The Environmental Protection Agency isn’t just raising blood pressure and energy prices these days. Through its allegedly green energy demands, it’s raising food prices and, with them, international threats to the United States.
In 2011, the New England Complex Systems Institute drew a very strong connection between rocketing food prices and unrest in the less-developed world — particularly in the Middle East and North Africa, where the Arab Spring took place and Islamists now threaten to rule absolute.
And the connection makes sense. While a lot of different factors played into the revolutions that swept the region, one thing that really gets folks going is when they can’t afford to feed their wife and kids. But why were the food prices spiking? One major factor: ethanol mandates and subsidies.
These days, the government requires gasoline companies to blend their fuel so it is 10 percent ethanol — a fuel that, in the U.S., is made mostly with corn. Not only does this decrease the energy generated per gallon of gas (effectively jacking up the price), but it consumes a lot of corn: We’re talking 50 percent of all the corn that the United States grew in 2012; or enough to feed 570 million people that year. This, in turn, jacks up the price of corn. And since the year is 2013, and we live in a global market, when the price of corn rises in Chicago, it rises in Cairo.
Oh, and when the price of corn rises, products that use corn — cereal, chips, muffins, corn oil, animal feed, etc. — rise as well. The makers of these products also look for substitutes for corn, like soybeans, causing prices of those and other substitutes to rise. Hell, between corn-based animal feed and corn syrup, the price of most things starts to rise. SmarterFuelFuture.org — an effort by a group of industries opposed to the mandate — reported that in 2011, the price-hike for cereals, grains, meat, dairy and chicken was nearly 18 percent. This, they calculated, raised “food costs for [an American] family between $1,344 and $2,658 a year.” And while most American families can manage to tighten their belts and get by, in countries with price controls (like the ones in North Africa and the Middle East), the end result is that the foods simply don’t appear on the shelves.
Through a combination of the politicians and bureaucrats screwing up global markets (as they are wont to do) and price speculation (grain is a futures market), we’re looking at global food prices roughly doubling since the ethanol standards were passed in 2005. And folks are revolting.
Take a look at this chart of food prices and riots:
The food crises and political instability in North Africa and the Middle East. Graph by the New England Complex Systems Institute.
Now take a look at this chart of food prices and government ethanol mandates:
The food crises: A quantitative model of food prices including speculators and ethanol conversion. Graph by the New England Complex Systems Institute.
Well that’s quite a coincidence, we thought. But wouldn’t the hippies at the EPA cancel this program if it was contributing to chaos and disorder across the globe?
Nope: They say the law is written so that they can consider local, state and national concerns — not global ones — when deciding if they should waive the mandate.
But since when has the EPA let the law get in the way of what they do? Well, it turns out that they don’t even care much for local, state and national concerns under their jurisdiction: During the droughts last year, ten governors and a coalition of livestock, poultry and dairy farmers asked the EPA to waive the mandate, citing an increase in their feed prices following the combination of the mandate and the weather. The EPA said no to that too. “Our extensive analysis,” an EPA spokeswoman decreed during the sentencing, “makes clear that congressional requirements for a waiver have not been met and that waiving the Renewable Fuel Standard will have little, if any, impact.”
And speaking of impact, the whole point of this folly is to pave the way for a new, greener fuel they imagine might be out there but has yet to be discovered. (And on Jan. 25, the D.C. Circuit Court of Appeals actually had to rule that the EPA can’t mandate fuels that don’t exist yet.)
But surely these mandates are at least a good influence on Americans’ carbon footprints?
Turns out, only 1 percent of U.S. energy comes from ethanol, and since the ratio required to make ethanol is 1:1 fossil fuels to corn, when all is said and done, the New England Complex Systems Institute calculates that “the amount of fossil fuel saved by ethanol is only about 0.2 percent of the U.S. energy requirements.” This means that for all the regulation, work, spending and adverse effects, the policy is essentially accomplishing nothing it was intended to accomplish. (But it is accomplishing a whole lot of other things.)
So what did we spend on all of these rising prices and security threats? Just over $20 billion since 2005. Yet still, the EPA trucks on. And it’s very likely that the worst is not over: Grain prices — and global food prices — are again beginning to surge again, and, assuredly, governments from Cairo to Guatemala City are threatened with imminent collapse.
Damn hippies.