OECD and FAO Not Friends of Ours

Chuck Zimmerman

OECDIf you’re not familiar with the Organization for Economic Co-operation (OECD) you probably will soon since they’ve released their “OECD-FAO Agricultural Outlook – 2007-2016” report and it’s already being quoted and used by the people who want to bash the development of biofuels, most especially ethanol. The report devotes quite a bit of misguided text to the subject of biofuels. Additionally, they’ve issued a background paper from their 20th meeting of the Round Table on Sustainable Development, held at the OECD on September 11-12 titled, “Biofuels – is the cure worse than the disease?” (pdf). It states, “The conclusion must be that the potential of the current technologies of choice — ethanol and biodiesel — to deliver a major contribution to the energy demands of the transport sector without compromising food prices and the environment is very limited.”

I’ve been to FAO headquarters and have followed them over the years. The United States is one of the biggest financial contributors to it but in my experience the organization seems to often go out of its way to criticize our country. This latest report consists of a serious amount of wild speculation using assumptions. For example, look at this section from the Outlook report:

This Outlook does not analyse the developments in the biofuels sector, but treats biofuel production through implicit and exogenous assumptions in a number of countries. In particular these include the US, the EU, Canada and China, while ethanol production in Brazil is an explicit part of the sugar baseline.

The US is assumed to substantially increase its ethanol production, which predominantly is based on domestic maize. Ethanol output and corresponding maize use is assumed to grow by almost 50% in2007, and while growth rates are assumed to decline thereafter, US ethanol production is still assumed to double between 2006 and 2016 (Figure1.2). This expansion would exceed the requirements stated in the Renewable Fuel Standard (RFS) by far. In consequence, maize use for fuel production, which has doubled from2003, would increase from some 55Mt or one-fifth of maize production in 2006 to 110Mt or 32% at the end of the projection period.

Bio-diesel production, in contrast, is assumed to remain relatively limited in the US, due to lower profitability caused by high feedstock costs. Soya oil use for bio-diesel production is expected to reach 2Mt in2007 and to further increase to 2.3Mt in2011, with no growth assumed for the remaining projection years.

You’ve got to love those “exogenous assumptions.” This makes me think back to one of my favorite college teachers, Mr. Frank Counts. He hammered into our heads that to assume is to make an “ass” of “u” and “me.” This whole report is based on assumptions rather than what I would consider credible science but since it’s such a liberal group the whackos with an anti-ethanol agenda are already quoting it like it’s gospel.

Take this twit who writes for ReportonBusiness.com who states, “A small army of scientists and environmentalists has warned for years that ethanol, especially of the corn-based variety so popular in North America, is, at best, misleading advertising, at worst, a crime against nature and taxpayers alike.” Army? More like a group of whackos with an agenda who cater to people like this guy.

Google around and you’ll find more like him. Domestic Fuel was started precisely to provide an online source for news and information on the subject of renewable fuels which points you to what’s really going on in the industry and especially the credible work that’s being done to solve our energy problems. There’s a lot of emotional propaganda floating around the press on this issue and these reports are going to fuel their fire I’m sure.

Biodiesel, Ethanol, International, News