percent of our annual fuel needs. Any attempt to replace the 200 billion gallons of fuel used by US drivers each year with corn ethanol would require that 675 million additional acres, or 71 percent of America’s current farmland, be used to grow corn, according to Popular Mechanics. All told, these statistics reveal that corn ethanol could never hold out the prospect of energy independence.

Page 108 of 139

Miami inst.
AT: Corn Solves Energy Needs
Ethanol can’t be a gasoline substitute – technical problems

ABJ

Jeff
Goodell,
contributing
editor
at
Rolling
Stone
and
a
frequent
contributor
to
the
New
York
Times
Magazine,
8/9/2007,
 “The
Ethanol
Scam:
One
of
America's
Biggest
Political
Boondoggles,”
 http://www.rollingstone.com/politics/story/15635751/the_ethanol_scam_one_of_americas_biggest_political_boondog gles/2
 But
as
a
gasoline
substitute,
ethanol
has
big
problems:
Its
energy
density
is
one‐third
less
than
gasoline,
which
means
 you
have
to
burn
more
of
it
to
get
the
same
amount
of
power.
It
also
has
a
nasty
tendency
to
absorb
water,
so
it
can't
 be
transported
in
existing
pipelines
and
must
be
distributed
by
truck
or
rail,
which
is
tremendously
inefficient.


Not enough corn ethanol to solve oil dependence
Jeff
Goodell,
contributing
editor
at
Rolling
Stone
and
a
frequent
contributor
to
the
New
York
Times
Magazine,
8/9/2007,
 “The
Ethanol
Scam:
One
of
America's
Biggest
Political
Boondoggles,”
 http://www.rollingstone.com/politics/story/15635751/the_ethanol_scam_one_of_americas_biggest_political_boondog gles/3
 The
most
seductive
myth
about
ethanol
is
that
it
will
free
us
from
our
dependence
on
foreign
oil.
But
even
if
ethanol
 producers
manage
to
hit
the
mandate
of
36
billion
gallons
of
ethanol
by
2022,
that
will
replace
a
paltry
1.5
million
 barrels
of
oil
per
day
‐‐
only
seven
percent
of
current
oil
needs.
Even
if
the
entire
U.S.
corn
crop
were
used
to
make
 ethanol,
the
fuel
would
replace
only
twelve
percent
of
current
gasoline
use.


Replacing gasoline with corn ethanol implausible; prices and cultivation prove.
Jerry Taylor and Peter Van Doren, Senior Fellows at CATO, “Wishful thinking is No Magical Energy Elixir,” CATO,http://www.cato.org/pub_display.php?pub_id=8024, 2/26/07 Ethanol will not lead to energy independence. If all the corn produced in America in 2005 were dedicated to ethanol production (and only 14.3 percent of it was), U.S. gasoline consumption would have dropped by only 12 percent. For corn ethanol to completely displace gasoline in this country, we would need to appropriate all U.S. cropland, turn it over to ethanol production, and then find 20 percent more land on top of that. The U.S. Energy Information Administration believes the practical limit for domestic ethanol production is about 700,000 barrels per day -- in 2030. In 23 years, that will translate into about 6 percent of the U.S. transportation fuels market. According to a 2005 report by the U.S. Department of Agriculture, corn ethanol costs an average of $2.53 to produce -several times what it costs to produce a gallon of gasoline. Without subsidies, costs would be higher still. A study from the International Institute for Sustainable Development last fall found that ethanol subsidies amount to $1.05 to $1.38 per gallon, or 42 to 55 percent of ethanol's wholesale market price. Ethanol does not reduce gasoline prices. If you lived in urban areas that used reformulated gasoline last summer -that's the environmentally "clean" gasoline required for areas with air pollution problems -- you might have paid up to 60 cents a gallon more for gasoline. That's
because
the
federal
government
required
oil
refineries
to
use
4
billion
gallons
of
ethanol
in
2006,
regardless
of
 price,
and
gas
pump
prices
last
summer
reflected
the
fact
that
ethanol
was
twice
as
expensive
as
conventional
gas
in
 wholesale
markets,
and
far
more
costly
to
deliver.



Page 109 of 139

Miami inst.
AT: Corn Solves Energy Needs Corn ethanol doesn’t generate much energy savings
Jim
Giles,
New
Scientist,
8/18/2007,
“Can
biofuels
rescue
America's
praries?”
Vol.
195,
Issue
2617,
Ebsco


ABJ

Such
sacrifices
might
be
considered
justified
if
corn
ethanol
were
having
a
big
impact
on
greenhouse
gas
emissions.
 However,
corn
requires
large
amounts
of
fertiliser,
which
is
energy‐intensive
to
produce.
As
a
result,
corn
ethanol
 releases
at
most
only
25
per
cent
more
energy
than
is
required
to
grow
and
process
the
crop,
according
to
calculations
 published
last
year
by
a
team
led
by
Alex
Farrell
of
the
University
of
California
at
Berkeley
(Science,
DOI:
 10.1126/science.1121416).
His
team
calculated
that
the
total
greenhouse
gas
emissions
associated
with
running
a
car
on
 corn
ethanol
are
just
13
per
cent
lower
than
gasoline.
The
fertilisers
used
on
corn
also
pollute
streams
and
create
dead
 zones
‐‐
water
so
low
in
oxygen
it
kills
marine
life
‐‐
at
the
mouths
of
rivers.



Current ethanol production doesn’t solve our energy problems
Byron
King,
Peak
oil
correspondent
at
Whiskey
&
Gunpowder
(Macroeconomic
E‐Newsletter),
1/11/2007,
“Investing
in
 Ethanol,”
http://www.whiskeyandgunpowder.com/Archives/2007/20070111.html
 That
is,
262
million
barrels
of
ethanol
will
yield
less
energy
when
burned,
less
than
60%,
than
an
equivalent
volume
of
 gasoline
derived
from
oil.
We
won't
go
into
a
long
discussion
of
that
just
now.
Nor
will
we
get
into
the
energy
return
on
 energy
investment
(EROEI)
of
ethanol,
which
is
about
break‐even
at
best.
No,
we
won't
go
there.
Let's
keep
on
looking
at
 comparisons.
Sure,
262
million
is
a
lot
of
barrels
of
ethanol,
and
any
way
you
look
at
it,
the
ethanol
industry
is
putting
 big
numbers
into
the
energy
equation.
But
let's
look
at
some
other
big
numbers.
262
million
barrels
of
ethanol
per
year
 translates
into
about
718,000
barrels
per
day.
(Divide
by
365
days
in
the
year.)
In
terms
of
volume,
this
is
the
energy
 equivalent
of
replacing
about
two
supertankers
full
of
imported
oil
every
day.
OK,
not
bad,
and
this
looks
like
a
lot
of
fuel
 if
you
are
standing
next
to
one
of
the
two
supertankers,
but
how
much
is
it
really?
This
is
less
than
6%
of
U.S.
daily
oil
 imports.
Let's
look
some
more
at
the
number,
718,000
barrels
of
ethanol.
This
number
of
barrels,
coming
out
of
195
 ethanol
plants
(116
existing
plants,
plus
79
under
construction),
averages
about
3,680
barrels
of
ethanol
per
plant,
per
 day.
(More
division.
And
yes,
some
plants
will
produce
more
than
others.)
The
number
3,680
may
be
a
lot
of
barrels
if
 you
happen
to
own
the
average
ethanol
plant,
but
it
is
a
drop
in
the
bucket
of
U.S.
national
aggregate
demand
for
liquid
 fuel.



Corn ethanol is worthless
Jeff
Goodell,
contributing
editor
at
Rolling
Stone
and
a
frequent
contributor
to
the
New
York
Times
Magazine,
8/9/2007,
 “The
Ethanol
Scam:
One
of
America's
Biggest
Political
Boondoggles,”
 http://www.rollingstone.com/politics/story/15635751/the_ethanol_scam_one_of_americas_biggest_political_boondog gles/2
 Nor
is
all
ethanol
created
equal.
In
Brazil,
ethanol
made
from
sugar
cane
has
an
energy
balance
of
8‐to‐1
‐‐
that
is,
when
 you
add
up
the
fossil
fuels
used
to
irrigate,
fertilize,
grow,
transport
and
refine
sugar
cane
into
ethanol,
the
energy
 output
is
eight
times
higher
than
the
energy
inputs.
That's
a
better
deal
than
gasoline,
which
has
an
energy
balance
of
5‐ to‐1.
In
contrast,
the
energy
balance
of
corn
ethanol
is
only
1.3‐to‐1
‐
making
it
practically
worthless
as
an
energy
 source.
"Corn
ethanol
is
essentially
a
way
of
recycling
natural
gas,"
says
Robert
Rapier,
an
oil‐industry
engineer
who
runs
 the
R‐Squared
Energy
Blog.


Page 110 of 139

Miami inst.
AT: Corn Fulfills Legal Mandates
Other ethanol key to fulfill legal mandates

ABJ

Jeff
Goodell,
contributing
editor
at
Rolling
Stone
and
a
frequent
contributor
to
the
New
York
Times
Magazine,
8/9/2007,
 “The
Ethanol
Scam:
One
of
America's
Biggest
Political
Boondoggles,”
 http://www.rollingstone.com/politics/story/15635751/the_ethanol_scam_one_of_americas_biggest_political_boondog gles/2
 The
Iraq
War
has
also
been
a
boon
for
ADM
and
other
ethanol
producers.
The
Energy
Policy
Act
of
2005,
which
was
 pushed
by
Corn
Belt
politicians,
mandated
the
consumption
of
7.5
billion
gallons
of
biofuels
by
2012.
After
Democrats
 took
over
Congress
last
year,
they
too
vowed
to
"do
something"
about
America's
addiction
to
foreign
oil.
By
the
time
 Sen.
Jeff
Bingaman,
chair
of
the
Committee
on
Energy
and
Natural
Resources,
proposed
new
energy
legislation
this
 spring,
the
only
real
question
was
how
big
the
ethanol
mandate
would
be.
According
to
one
lobbyist,
36
billion
gallons
 became
"the
Goldilocks
number
‐‐
not
too
big
to
be
impractical,
not
too
small
to
satisfy
corn
growers."
Under
the
Senate
 bill,
only
15
billion
gallons
of
ethanol
will
come
from
corn,
in
part
because
even
corn
growers
admit
that
turning
more
 grain
into
fuel
would
disrupt
global
food
supplies.
The
remaining
21
billion
gallons
will
have
to
come
from
advanced
 biofuels,
most
of
which
are
currently
brewed
only
in
small‐scale
lab
experiments.
"It's
like
trying
to
solve
a
traffic
 problem
by
mandating
hovercraft,"
says
Dave
Juday,
an
independent
commodities
consultant.
"Except
we
don't
have
 hovercraft."
 
 
 


Page 111 of 139

Miami inst.
Current Ethanol Bad – Malaysian Forests
Ethanol destroys Malaysian forests, causing massive extinction and biodiversity loss

ABJ

George
Monbiot,
The
Guardian,
12/6/2005,
“The
most
destructive
crop
on
earth
is
no
solution
to
the
energy
crisis,”
 http://www.guardian.co.uk/print/0,3858,5349045‐103677,00.html
 Last
week,
the
chairman
of
Malaysia's
federal
land
development
authority
announced
that
he
was
about
to
build
a
new
 biodiesel
plant.
His
was
the
ninth
such
decision
in
four
months.
Four
new
refineries
are
being
built
in
Peninsula
Malaysia,
 one
in
Sarawak
and
two
in
Rotterdam.
Two
foreign
consortiums
‐
one
German,
one
American
‐
are
setting
up
rival
plants
 in
Singapore.
All
of
them
will
be
making
biodiesel
from
the
same
source:
oil
from
palm
trees.
"The
demand
for
 biodiesel,"
the
Malaysian
Star
reports,
"will
come
from
the
European
Community
...
This
fresh
demand
...
would,
at
the
 very
least,
take
up
most
of
Malaysia's
crude
palm
oil
inventories."
Why?
Because
it
is
cheaper
than
biodiesel
made
from
 any
other
crop.
In
September,
Friends
of
the
Earth
published
a
report
about
the
impact
of
palm
oil
production.
 "Between
1985
and
2000,"
it
found,
"the
development
of
oil‐palm
plantations
was
responsible
for
an
estimated
87
per
 cent
of
deforestation
in
Malaysia".
In
Sumatra
and
Borneo,
some
4
million
hectares
of
forest
have
been
converted
to
 palm
farms.
Now
a
further
6
million
hectares
are
scheduled
for
clearance
in
Malaysia,
and
16.5
million
in
Indonesia.
 Almost
all
the
remaining
forest
is
at
risk.
Even
the
famous
Tanjung
Puting
national
park
in
Kalimantan
is
being
ripped
 apart
by
oil
planters.
The
orangutan
is
likely
to
become
extinct
in
the
wild.
Sumatran
rhinos,
tigers,
gibbons,
tapirs,
 proboscis
monkeys
and
thousands
of
other
species
could
go
the
same
way.
Thousands
of
indigenous
people
have
been
 evicted
from
their
lands,
and
some
500
Indonesians
have
been
tortured
when
they
tried
to
resist.
The
forest
fires
which
 every
so
often
smother
the
region
in
smog
are
mostly
started
by
the
palm
growers.
The
entire
region
is
being
turned
 into
a
gigantic
vegetable
oil
field.
Before
oil
palms,
which
are
small
and
scrubby,
are
planted,
vast
forest
trees,
 containing
a
much
greater
store
of
carbon,
must
be
felled
and
burnt.
Having
used
up
the
drier
lands,
the
plantations
are
 moving
into
the
swamp
forests,
which
grow
on
peat.
When
they've
cut
the
trees,
the
planters
drain
the
ground.
As
the
 peat
dries
it
oxidises,
releasing
even
more
carbon
dioxide
than
the
trees.
In
terms
of
its
impact
on
both
the
local
and
 global
environments,
palm
biodiesel
is
more
destructive
than
crude
oil
from
Nigeria.



Page 112 of 139

Miami inst.
Current Ethanol Bad – Amazon Deforestation
Farm-grown fuels cause of destruction of Amazon – causes Global Warming.
Michael
Grunwald,
“The
Clean
Energy
Scam,”TIME
Magazine,Vol.
171
Issue
14,
p40‐45,
4/7/2008



ABJ

From his Cessna a mile above the southern Amazon, John Carter looks down on the destruction of the world's greatest ecological jewel. He watches men converting rain forest into cattle pastures and soybean fields with bulldozers and chains. He sees fires wiping out such gigantic swaths of jungle that scientists now debate the "savannization" of the Amazon. Brazil just announced that deforestation is on track to double this year; Carter, a Texas cowboy with all the subtlety of a chainsaw, says it's going to get worse fast. "It gives me goose bumps," says Carter, who founded a nonprofit to promote sustainable ranching on the Amazon frontier. "It's like witnessing a rape."

The Amazon was the chic eco-cause of the 1990s, revered as an incomparable storehouse of biodiversity. It's been overshadowed lately by global warming, but the Amazon rain forest happens also to be an incomparable storehouse of carbon, the very carbon that heats up the planet when it's released into the atmosphere. Brazil now ranks fourth in the world in carbon emissions, and most of its emissions come from deforestation. Carter is not a man
who gets easily spooked--he led a reconnaissance unit in Desert Storm, and I watched him grab a small anaconda with his bare hands in Brazil--but he can sound downright panicky about the future of the forest. "You can't protect it. There's too much money to be made tearing it down," he says. "Out here on the frontier, you really see the market at work."

This land rush is being accelerated by an unlikely source: biofuels. An explosion in demand for farm-grown fuels has raised global crop prices to record highs, which is spurring a dramatic expansion of Brazilian agriculture, which is invading the Amazon at an increasingly alarming rate. Propelled by mounting anxieties over soaring oil costs and climate change, biofuels have become the vanguard of the green-tech revolution, the trendy way for politicians and corporations to show they're serious about finding alternative sources
of energy and in the process slowing global warming. The U.S. quintupled its production of ethanol--ethyl alcohol, a fuel distilled from plant matter--in the past decade, and Washington has just mandated another fivefold increase in renewable fuels over the next decade. Europe has similarly aggressive biofuel mandates and subsidies, and Brazil's filling stations no longer even offer plain gasoline. Worldwide investment in biofuels rose from $5 billion in 1995 to $38 billion in 2005 and is expected to top $100 billion by 2010, thanks to investors like Richard Branson and George Soros, GE and BP, Ford and Shell, Cargill and the Carlyle Group. Renewable fuels has become one of those motherhood-and-apple-pie catchphrases, as unobjectionable

as the troops or the middle class.

Page 113 of 139

Miami inst.
Cellulose Ethanol Good – General
There are many advantages for cellulosic biofuels over corn ethanol.

ABJ

Nathanael
Greene,Senior
Policy
Analyst
at
the
Natural
Resources
Defense
Council,
et
al,“Growing
Energy:
How
Biofuels
Can
Help
 End
America’s
Dependence
on
Oil,”Natural
Resources
Defense
Council,
Dec.
2004


Biofuels,
especially
ethanol
derived
from
the
cellulosic
part
of
plants
rather
than
just
the
starch,
are
the
most
 promising
alternative
fuels
for
the
transportation
sector.
Replacing
oil
with
biofuels
would
allow
us
to
reinvest
billions
 of
dollars
in
our
factories
and
farms.
If
we
start
now
on
an
aggressive
plan
to
develop
and
deploy
advanced
biofuels
by
 2050:
•
Cellulosic
biofuels
can
displace
nearly
8
million
barrels
of
oil
per
day—nearly
equal
to
all
of
the
oil
used
by
 light‐duty
vehicles
today;
•
Biofuels
can
be
second
only
to
vehicle
fuel
economy
improvements
in
the
amount
of
oil
 they
save;•
Biofuels,
vehicle
efficiency,
and
smart
growth
could
eliminate
virtually
all
our
demand
for
gasoline;
and
•
 Biofuels
could
reduce
global
warming
pollution
by
1.7
billion
tons
per
year—22
percent
of
total
U.S.
emissions
in
2002.

 Biofuels
can
make
this
contribution
based
on
just
the
land
already
used
to
grow
crops
while
we
continue
to
meet
our
 other
existing
agricultural
demands.
Furthermore,
growing
the
biomass
needed
to
make
biofuels
could
help
 dramatically
reduce
the
environmental
footprint
of
agriculture.


Corn subsidies encourage market distortions – only cellulose ethanol solves
<L.
 Leon
 Geyer,
 Professor,
 Virginia
 Tech,
 Department
 of
 Agricultural
 and
 Applied
 Economics,
 Phillip
 Chong,
 Research
 Assistant,
 Virginia
 Tech,
 Department
 of
 Agricultural
 and
 Applied
 Economics
 and
 Bill
 Hxue
 Research
 Associate,
 Virginia
 Tech,
Department
of
Agricultural
and
Applied
Economics,
12
Drake
J.
Agric.
L.
61,
2007,
Lexis.>

 In
 addition
 to
 the
 issues
 presented
 directly
 above,
 ethanol
 subsidies
 present
 another
 significant
 issue.
 From
 1995
 through
2005,
corn
producers
received
$
51.2
billion
in
subsidies,
which
is
double
that
received
by
producers
of
wheat,
 the
next
highest
subsidy
recipient,
at
$
20.9
billion.
n113
The
concern
is
that
such
price
supports
may
create
a
"completely
 artificial
 demand
 for
 ethanol."
 n114
 The
 reason
 for
 concern
 lies
 in
 the
 fact
 such
 a
 condition
 may
 propel
 supply
 beyond
 demand
 which
 may
 encourage
 inefficiency
 and
 market
 distortions.
 Such
 market
 distortions
 reflect
 surging
 corn
 prices
 which
 led
 the
 National
 Cattlemen's
 Beef
 Association
 simply
 to
 call
 for
 "a
 transition
 to
 a
 market‐
 based
 approach
 to
 renewable
energy
production,
which
would
help
level
the
playing
field
for
cattle
producers
and
other
feed
grain
users."
 Such
 sentiment
 expresses
 the
 fact
 that
 growth
 of
 the
 corn‐based
 ethanol
 industry
 may
 have
 been
 purely
 "artificial,"
 propelled
 by
 eight
 to
 eleven
 billion
 dollars
 in
 annual
 subsidies.
 n11
 In
 terms
 of
 problems
 and
 threats
 to
 corn
 based
 ethanol,
 competition
 or
 substitute
 products
 offer
 significant
 trouble
 to
 future
 prospects.
 According
 to
 Jim
 Pease,
 commercial
production
of
economically
viable
cellulosic
ethanol
may
only
be
three
to
five
years
away.
 n118
Furthermore,
 due
 to
 cellulosic
 ethanol's
 great
 efficiency
 and
 a
 large
energy
 balance
 ratio,
 it
 represents
 the
 "biggest
 challenge"
 as
 a
 substitute
and
competitor
to
corn‐based
ethanol.
n119
Yet,
"Informa
Economics
analyst
Jim
Wiesemeyer
told
producers
at
 the
 recent
 Illinois
 Commodities
 Conference
 that
 'corn
 shouldn't
 be
 worried'
 in
 the
 near
 term
 about
 the
 drive
 toward
 biomass
fuels.

Page 114 of 139

Miami inst.
Cellulosic Ethanol Good – General Cellulosic ethanol is a more efficient energy source, and cleaner, than corn ethanol.

ABJ

Nathanael
Greene,Senior
Policy
Analyst
at
the
Natural
Resources
Defense
Council,
et
al,“Growing
Energy:
How
Biofuels
Can
Help
 End
America’s
Dependence
on
Oil,”Natural
Resources
Defense
Council,
Dec.
2004
 Two
recent
peer‐reviewed
studies,
one
in
Science
and
the
other
in
Environmental
Science
and
Technology,
reviewed
recent
reports
 on
the
energy
return
of
corn
and
cellulosic
ethanol.
Both
studies
show
that
there
is
actually
a
very
strong
consensus
in
the
scientific
 community
about
the
positive
return
from
both
corn
and
cellulosic
ethanol.
This
is
important
because
of
an
outdated
public
 perception
that
the
production
process
uses
more
fossil
fuel
energy
than
is
available
for
use
in
the
ethanol
that
is
produced.


Cellulosic
ethanol
has
a
better
energy
return
and
global
warming
pollution
profile
in
large
part
because
cellulosic
 biomass
arrives
at
the
ethanol
production
facility
combined
with
a
renewable
source
of
energy
more
than
sufficient
 to
drive
the
production
process.
Cellulose,
a
central
component
to
most
plant
matter,
is
bound
up
with
lignin,
another
 major
component.
While
lignin
cannot
be
fermented
into
ethanol,
it
does
have
a
significant
energy
value—
enough
 energy
in
fact
not
only
to
power
the
entire
ethanol
production
process
but
also
to
export
energy
either
as
electricity
 or,
possibly,
as
biofuels
using
gas‐to‐liquids
technology.



Page 115 of 139

Miami inst.
Cellulose Good: advanced Biofuels

ABJ

Advanced fuels increase efficiency, solve land use in 2 ways, increase yields and avoid a collapse of the corn ethanol industry
Jeff Tollefson, Energy reporter for Nature Magazine- fellow in science journalism at MIT, “Not your father's biofuels,” Nature Feb. 20, 2008. Biotechnology has changed the way that drugs are discovered, designed and, often, made. It has spread new capabilities across the farms of much of the world, sometimes amid much controversy. Now some of its advocates are suggesting that it is poised to overhaul the energy sector as well, changing both the crops that are grown and the fuels that are made from them. Entrepreneurs have attracted hundreds of millions of dollars for bio-energy companies working on 'secondgeneration' fuels produced from crop residues, grasses or woody materials that avoid the shortcomings of ethanol distilled from corn starch or biodiesel produced from oil crops. Some are offering hope for higher yields from less land, from more marginal land, and with less investment in terms of energy and fertilizer; others are promising fuels better suited to the needs of drivers and the existing fuel infrastructure. Even the major oil companies are getting involved. “The market is slated to be so big that there will be opportunities for multiple approaches, and it will probably take many years before we settle on one absolute best approach,” says Doug Cameron, chief science officer for Khosla Ventures, a venture-capital firm in Menlo Park, California, that is backing a large number of start-up bioenergy companies. Liquid biofuels will never make up a significant portion of the global transportation fuel supply unless biologists and engineers make the most of these opportunities. During the past four years alone, global ethanol production has more than doubled to nearly 50 billion litres (about 13.2 billion gallons) in 2007. Biodiesel, although starting out much lower, nearly quintupled to 9 billion litres (2.4 billion gallons) during the same period (see A growing concern). This rate of growth is not sustainable — and with current production methods far from desirable, because the agricultural techniques used often damage the environment on a scale that far outweighs any good achieved through the biofuels' use.

Page 116 of 139

Miami inst.
Cellulose Good: TECHNOLOGICAL FEASIBILITY
the
‘q
microbe’
proves
cellulosic
technology
is
already
feasible
–
its
only
a
question
of
commercialization



ABJ

Marshall, 2007 (Matt, Editor of Venture Beat and Ph.D., Venture Beat, August 14, http://venturebeat.com/2007/08/14/sunethanol-latest-cellulosic-ethanol-company-raises-round/) SUNETHANOL, AN AMHERST, MASS. BIOFUELS TECHNOLOGY COMPANY, SAID IT HAS RAISED A FIRST ROUND OF
FUNDING TO COMMERCIALIZE THE SO-CALLED “Q MICROBE,” A NATURAL BACTERIA THAT HELPS CONVERT CELLULOSE INTO ETHANOL. VERASUN ENERGY, BATTERY VENTURES AND LONG RIVER VENTURES, LED THE INVESTMENT, THE AMOUNT OF WHICH IS UNDISCLOSED. THERE ARE AT LEAST A DOZEN COMPANIES WORKING ON WAYS TO PRODUCE CELLULOSIC ETHANOL, WHICH IS CLEANER WAY TO MAKE ETHANOL. THE PROCESS RELIES ON WASTE FROM PLANTS, SHRUBS AND OTHER NATURAL PRODUCTS, AND IS CONSIDERED BY MOST SCIENTISTS AS POTENTIALLY ONE OF THE MOST ATTRACTIVE SOURCES OF ALTERNATIVE ENERGY.ACCORDING TO SUNETHANOL’S STATEMENT:SUNETHANOL’S Q MICROBE TECHNOLOGY, LICENSED FROM THE UNIVERSITY OF MASSACHUSETTS, HAS THE POTENTIAL TO MAKE THE PRODUCTION OF ETHANOL FROM CELLULOSE ECONOMICALLY COMPETITIVE. SUNETHANOL’S Q MICROBE REPRESENTS TRUE CONSOLIDATED BIOPROCESSING (CBP), A TECHNOLOGY THAT CONSOLIDATES MULTIPLE STEPS INTO A SINGLE EFFICIENT AND NATURAL PROCESS, POTENTIALLY RESULTING IN A LOWER COST OF PRODUCTION AND THE ABILITY TO CONVERT VARIOUS FORMS OF BIOMASS INTO ETHANOL. IT WAS DISCOVERED BY UNIVERSITY OF

MASSACHUSETTS PROFESSOR OF MICROBIOLOGY, DR. SUSAN LESCHINE IN THE SOIL OF NEW ENGLAND, NEAR THE QUABBIN RESERVOIR, AND IS BEING DEVELOPED FOR CELLULOSIC ETHANOL PRODUCTION BY DR. LESCHINE AND THE SUNETHANOL LAB TEAM. DR. LESCHINE SERVES AS A SENIOR ADVISOR TO SUNETHANOL. THE TEAM BELIEVES THAT THE Q MICROBE’S CBP PROCESS CAN BE USED WITH A WIDE VARIETY OF PLENTIFUL BIOMASS FEEDSTOCKS INCLUDING: SWITCHGRASS, CORN STOVER, WHEAT STRAW, SUGAR CANE BAGASSE, AND WOOD PULP. IT CAN POTENTIALLY BE USED IN ALL PARTS OF THE WORLD WHERE BIOMASS IS PLENTIFUL. 


Page 117 of 139

Miami inst.

 cellulosic
ethanol
is
necessary
to
offset
current
pretroleum
use



ABJ

Griffin and Lave, 2006 (W. Michael, Executive Director of the Green Design Initiative at Carnegie Mellon and Lester B., Professor of Economics at Carnegie Mellon, “Cellulosic Ethanol in an Oil and Carbon Constrained World”, A High Growth Strategy For Ethanol, Available via the Aspen Institute, http://www.aspeninstitute.org/atf/cf/{DEB6F227-659B-4EC88F84-8DF23CA704F5}/EEEethanol2.pdf) To fuel the entire US auto and light truck fleet on E10,15 billion gallons of ethanol per year would be needed (Table 1). A switch to E85 would require 166 billion gallons of ethanol. But corn ethanol production has limits due to co-product market saturation, reducing and possibly eliminating their production cost offsets for ethanol production. Also, corn has other uses. In our judgment, corn-ethanol production would be limited to 7 to 14 billion gallons. Thus, the US will need other sources of ethanol to embark on a serious reduction of petroleum use. In the immediate term this could come from imports, but ultimately most of the ethanol produced in the US will have to come from energy crops. Fuel economy will play an important role in the future. To cali- brate the potential for fuel savings via fuel economy improvements, the National Academy of Science’s Committee on the Effectiveness and Impact of Corporate Average Fuel Economy (CAFE) Standards found that advanced technologies including direct-injection lean- burn engines, directinjection compression-ignition engines, and hybrid electric vehicles could improve fuel economy by 20 to 40 per- cent. A 40 percent increase in fleet fuel economy would reduce the required amount ofethanol for E85 to 117 billion gallons, requiring just less the 100 billion gallons ofethanol to fuel the fleet. It is widely recognized that land use will be an important issue in the ultimate size and acceptance ofusing energy crops for cellulosic ethanol. Without going deeply into the various process technologies, the anticipated yields from switchgrass (a potential energy crop) and subsequent conversion to ethanol could produce about 1000 gallons of ethanol per acre. An E85 fuel would likely be used, since E100 would have cold-start problems throughout much of the US. Thus with no increase in fuel economy or in vehicle miles traveled, the land required to produce enough energy crops to completely dis- place current gasoline consumption in the US is around 160 million acres. Doubling fuel economy would reduce this to 80 million acres, although increases in vehicle miles traveled would increase it.

our
aff
rocks
bitches


Griffin and Lave, 2006 (W. Michael, Executive Director of the Green Design Initiative at Carnegie Mellon and Lester B., Professor of Economics at Carnegie Mellon, “Cellulosic Ethanol in an Oil and Carbon Constrained World”, A High Growth Strategy For Ethanol, Available via the Aspen Institute, http://www.aspeninstitute.org/atf/cf/{DEB6F227-659B-4EC88F84-8DF23CA704F5}/EEEethanol2.pdf) The third step is shifting ethanol production from corn to switch grass. To realize this potential, we need to reenergize the stalled R&D effort on cellulosic ethanol. A small pilot plant was built at the National Renewable Energy Laboratory years ago, with little progress since then. At this point there are no commercial plants producing cellulosic ethanol. An aggressive plan is needed to move the current best concepts to pilot and then full-scale production. The near term goal should be set so that we (1) rapidly reduce our dependence on petroleum and (2) move toward the development of cellulosic ethanol. The ultimate endpoint in the amount of ethanol integration into the US fuel supply will simply be determined by developments in crop yields, cellulosic processing technology, and oil prices. If switchgrass yields and ethanol production efficiency exceed the modest levels used in this discussion, choices can be made to increase production or to diminish the ethanol footprint. Oil at $60 per barrel, climate change and other environmental problems, excessive production of corn, the need to protect our farmland and strengthen our rural economy, and a foreign policy constrained by the need to protect our oil supply all point toward cellulosic ethanol as the principal source ofour motor vehicle fuel in the future. There are many benefits, few costs, and no need to make expensive, irreversible commitments. This is a policy that makes sense and should be pursued with vigor.

Page 118 of 139

Miami inst.
Cellulosic Ethanol Good – Gas Demand

ABJ

Cellulosic ethanol can offset the majority of the world’s demand for gas without excessive land use
Rajagopal
et
al
2007,
D
Rajagopal,
Energy
and
Resources
Group,
University
of
California
at
Berkeley,
S
E
Sexton,
D
 Roland‐Holst,
and
D
Zilberman,
Department
of
Agricultural
and
Resource
Economics,
University
of
California
at
Berkeley
 and
Zilberman
is
a
Member
of
Giannini
Foundation,
“Challenge
of
biofuel:
filling
the
tank
without
emptying
the
 stomach?”
11/30/2007,
http://www.iop.org/EJ/article/1748‐9326/2/4/044004/erl7_4_044004.html
 Whereas
the
first
generation
of
biofuels
has
provided
minimal
contributions
(if
any)
to
carbon
emission
mitigation
and
 has
increased
food
prices
and
threatened
natural
habitat
by
bringing
it
into
production
of
energy
crop,
the
second
 generation
of
biofuels
is
expected
to
provide
benefits
beyond
short‐term
gasoline
price
dampening,
terms
of
trade
 improvements,
and
wealth
transfers.
The
use
of
cellulosic
biomass
for
energy
production
is
expected
to
result
in
 significantly
higher
EROI
and
carbon
sequestration
compared
to
starch
and
sugar
based
biofuel
(Tilman
et
al
2006,
 Sheehan
et
al
2003,
Farrell
et
al
2006)Note14.
Just
as
corn
is
considered
an
unsustainable
feedstock,
ethanol
is
also
not
 an
ideal
biofuel
because
of
its
hydrophilic
nature,
which
increases
the
energy
cost
of
distillation
and
renders
it
corrosive
 to
the
pipes
that
constitute
gasoline
distribution
networks
(Somerville
2007).
Future
biofuels
may
encompass
a
broader
 set
of
fuels
such
as
bio‐butanol
or
higher
chain
hydrocarbon
fuels
similar
in
composition
to
gasoline
or
diesel
(Somerville
 2007).
According
to
the
Intergovernmental
Panel
on
Climate
Change's
(IPCC)
fourth
assessment
report
on
climate
 change,
second‐generation
biofuels
are
considered
one
of
the
key
mitigation
technologies
for
the
transportation
sector.
 They
are
expected
to
be
commercialized
by
2030
(IPCC
2007).
Regardless
of
the
ultimate
form
of
biofuel,
second‐ generation
biofuels
are
likely
to
depend
on
cellulosic
matter
for
feedstock,
primarily
because
of
the
significantly
higher
 yield
per
hectare
of
cellulose
compared
to
sugar
or
starch
cropsNote15.
Cellulosic
conversion
technologies
will
also
 enable
the
use
of
crop
residues
in
biofuel
production.
In
table
3
we
report
cellulosic
energy
production
for
a
 hypothetical
scenario
in
which
100
million
hectares
of
cropland
are
allocated
to
each
switchgrass
and
miscanthus
to
 produce
lingo‐cellulosic
biomass.
The
table
also
shows
the
energy
potential
of
crop
residues.
Under
these
assumptions,
 about
14%
of
today's
global
cropland
along
with
crop
residues
from
other
agricultural
lands
could
offset
91%
of
current
 global
demand
for
gasoline.



Cellulose solves energy balances
Brent
D.
Yacobucci,
Specialist
in
Energy
and
Environmental
Policy,
Resources,
Science,
and
Industry
Division,
“Fuel
 Ethanol:
Background
and
Public
Policy
Issues,”
3/28/2008,
http://www.nationalaglawcenter.org/assets/crs/RL33290.pdf
 Cellulosic Ethanol Energy Balance.
Because
cellulosic
feedstocks
require
far
less
fertilizer
for
their
production,
the
 energy
balance
and
other
benefits
of
cellulosic
ethanol
could
be
significant.
The
Argonne
study
concluded
that
with
 advances
in
technology,
the
use
of
cellulose‐based
E10
could
reduce
fossil
energy
consumption
per
mile
by
8%,
while
 cellulose‐based
E85
could
reduce
fossil
energy
consumption
by
roughly
70%.64 


Page 119 of 139

Miami inst.
Cellulosic Ethanol Good – Gas Emissions
Cellulosic ethanol is efficient and reduces greenhouse gas emissions
Jim
Giles,
New
Scientist,
8/18/2007,
“Can
biofuels
rescue
America's
praries?”
Vol.
195,
Issue
2617,
Ebsco


ABJ

Yet
studies
presented
at
the
ESA
meeting
suggest
that
cellulosic
ethanol
from
native
grasses
could
fix
many
of
these
 problems.
Ethanol
is
fermented
from
sugars,
which
can
be
produced
easily
from
corn
starch
or
extracted
directly
from
 sugar
cane
(see
"All
aboard
the
Brazilian
bandwagon").
But
sugars
can
also
be
produced
from
cellulose,
which
makes
up
 most
of
the
biomass
of
fast‐growing
prairie
grasses.
Although
the
process
of
extracting
sugar
is
more
complex
than
for
 corn
starch,
cellulosic
ethanol
from
wild
grasses
has
big
potential
energetic
and
environmental
advantages.
Robert
 Mitchell
of
the
University
of
Nebraska
in
Lincoln
has
been
monitoring
10
farmscale
plots
of
switchgrass
since
2000.
 Based
on
yields
from
these
plots,
and
models
describing
the
production
of
cellulosic
ethanol,
he
told
the
ESA
meeting
 that
ethanol
produced
from
such
grasses
would
yield
up
to
15
times
more
energy
than
it
uses
during
production,
a
huge
 improvement
on
corn.
Jason
Hill
of
the
University
of
Minnesota
in
St
Paul
has
come
up
with
similarly
impressive
 projections.
Hill
did
not
add
the
fertiliser
that
Mitchell's
group
used,
so
the
energy
yield
from
his
grasses
was
2
to
6
times
 less.
Significantly,
though,
the
grasses
took
in
more
carbon
dioxide
from
the
atmosphere
than
was
released
from
the
 fuel
used
to
grow
and
process
them.
The
carbon
dioxide
removed
‐‐
around
a
third
of
a
tonne
per
hectare
per
year
‐‐
 was
taken
up
by
the
roots
and
so
remained
in
the
soil
after
the
harvest.
This
means
that
the
greenhouse
gas
savings
 from
wild‐grass
ethanol
could
be
up
to
16
times
as
great
as
those
from
corn
(Science,
DOI:
10.1126/science.1133306).



Biofuels increase emissions – waste biomass through cellulose is better
Fargione
et
al
2008,
Joseph
Fargione,
Jason
Hill,
David
Tilman,
Stephen
Polasky,
Peter
Hawthorne,
The
Nature
 Conservancy,
Department
of
Ecology,
Evolution,
and
Behavior,
and
Department
of
Applied
Economics,
University
of
 Minnesota,
“Land
Clearing
and
the
Biofuel
Carbon
Debt,”
February
29,
2008,
Science
Vol.
319.
no.
5867,
pp.
1235
‐
1238
 Our
results
demonstrate
that
the
net
effect
of
biofuel
production
via
clearing
of
carbon‐rich
habitats
is
to
increase
CO2
 emissions
for
decades
or
centuries
relative
to
the
emissions
caused
by
fossil
fuel
use.
Conversely,
biofuels
from
 perennials
grown
on
degraded
cropland
and
from
waste
biomass
would
minimize
habitat
destruction,
competition
with
 food
production,
and
carbon
debts,
all
of
which
are
associated
with
direct
and
indirect
land
clearing
for
biofuel
 production.


Cellulose is a better emissions-reducing investment than corn ethanol
Sebastian
Mallaby,
Washington
Post,
“The
Other
Team's
Playbook,”
1/15/2007,
http://www.washingtonpost.com/wp‐ dyn/content/article/2007/01/14/AR2007011400888_pf.html
 A
mistaken
focus
on
energy
security
can
undermine
good
policy
on
climate.
If
you
just
want
to
cut
imports,
switching
 cars
to
corn‐based
ethanol
sounds
great:
The
United
States
will
get
its
fuel
from
the
Midwest
rather
than
the
Middle
 East,
a
politically
irresistible
promise.
But
corn‐based
ethanol
is
only
marginally
better
than
gasoline
in
terms
of
 greenhouse
emissions.
Federal
subsidies
for
this
technology
would
be
better
spent
elsewhere
‐‐
for
example
on
next‐ generation
cellulosic
ethanol.
 
 


Page 120 of 139

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Cellulosic Ethanol Good – Global Warming
Cellulosic ethonal decreases global warming emissions compared to gas and corn ethonal
<Union of Concerned Scientists, “The Truth About Ethanol”, page last revised June 25, 2008>


ABJ

Cellulosic
ethanol
can
reduce
lifecycle
global
warming
emissions
by
as
much
as
80
to
90
percent
compared
with
 gasoline.
Cellulosic
materials
require
less
fertilizer
to
grow
and
require
less
land
in
order
to
produce
an
equivalent
 amount
of
fuel.
Additionally,
the
non‐fermentable
parts
of
the
plant
can
be
used
as
combustible
fuel
in
place
of
fossil
 fuels.
However,
if
cellulosic
ethanol
is
made
from
crops
that
compete
with
food
crops
for
land,
indirect
changes
in
land
 use
can
reduce
or
eliminate
the
benefits
of
cellulosic
ethanol.
In
order
for
cellulosic
ethanol
to
achieve
its
potential,
we
 need
to
make
good
choices
about
how
and
where
the
cellulosic
materials
are
grown.

 


transition to cellulosic ethanol solves warming by drastically reducing co2 emissions

 

Griffin and Lave, 2006 (W. Michael, Executive Director of the Green Design Initiative at Carnegie Mellon and Lester B., Professor of Economics at Carnegie Mellon, “Cellulosic Ethanol in an Oil and Carbon Constrained World”, A High Growth Strategy For Ethanol, Available via the Aspen Institute, http://www.aspeninstitute.org/atf/cf/{DEB6F227-659B-4EC88F84-8DF23CA704F5}/EEEethanol2.pdf) Even with abundant petroleum, concern for limiting greenhouse gas emissions requires curtailing the use of petroleum and other fossil fuels. To achieve even modest emissions goals, the use of gasoline-diesel would have to be cut drastically. In order for the US to continue growing while slowing then eliminating the growth of greenhouse gas,CO2 emissions per dollar of GDP would have to fall sharply. Assuming that GDP grows at 3 percent per year, emissions per dollar of GDP would have to fall by 75 percent in 50 years and by 95 percent in 100 years. Thus, a century from now, there cannot be any CO2 emissions from motor vehicles and gasoline and diesel will not be permissible fuels, even iffuel economy were increased to 100 miles per gallon. Cellulosic ethanol has the potential to begin the migration to a greenhouse gas neutral fuel supply over the next few years. The use of cellulosic ethanol simply recycles recent origin CO2 by capturing the CO2 as the plant grows and then releasing it as the ethanol is burned as a fuel. The fossil fuels used in growing the biomass (fer- tilizers, herbicides, tractors, etc.), transporting the biomass, and transporting the ethanol to the end user are offset to some extent by using excess energy generated from burning the lignin fraction of the biomass for grid electricity. Process energy for the production of ethanol is provided by lignin combustion. The midpoint of a range of values from a number of studies looking at life cycle CO2 emis- sions from “wells to tank” showed on average that E10 could reduce CO2 emissions compared to gasoline by 27 percent, and E85 by about 240 percent. Very recently new studies have shown even greater reductions in overall CO2 emissions. The cost of CO2 abatement is important. There are many potential methods for point source emissions reduction, but mobile sources are more difficult. The potential of CO2 reductions generated by producing and using cellulosic ethanol versus gasoline makes cellulosic ethanol an important approach. The cost of abatement is sensitive to the price differential between cellulosic ethanol and gaso- line. For instance, in 2004 the average US wholesale price for ethanol was $1.72. The corresponding gasoline wholesale price was $1.27, making the cellulosic ethanol CO2 abatement cost $240 to $270/ton ofCO2for E85 and E10 respectively, taking into account energy den- sity differences. However, in 2005 the gap between the gasoline and ethanol prices narrowed to a $0.13 differential. The resulting abatement costs would then decrease to $70 to $77/ton CO2, for E85 and E10. If the price of gasoline exceeds ethanol, which is entirely plausible, then the CO abatement costs could be essentially zero.

Page 121 of 139

Miami inst.
Cellulosic Ethanol Good – Environment
Environmental Impacts of corn ethanol compared to cellulosic
<Union of Concerned Scientists, “The Truth About Ethanol”, page last revised June 25, 2008>

ABJ

The
environmental
impact
is
particularly
high
when
forestland
is
cleared
for
monocrop
farming
of
current
generation
 feedstocks
like
corn.
If
done
right,
next
generation
feedstocks,
such
as
mixed
prairie
grasses,
may
offer
a
lower‐impact
 alternative,
especially
if
grown
with
smart
farming
practices,
such
as
no
or
low‐till,
plant
diversification,
and
lower
 pesticide
and
fertilizer
use.
This
potential
for
displacing
some
of
our
fossil
fuel
use
makes
next
generation
biomass
 feedstocks
a
worthwhile
target
for
research
and
development.
As
we
expand
our
biofuels
production,
there
must
be
 adequate
safeguards
in
place
to
ensure
that
fuels
are
produced
in
a
manner
that
safeguards
the
environment.



Page 122 of 139

Miami inst.
Cellulosic Ethanol Good – Biodiversity
Cellulose ethanol development restores biodiversity
Jim
Giles,
New
Scientist,
8/18/2007,
“Can
biofuels
rescue
America's
praries?”
Vol.
195,
Issue
2617,
Ebsco


ABJ

Hill's
work
also
suggests
that
wild
grass
could
be
farmed
more
efficiently
in
mixed
species
plots,
mimicking
the
make‐up
 of
natural
prairie.
When
his
group
combined
eight
species
of
grass
in
a
single
plot,
yields
were
more
than
150
per
cent
 higher
than
from
grass
monocultures.
In
16‐species
plots,
the
improvement
was
238
per
cent.
Such
diverse
mixes
 provide
better
havens
for
wildlife.
In
Wisconsin,
Sample
has
studied
field‐sized
plots
of
mixed
grasses
of
the
type
that
 would
be
suitable
for
biofuel
farming.
He
found
that
a
typical
plot
hosted
three
threatened
bird
species,
while
the
 average
for
corn
was
less
than
one
species
per
plot.
Harvesting
the
grass
should
not
wipe
out
these
gains
in
biodiversity,
 because
it
would
have
a
similar
effect
to
the
fires
that
sweep
through
natural
prairies
most
years.
It
all
suggests
that
 America's
prairies,
which
now
cover
just
1
per
cent
of
their
original
area,
could
be
partially
restored
by
biofuel
farming,
 Hill
says.



Page 123 of 139

Miami inst.
Cellulosic Ethanol Good – Land Use
Cellulosic ethanol gets more material out of one acre of land and can be grown on marginal land.

ABJ

<Environmental Protection, “With
Cellulosic
Ethanol,
There
is
No
Food
vs.
Fuel
Debate
MSU
Scientist
States”,

April
1,
 2007>
 Cellulosic
ethanol
is
made
from
the
stems,
leaves,
stalks
and
trunks
of
plants,
none
of
which
is
used
for
human
food
 production.
Having
studied
ethanol
for
more
than
30
years,
Dale
said
that
as
the
country
moves
toward
large‐scale
 cellulosic
ethanol
production,
the
yield
of
so‐called
energy
crops
‐‐
grasses
and
woody
materials
grown
for
their
energy
 content
‐‐
also
will
increase
dramatically.

 "This
will
reduce
pressure
on
our
land
resources,"
said
Dale,
who
also
is
associate
director
of
the
MSU
Office
of
Biobased
 Technologies.
"We'll
be
able
to
get
more
raw
material
out
of
one
acre
of
land."

 Dale
said
that
many
of
these
energy
crops
will
be
grown
on
land
that
isn't
prime
agricultural
acreage.
In
other
words,
 they'll
be
grown
on
marginal
land
that
isn't
growing
a
commercial
crop
right
now.


Cellulosic ethanol require less land than corn ethanol.
David J. Hayes, a partner at Latham & Watkins, is a senior fellow at the Progressive Policy Institute. Roger Ballentine, a PPI senior fellow, is president of Green Strategies, Inc. Jan Mazurek is director of PPI's Energy & Environment Project, “Harvesting Fuels,” Progressive Policy Institute, Blueprint Magazine,http://www.ppionline.org/ppi_ci.cfm?contentid=254273&knlgAreaID=116&subsecid=153, 4/23/07 Given all this, proponents' enthusiasm about biofuels is certainly warranted. But policymakers should temper their expectations with two important caveats that have a direct bearing on how government initiatives should be designed. First, there is a natural limit to the amount of corn that U.S. farmers can grow to make the most common type of ethanol in production in America today. At best, it is estimated that the United States can produce about 14 billion gallons of biofuels from corn without seriously disrupting feed and food markets. That is less than 10 percent of its current annual motor fuel needs.

The real promise of the alternative fuel revolution will be realized when the next generation of cellulosic biofuels can be brought to market cost-effectively. Cellulosic biofuels are functionally identical, from a driver's point of view, to the current generation of biofuels made from corn and sugarcane. But they can be produced from the leftover, inedible parts of food crops, wild grasses, and trees -- which require less fertilizer, water, and energy to grow and harvest than agricultural crops.

Switchgrass Grows on non farmable land
<David Biello, Scientific American writer, “Grass Makes Better Ethanol than Corn Does”, January 8, 2008>

The use of native prairie grasses is meant to avoid some of the other risks associated with biofuels such as reduced diversity of local animal life and displacing food crops with fuel crops. "This is an energy crop that can be grown on marginal land," Vogel argues, such as the more than 35 million acres (14.2 million hectares) of marginal land that farmers are currently paid not to plant under the terms of USDA's Conservation Reserve Program.

Page 124 of 139

Miami inst.
Cellulosic Ethanol Good – Economically Viable
Corn ethanol increases price of gasoline – switchgrass and other cellulosic blends better.

ABJ


Colin
A.
Carter,
a
professor
of
agricultural
and
resource
economics
at
the
University
of
California
at
Davis,
Henry
I.
Miller,
physician
 and
fellow
at
Stanford
University's
Hoover
Institution,
“Drunk
on
Ethanol,”The
Washington
 Times,http://washingtontimes.com/news/2007/may/24/20070524‐083912‐6259r/,
5/27/07
 Politicians like to say ethanol is environmentally friendly, but these claims must be put into perspective. Although corn is a renewable resource, it has a far lower energy yield relative to the energy used to produce it than either biodiesel (such as soybean oil) or ethanol from many other plants. Moreover, ethanol yields about 30 percent less energy per gallon than gasoline, so mileage per gallon in internal combustion engines drops significantly. Finally, adding ethanol raises the price of blended fuel because it is more expensive to transport and handle. Lower-cost biomass ethanol -- for example, from rice straw (a byproduct of harvesting rice) or switchgrass -- would make far more economic sense, but large volumes of ethanol from biomass will not be commercially viable for many years. (And production will be delayed by government policies that specifically encourage corn-based ethanol with subsidies.)

Cellulosic ethanol is more economically viable and competitive
Brent
D.
Yacobucci,
Specialist
in
Energy
and
Environmental
Policy,
Resources,
Science,
and
Industry
Division,
“Fuel
 Ethanol:
Background
and
Public
Policy
Issues,”
3/28/2008,
http://www.nationalaglawcenter.org/assets/crs/RL33290.pdf
 A
key
barrier
to
ethanol’s
expanded
role
in
U.S.
fuel
consumption
is
its
price
differential
with
gasoline.
Since
a
major
part
 of
the
total
production
cost
is
the
cost
of
feedstock,
reducing
feedstock
costs
could
lead
to
lower
wholesale
ethanol
 costs.
For
this
reason,
there
is
a
great
deal
of
interest
in
producing
ethanol
from
cellulosic
feedstocks.
Cellulosic
 materials
include
low‐value
waste
products
such
as
recycled
paper
and
rice
hulls,
or
dedicated
fuel
crops,
such
as
 switchgrass32
and
fast‐growing
trees.
A
dedicated
fuel
crop
would
be
grown
and
harvested
solely
for
the
purpose
of
fuel
 production.
However,
as
the
name
indicates,
cellulosic
feedstocks
are
high
in
cellulose.
Cellulose
forms
a
majority
of
 plant
matter,
but
it
is
generally
fibrous
and
cannot
be
directly
fermented.33
It
must
first
be
broken
down
into
simpler
 molecules,
which
is
currently
expensive.
A
2000
study
by
USDA
and
the
National
Renewable
Energy
Laboratory
(NREL)
 estimated
a
70%
increase
in
production
costs
with
large‐scale
ethanol
production
from
cellulosic
biomass
compared
 with
ethanol
produced
from
corn.34
Therefore,
federal
research
has
focused
on
both
reducing
the
process
costs
for
 cellulosic
ethanol
and
improving
the
availability
of
cellulosic
feedstocks.
The
Natural
Resources
Defense
Council
 estimates
that
with
mature
technology,
advanced
ethanol
production
facilities
could
produce
significant
amounts
of
fuel
 at
$0.59
to
$0.91
per
gallon
(before
taxes)
by
2012,
a
price
that
is
competitive
with
Energy
Information
Administration
 (EIA)
projections
for
gasoline
prices
in
2012.35



Page 125 of 139

Miami inst.
Cellulosic Ethanol Good – Efficient
Cellulosic Ethanol cheaper than gas and Corn Ethanol

ABJ

<Chuck
Tannert,
columnist
Popular
Mechanics,
“Ethanol
Makes
a
Mini
Comeback:
Live
at
the
2008
Detroit
Auto
Show,
 January
16,2008>.
 But
there’s
a
silver
lining
to
this
rather
gray
outlook
(besides
the
new
biofuel
rides
described
in
our
slide
show
below
and
 throughout
the
show):
Coskata,
a
startup
biofuel
company,
has
developed
a
new
cellulosic
process
that
can
make
 ethanol
from
almost
any
carbon‐rich
source—including
old
tires—for
less
than
$1
a
gallon.
That
would
be
about
half
as
 much
as
making
gasoline,
and
much
cheaper
than
other
next‐generation
biofuels.
And
that’s
what
got
General
Motors
 to
invest
bigtime.

 The
Coskata
process
relies
on
gasification
and
patented
microorganisms.
The
three‐step
conversion
process
turns
 virtually
any
carbon‐based
feedstock—including
biomass,
municipal
solid
waste
and
a
variety
of
agricultural
waste—into
 ethanol,
making
production
a
possibility
in
almost
any
geography.
The
technology
is
ethanol‐specific
and
enzyme
 independent,
requiring
no
additional
chemicals
or
pre‐treatments.
 Why
is
all
of
this
so
promising?
It
means
cheap
fuel
that
will
be
readily
available
to
the
American
public
because
the
 infrastructure
is
already
in
place.
There’s
a
fuel
station
on
almost
every
corner
here
in
the
States.
Since
the
distribution
 chain
for
gas
and
ethanol
are
the
same,
the
infrastructure
to
sell
it
are
already
in
place—unlike,
say,
hydrogen.


Switchgrass has a positive energy balance
<M. R. Schmer et al, K. P. Vogel, R. B. Mitchell, and R. K. Perrin, U.S. Department of Agriculture–Agricultural Research Service, University of Nebraska, “Net Energy of Cellulosic Ethanol From Switchgrass”, January 15, 2008> Perennial herbaceous plants such as switchgrass (Panicum virgatum L.) are being evaluated as cellulosic bioenergy crops. Two major concerns have been the net energy efficiency and economic feasibility of switchgrass and similar crops. All previous energy analyses have been based on data from research plots (<5m2) and estimated inputs. We managed switchgrass as a biomass energy crop in field trials of 3–9 ha (1 ha 10,000m2) on marginal cropland on 10 farms across a wide precipitation and temperature gradient in the midcontinental U.S. to determine net energy and economic costs based on known farm inputs and harvested yields. In this report, we summarize the agricultural energy input costs, biomass yield, estimated ethanol output, greenhouse gas emissions, and net energy results. Annual biomass yields of established fields averaged 5.2 -11.1 Mg ha 1 with a resulting average estimated net energy yield (NEY) of 60. Switchgrass produced 540% more renewable than nonrenewable energy consumed. Switchgrass monocultures managed for high yield produced 93% more biomass yield and an equivalent estimated NEY than previous estimates from human-made prairies that received low agricultural inputs. Estimated average greenhouse gas (GHG) emissions from cellulosic ethanol derived from switchgrass were 94% lower than estimated GHG from gasoline. This is a baseline study that represents the genetic material and agronomic technology available for switchgrass production in 2000 and 2001, when the fields were planted. Improved genetics and agronomics may further enhance energy sustainability and biofuel yield of switchgrass.

Page 126 of 139

Miami inst.
Cellulosic Ethanol Good – Efficient Cellulosic ethanol is better than sugar and corn based ethanol

ABJ

<L.
Leon
Geyer,
Professor,
Virginia
Tech,
Department
of
Agricultural
and
Applied
Economics,
Phillip
Chong,
Research
 Assistant,
Virginia
Tech,
Department
of
Agricultural
and
Applied
Economics
and
Bill
Hxue
Research
Associate,
Virginia
 Tech,
Department
of
Agricultural
and
Applied
Economics,
12
Drake
J.
Agric.
L.
61,
2007,
Lexis.>



 While
corn
is
currently
the
primary
source
of
ethanol,
it
is
possible
that
more
efficient
sources
of
energy
may
be
 developed.
For
example,
switchgrass,
also
called
tall
panic
grass,
is
a
warm‐season
plant
that
is
thought
by
many
experts
 as
the
ideal
alternative
to
corn
for
cellulosic
ethanol
production.
In
the
2006
State
of
the
Union
Address,
President
Bush
 pressed
the
need
for
"research
in
cutting‐edge
methods
of
producing
ethanol,
not
just
form
corn,
but
from
.
.
.
switch
 grass.
Preliminary
research
by
USDA
scientists
has
found
that
switchgrass
has
an
energy
output/input
ratio
more
than
 3.5
times
greater
than
corn
ethanol.
n92
Similarly,
sugar
feedstock
such
as
sugar
cane
and
sugar
beets
offer
"more
 efficient"
alternatives
to
corn
based
ethanol.
n93
According
to
scientific
data
reported
by
Larry
Rohter,
Brazil's
sugar
cane
 ethanol
yields
nearly
eight
times
as
much
energy
as
corn‐based
options.
n94
 Aside
from
corn,
sugar,
and
switchgrass
based
ethanol,
cellulosic
ethanol
is
another
type
of
ethanol
derived
from
 biomass
which
"refers
to
a
wide
variety
of
plentiful
materials
obtained
from
plants
‐‐
including
certain
forest‐related
 resources
.
.
.
,
many
types
of
solid
wood
waste
materials,
and
certain
agricultural

[*74]

wastes
(including
corn
stover)
‐‐
 as
well
as
plants
that
are
specifically
grown
as
fuel
for
generating
electricity."

Cellulosic
ethanol
may
be
seven
to
eight
 times
more
efficient
in
respect
to
corn‐based
ethanol's
net
energy
balance
ratio.
n96
Y.H.
Percival
Zhang
of
Virginia
Tech
 stated
that
"if
we
want
to
produce
30
to
60
billion
gallons
of
ethanol,
which
is
what
is
needed
to
meet
the
President's
 goal,
we
have
to
use
the
entire
plant,
or
the
stover
(leaves,
stalks,
and
cobs)."
n97
The
technology
necessary
to
utilize
the
 entire
plant
lies
in
cellulosic
ethanol
and
requires
the
"technologies
that
can
break
the
cellulose
into
the
sugars
that
are
 distilled
to
produce
ethanol."
n98
Unfortunately,
at
this
point
in
time,
such
technologies
are
not
economically
viable
 alternatives.
 
 
 


Page 127 of 139

Miami inst.
Cellulosic Ethanol Good – Feasible
Cellulosic ethanol is feasible – infrastructure exists

ABJ

Roger
A.
Sedjo,
Resources
for
the
Future,
6/13/2008,
“Biofuels:
Think
Outside
the
Cornfield,”
Science
Vol.
320.
no.
5882,
 pp.
1420
‐
1421
 One
example
is
switchgrass,
which
grows
well
on
marginal
lands
that
are
not
well
suited
to
corn
or
many
other
grains
 (2).
Switchgrass
would
have
another
advantage:
It
is
a
self‐seeding
crop,
which
means
farmers
would
not
have
to
plant
 and
reseed
after
harvesting.

Another
alternative
biofuel
feedstock
is
wood
from
sustainably
managed
forests,
which
are
 common
in
much
of
the
world
today.
These
forests,
managed
for
growth
and
renewability,
are
an
increasing
source
of
 traditional
industrial
wood
(3).
As
with
grasses,
trees
can
grow
readily
on
land
unsuitable
for
corn
and
grains.
 Furthermore,
the
wood
is
drawn
from
the
incremental
growth
of
a
forest,
thereby
leaving
the
basic
forest
system
and
its
 carbon
intact.
Wood
feedstock
could
be
drawn
from
existing
sources
or
from
additional
forests
planted
on
marginal
 agricultural
land
without
compromising
the
basic
sustainable
forest
system,
releasing
substantial
volumes
of
carbon,
or
 utilizing
high‐quality
crop
lands
(4).
Moreover,
infrastructure
systems
are
currently
in
place,
allowing
wood
to
be
 harvested
and
transported.

Unlike
corn
and
most
grains,
studies
show
that
biofuels
from
grasses
and
wood
have
large
 net
GHG
gas
savings.
Indeed,
grasses
and
trees
enhance
the
ability
of
land
to
capture
carbon
through
biomass
and
soils
 (5).



Cellulose is more efficient and cleaner – we’re on the verge of developing the necessary technology
Runge
and
Senauer
2007,
C.
Ford
Runge
is
Distinguished
McKnight
University
Professor
of
Applied
Economics
and
Law
 and
Director
of
the
Center
for
International
Food
and
Agricultural
Policy
at
the
University
of
Minnesota.
Benjamin
 Senauer
is
Professor
of
Applied
Economics
and
Co‐director
of
the
Food
Industry
Center
at
the
University
of
Minnesota,
 May/June
2007,
“How
Biofuels
Could
Starve
the
Poor,”
Foreign
Affiars,
Vol.
86,
Issue
3,
Ebsco
 The
benefits
of
biofuels
are
greater
when
plants
other
than
corn
or
oils
from
sources
other
than
soybeans
are
used.
 Ethanol
made
entirely
from
cellulose
(which
is
found
in
trees,
grasses,
and
other
plants)
has
an
energy
ratio
between
5
 and
6
and
emits
82
to
85
percent
less
greenhouse
gases
than
does
gasoline.
As
corn
grows
scarcer
and
more
expensive,
 many
are
betting
that
the
ethanol
industry
will
increasingly
turn
to
grasses,
trees,
and
residues
from
field
crops,
such
as
 wheat
and
rice
straw
and
cornstalks.
Grasses
and
trees
can
be
grown
on
land
poorly
suited
to
food
crops
or
in
climates
 hostile
to
corn
and
soybeans.
Recent
breakthroughs
in
enzyme
and
gasification
technologies
have
made
it
easier
to
 break
down
cellulose
in
woody
plants
and
straw.
Field
experiments
suggest
that
grassland
perennials
could
become
a
 promising
source
of
biofuel
in
the
future.


Page 128 of 139

Miami inst.
Solvency: Market diffusion

ABJ

<Eggert.
Anthony,
Principal
Researcher,
2007,
Transportation
Biofuels
in
the
U.S.:
A
Preliminary
Innovation
Systems
 Analysis,
pg
13‐14>
 “Besides offering R&D and direct market support through incentives and subsidies, the government can also promote diffusion by acting as a large user of new technologies or products. In the case of biofuels, the government can act to promote certain types of production processes and technologies by procuring fuels that use those technologies. I2. Firm entry/activity A strong factor for the development and diffusion of new technologies is the entry of new firms and the expansion of existing firms into the area of interest. Firm entry often brings with it new ideas and experience (F1), new resources (F2), and can help enable the connection to and growth of new markets (F4, F5) and information networks. New firms will also contribute to the support for favorable policy (I1) treatment through lobbying. The modern biofuels industry had been, until recently, dominated by a relatively small number of large companies. This is no longer the case. Due to the rapid growth in the demand for ethanol many new firms have entered the market, such that by October of 2006, there were 90 different firms producing ethanol alone, up from 75 in 2005, and this number is expected to grow to 110 by the end of 2007 [18]. Such rapid growth in firm entry and activity is not without its risks, especially if it results in an oversupply of product to the emerging market. When this occurs, prices will drop and it will be those firms which have the lowest costs and/or largest cash reserves that will likely survive the shakeout. Such ‘creative destruction’ as it is sometimes called, can be a good thing for the system, especially if it helps to select for good design (and weed out the bad) and management practices. I3. Feedback from market formation Feedback from market formation occurs as the market expands to include more actors and a larger customer base and includes increasing returns to scale (reduced costs), increasing legitimacy of the technologies. For biofuels this feedback can take the form reduced capital and variable costs through learning, increased external economies and network effects (e.g. associated biofuel distribution infrastructures), and increased confidence in the technology.”

Page 129 of 139

Miami inst.
AT: Cellulose Ethanol Hurts Environment
Switchgrass reduces agricultural impacts.

ABJ

Nathanael
Greene,Senior
Policy
Analyst
at
the
Natural
Resources
Defense
Council,
et
al,“Growing
Energy:
How
Biofuels
Can
Help
 End
America’s
Dependence
on
Oil,”Natural
Resources
Defense
Council,
Dec.
2004
 In
addition
to
energy
and
global
warming
pollution,
agriculture
can
have
a
profoundly
positive
or
negative
impact
on
soil


quality,
water
quality,
water
use,
habitat,
and
land‐use.
There
are
crops
and
management
practices
that
yield
very
 large
amounts
of
biomass
per
acre
while
dramatically
reducing
the
environmental
footprint
of
agriculture.
For
 instances,
switchgrass
is
a
native
perennial
prairie
grass.
It
does
not
need
irrigation,
requires
less
fertilizers
and
pesticides
 than
traditional
row
crops,
and
provides
a
better
habitat
for
wildlife.

As
a
perennial
grass,
it
is
mowed
annually
and
thus
 there
is
no
tillage,
which
reduces
soil
erosion.
Finally
and
counter
intuitively,
it
actually
sequesters
more
carbon
annually
 when
it
is
harvested
than
when
it
is
simply
let
to
grow.


Page 130 of 139

Miami inst.
Cellulose EthanolBiotech
Cellulose ethanol causes biotech revolution

ABJ

Jeff
Goodell,
contributing
editor
at
Rolling
Stone
and
a
frequent
contributor
to
the
New
York
Times
Magazine,
8/9/2007,
 “The
Ethanol
Scam:
One
of
America's
Biggest
Political
Boondoggles,”
 http://www.rollingstone.com/politics/story/15635751/the_ethanol_scam_one_of_americas_biggest_political_boondog gles/3
 Khosla
is
even
higher
on
the
prospects
for
cellulosic
ethanol,
a
biofuel
that
can
be
made
from
almost
any
plant
matter,
 including
wood
waste
and
perennial
grasses
like
miscanthus
and
switchgrass.
Like
other
high‐tech
ethanol
evangelists,
 Khosla
imagines
a
future
in
which
such
so‐called
"energy
crops"
are
fed
into
giant
refineries
that
use
genetically
 engineered
enzymes
to
break
down
the
cellulose
in
plants
and
create
fuel
for
a
fraction
of
the
cost
of
today's
gasoline.
 Among
other
virtues,
cellulosic
ethanol
would
not
cut
into
the
global
food
supply
(nobody
eats
miscanthus
or
 switchgrass),
and
it
could
significantly
cut
global‐warming
pollution.
Even
more
important,
it
could
provide
a
gateway
to
 a
much
larger
biotech
revolution,
including
synthetic
microbes
that
could
one
day
be
engineered
to
gobble
up
carbon
 dioxide
or
other
pollutants.


Page 131 of 139

Miami inst.
Oil Dependence Bad
Increasing dependence of oil is bad – harms the economy and discourages political reform

ABJ

<L.
 Leon
 Geyer,
 Professor,
 Virginia
 Tech,
 Department
 of
 Agricultural
 and
 Applied
 Economics,
 Phillip
 Chong,
 Research
 Assistant,
 Virginia
 Tech,
 Department
 of
 Agricultural
 and
 Applied
 Economics
 and
 Bill
 Hxue
 Research
 Associate,
 Virginia
 Tech,
Department
of
Agricultural
and
Applied
Economics,
12
Drake
J.
Agric.
L.
61,
2007,
Lexis.>

 Expressing
his
outlook
on
energy
that
was
widely
shared
by
the
automotive
industry
nearly
eighty
years
ago,
the
future
 that
Henry
Ford
predicted
remains
a
future
for
our
generation.
Diminishing
worldwide
petroleum
reserves
coupled
with
 growing
demand
from
China,
India,
Brazil
and
other
nations
has
created
a
precarious
situation
in
regards
to
energy
 procurement.
In
the
United
States,
40.1%
of
total
energy
consumption
comes
from
petroleum,
22.9%
from

[*62]

coal,
 22.6%
from
natural
gas,
8.1%
from
nuclear
electric
power,
and
6.1%
from
renewable
energy.
n2
The
American
 dependency
on
petroleum
is
clearly
illustrated
by
the
fact
that
it
constitutes
the
largest
source
of
energy
consumption.
 With
7.5
billion
barrels
of
oil
used
by
Americans
in
2006,
petroleum's
ability
to
fuel
automobiles
and
heat
homes
has
 placed
it
in
a
category
of
necessary
goods
joined
by
food,
water,
and
shelter.
n3
What
complicates
the
energy
situation
in
 the
United
States
is
two‐fold
in
nature.
First,
natural
resource
energy
is
finite.
Second,
there
is
an
imbalance
of
oil
stocks
 and
reserves
due
to
geological
circumstances
beyond
control.
According
to
the
Energy
Information
Agency,
an
estimated
 1.32
trillion
barrels
of
oil
are
left
in
the
world;
n4
and
only
1.6%
of
that
amount
resides
in
the
United
States.
n5
More
 significantly,
of
the
1.32
trillion
barrels
of
oil,
6%
is
in
Venezuela,
n6
8.7%
is
in
Iraq,
n7
10.3%
is
in
Iran,
n8
and
19.9%
is
in
 Saudi
Arabia.
n9
This
petroleum
imbalance
has
created
a
world
where
the
use
of
energy
as
an
overt
weapon
is
no
longer
 a
theoretical
threat
of
the
future,
but
happening
now.
The
2007
State
of
the
Union
address
by
President
George
W.
Bush
 expressed
America's
dependence
on
foreign
oil
and
the
fact
that
it
"leaves
us
America
more
vulnerable
to
hostile
 regimes,
and
to
terrorists
‐
who
could
cause
huge
disruptions
of
oil
shipments,
and
raise
the
price
of
oil,
and
do
great
 harm
to
our
economy."
n10
This
geo‐political
situation
has
allowed
regimes
such
as
Iran,
Saudi
Arabia,
and
Venezuela
to
 avoid
democratic
reforms
and
insulate
themselves
from
international
and
domestic
pressures.
Furthermore,
as
Thomas
 Friedman
states,
"it
has
fostered
a
counterwave
‐
a
new
wave
of
authoritarian
leaders
who
are
not
only
able
to
 ensconce
themselves
in
power
because
of
huge
oil
profits
but
also
to
use
their
oil
wealth
to
poison
the
global
[political
 and
economic]
system."



Page 132 of 139

Miami inst.
AT: High Oil Prices Solve AE
The Status Quo will not drive alternative energy funding and Research

ABJ

<Richard Heinberg, faculty of New College of California, “The Consequences of Oil Dependency”, The Santa Rosa Press Democrat, October 6, 2004>.

Economists tell us that higher oil prices will stimulate investment in energy alternatives. However, the prospects for a painless market-driven transition away from fossil fuels are hardly encouraging. Globally, trillions of dollars will have to be spent on research and on new infrastructureÑtens or hundreds of billions per year, starting immediately. We are not seeing anything like that level of investment now; we have to assume that it will begin after the global oil peak (that is, after an obvious price signal making alternatives more attractive). But then, with less energy available to fuel the economy, we will have trouble simply maintaining basic services. There won’t be any surplus to jumpstart the new energy infrastructure, which will take decades to build. 
 


Page 133 of 139

Miami inst.
Solvency – Incentives

ABJ

Government needs to increase incentives for cellulose ethanol – current approach is biased towards corn ethanol
Jim
Giles,
New
Scientist,
8/18/2007,
“Can
biofuels
rescue
America's
praries?”
Vol.
195,
Issue
2617,
Ebsco
 The
biggest
obstacles
may
be
political,
however.
For
grass
cultivation
to
really
take
off,
government
incentives
will
be
 needed
to
build
new
facilities
for
large‐scale
processing
of
cellulose
and
to
rival
the
generous
subsidies
currently
paid
to
 corn
growers.
Yet
the
powerful
agricultural
lobby
is
doing
all
it
can
to
get
politicians
to
focus
on
corn
ethanol,
which
 promises
more
immediate
gains
for
farmers.
Roger
Samson,
a
specialist
in
biofuels
policy
at
Resource
Efficient
 Agricultural
Production
Canada,
a
not‐for‐profit
organisation
based
in
St
Anne
de
Bellevue,
believes
corn
ethanol
is
the
 wrong
approach.
"If
this
is
a
horse
race,
the
US
government
has
bet
on
a
donkey,"
he
says.



Incentives are key to investment and success of cellulosic ethanol
Rajagopal
et
al
2007,
D
Rajagopal,
Energy
and
Resources
Group,
University
of
California
at
Berkeley,
S
E
Sexton,
D
 Roland‐Holst,
and
D
Zilberman,
Department
of
Agricultural
and
Resource
Economics,
University
of
California
at
Berkeley
 and
Zilberman
is
a
Member
of
Giannini
Foundation,
“Challenge
of
biofuel:
filling
the
tank
without
emptying
the
 stomach?”
11/30/2007,
http://www.iop.org/EJ/article/1748‐9326/2/4/044004/erl7_4_044004.html
 Third,
farmer
adoption
of
specialized
crops
like
perennial
grasses
will
depend
on
whether
they
have
a
contract
or
a
 market
for
their
product.
This,
in
turn,
depends
on
decisions
to
invest
in
processing
capacity.
The
adoption
of
biofuels,
 therefore,
is
a
two‐step
dance:
industry
must
take
the
lead,
and
farmers
will
follow.
But
investments
in
processing
 capacity
require
long‐term
commitments
to
biofuels
which
may
demand
government
incentives.
While
subsidies
are
 necessary
to
minimize
risk
for
investors,
they
are
currently
rigid
and
not
linked
to
oil
price,
the
impact
on
energy
 security,
or
environmental
impacts
(Koplow
2006).
Incentives
in
the
future
should
be
dynamic
and
flexible
so
as
to
adapt
 to
changing
economic,
political
and
environmental
conditions.
Agricultural
and
energy
policy
must
be
integrated.
In
 particular,
whereas
agricultural
policy
has
traditionally
aimed
to
restrict
supply
to
reduce
downward
pressure
on
 commodity
prices,
an
era
of
biofuels
demands
increased
supply
of
certain
crops.
Policy,
therefore,
will
need
to
change
to
 enhance
supply.
Biofuels
can
serve
to
reduce
the
taxpayer
burden
by
eliminating
deficiency
payments
to
farmers.


Page 134 of 139

Miami inst.
Solvency – Cellulose/Corn Combo
Limited corn ethanol production is OK – it’s dangerous in excess

ABJ

Byron
King,
Peak
oil
correspondent
at
Whiskey
&
Gunpowder
(Macroeconomic
E‐Newsletter),
1/11/2007,
“Investing
in
 Ethanol,”
http://www.whiskeyandgunpowder.com/Archives/2007/20070111.html
 Maybe
there
is
a
better
idea
out
there
for
making
ethanol
from
cellulose
waste
products.
And
it
is
not
as
if
a
diversity
of
 energy
resources
is
ever
a
bad
idea.
So
some
production
of
ethanol
from
corn
makes
sense.
But
sometimes,
just
 because
something
is
a
good
idea,
it
does
not
necessarily
follow
that
more
of
it
is
a
better
idea.
It
is
the
same
thing
with
 corn‐based
ethanol.
Pro‐ethanol
agricultural,
industrial,
transportation,
and
tax
policies
will
not
provide
the
country
with
 anything
like
the
volumes
of
motor
fuel
that
it
needs
to
run
the
existing
transportation
grid.
And
manufacturing
ethanol
 from
corn
will
dramatically
disrupt
the
U.S.
food
supply.
Eventually,
the
nation
will
reap
what
it
sows.


Second generation biofuels good, but we should continue producing first generation ones
Dan
Arvizu,
National
Renewable
Energy
Laboratory,
U.S.
Department
of
Energy,
6/13/2008,
“Biofuels:
Too
Soon
to
Give
 Up,”
Science
Vol.
320.
no.
5882,
pp.
1419
‐
1420
 There
is
significant
potential
for
second‐generation
biofuels
to
reduce
carbon
emissions
when
compared
to
first‐ generation
biofuels
technologies.
However,
the
challenge
to
our
nation
in
reducing
our
dependence
on
foreign
oil
is
too
 great
to
abandon
first‐generation
technology
for
fear
of
unintended
consequences;
instead,
we
must
learn
from
 comprehensive
life‐cycle
analyses
how
to
avoid
those
consequences
as
the
biofuels
market
evolves.


Page 135 of 139

Miami inst.
Solvency – Banning Biofuels
Biofuels driving rising food prices – a ban would solve the problem
Missy
Ryan,
Reuters,
Planet
Ark,
“Biofuels
Halt
Would
Ease
Food
Prices,”
4/30/2008,
 http://www.planetark.com/dailynewsstory.cfm/newsid/48157/story.htm


ABJ

A
moratorium
on
global
grain‐
and
oilseed‐based
biofuels
would
help
ease
raging
wheat
and
corn
prices
by
up
to
20
 percent
in
the
next
few
years,
a
leading
agriculture
research
group
said
on
Tuesday.
"Our
models
analysis
suggest
that
if
 a
moratorium
on
biofuels
would
be
issued
in
2008,
we
could
expect
a
price
decline
of
maize
by
about
20
percent
and
for
 wheat
by
about
10
percent
in
2009‐10.
So
it's
this
significant,"
Joachim
von
Braun,
who
heads
the
International
Food
 Policy
Research
Institute
(IFPRI),
told
reporters
in
a
briefing.
"There
are
biofuels
and
there
are
biofuels,
good
and
bad
 ones
...
waste‐based
and
sugarcane‐based
can
be
very
good,"
von
Braun
said.
The
role
of
burgeoning
biofuel
production,
 which
diverts
food
crops
like
corn
to
make
ethanol,
has
become
a
sharply
divisive
issue
in
the
United
States
and
 elsewhere
as
the
world
grapples
with
a
dramatic
shock
in
food
prices.
The
soaring
cost
of
basic
staples
like
milk
and
 bread
has
sparked
unrest
and
deepened
political
instability
in
many
corners
of
the
developing
world.



Page 136 of 139

Miami inst.
Solvency – Free Market
Should return to the free market on ethanol

ABJ

Ben
Lieberman
is
Senior
Policy
Analyst
for
Energy
and
Environment
and
Nicolas
Loris
is
a
Research
Assistant
in
the
 Thomas
A.
Roe
Institute
for
Economic
Policy
Studies
at
The
Heritage
Foundation,
5/15/2008,
“Time
to
Repeal
the
 Ethanol
Mandate,”
http://www.heritage.org/RESEARCH/ENERGYANDENVIRONMENT/WM1925.CFM
 Though
intended
to
help
consumers
and
reduce
greenhouse
gas
emissions,
the
ethanol
mandate
has
done
just
the
 opposite,
contributing
to
high
food
and
gas
prices
with
little
environmental
benefit.
Representative
Jeff
Flake
(R–AZ)
has
 introduced
H.R.
5911,
the
Remove
Incentives
for
Producing
Ethanol
Act
of
2008,
which
would
eliminate
the
mandate
 and
other
benefits
for
ethanol,
and
other
measures
may
soon
be
introduced.

A
return
to
a
free
market
for
ethanol
 would
be
a
welcome
step.
Congress
should
eliminate
the
ethanol
mandate,
ethanol‐related
tax
breaks,
and
protectionist
 tariffs
that
keep
out
potentially
cheaper
foreign
supplies.

 
 
 


Page 137 of 139

Miami inst.
Free Market – AT: Ethanol good
The market solves these arguments

ABJ

Ben
Lieberman
is
Senior
Policy
Analyst
for
Energy
and
Environment
and
Nicolas
Loris
is
a
Research
Assistant
in
the
 Thomas
A.
Roe
Institute
for
Economic
Policy
Studies
at
The
Heritage
Foundation,
5/15/2008,
“Time
to
Repeal
the
 Ethanol
Mandate,”
http://www.heritage.org/RESEARCH/ENERGYANDENVIRONMENT/WM1925.CFM
 It
should
be
noted
that
there
is
little
to
no
downside
risk
in
repealing
the
ethanol
mandate,
as
well
as
the
generous
tax
 credits
and
protectionist
tariffs
that
also
tilt
the
playing
field
in
favor
of
corn
ethanol
use.
To
the
extent
that
there
is
a
 valid
economic
case
for
fuel
ethanol,
it
will
continue
to
be
used
even
in
the
absence
of
government
dictates
and
 incentives.

The
lesson
seems
clear:
The
consequences
of
the
ethanol
mandate
have
had
detrimental
effects
on
both
the
 economy
and
the
environment.
Congress
should
take
a
hard,
honest
look
at
America's
ethanol
policy,
and
the
mandate
 should
be
repealed,
along
with
the
tax
breaks
and
protectionist
tariffs.



Page 138 of 139

Miami inst.

ABJ

Page 139 of 139

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