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Tuesday, March 01, 2011

Ensuring political stability
Taking the pressure off food prices


With all the worries over oil supply the last couple of weeks, and no sign of abatement in the changing world geo-political situation forthcoming, the one big question that is being asked is 'How did it all start?'

The answer is simple really: Food prices.

Back in the initial run-up to record high oil prices during 2008, and again this year with increasing oil prices almost seeming the norm, some important food stuffs started to be spied as viable alternatives to the rising price of oil. Some of those important foods stuffs like wheat and corn were also seen as valuable additions to the petrochemical industry in their alternate form of ethanol. You just didn't have to sell your crop for food anymore. You could sell it to someone who would squeeze the cellulose fibre out if it, let it ferment, and make ethanol out of the mix.

The farmer thus became an important component in the petrochemical industry and the price for his, or her crop, went up.

With a huge demand for ethanol that is derived from wheat and corn, along with other fibrous foods, it could not be avoided on the part of farmers worldwide to sell their crops to the highest bidders after watching prices far outstrip what consumers were paying for basic consumption use. Rioting started when people went hungry and food became unaffordable.

No longer was wheat used for the basics like cereals and bread, it had now become of value in the petrochemical industry, filling a gargantuan hole in the additives and oxygenate markets. Human need was competing with Big Oil, and losing.

How do we fix the problem?

The other option
While attention has been given to high yield from various fibre crops like corn and wheat, very little attention has been paid to finding other viable forms of cellulose fibre.

With the forestry industries of Europe and North America at a standstill, and the age of the paper mill hanging in the balance, governments everywhere have yet to turn their eyes to the other renewable resources out there that can help provide that viable alternative fibre source to help in the manufacture of ethanol's close cousin, methanol. For North America and its displaced forestry industry, that answer may very well lie in the manufacture of methanol as the alternative oxygenate for the oil industry.

At the same time as putting people to work, the development of methanol can help take the pressure off wheat and corn prices, while at the same time, feeding the wolds hungry and helping fulfill the needs of the oil industry and environmentalists for cleaner burning fuels.

Perhaps it's both time for governments everywhere to look at the alternatives to ethanol use and, at the same time, ensure that food comes to those who need it most at the most affordable of prices.

Manufactured right here?
Newfoundland and Labrador can play an important role in the development of the methanol industry. With a paper mill closed and one in trouble, there is no doubt that there is a need to find an alternate use for mill fibre besides the traditional paper making role. Cellulose fibre from wood can be used in an experiment to study the viability of methanol manufacture from our Canadian wood sources. If the theory of making methanol from wood fibre is successful, we sit close to world routes for the export of the alternate oxygenate and we put people to work. In some small way, we contribute to feeding the world's hunger problem at the same time as satisfying the need of the petrochemical industry's need for a new oxygenate to ensure a cleaner burning fuel.

Perhaps it's time we ask the government to make use of the Brookfield Road forestry and agriculture facility and look at helping the world solve a problem that may be readily overcome.

Numbers
Here's what I have with six days out of seven reporting:
  • Heating and stove oils show "up" by 4.88 cents per litre.
  • Diesel is up by 5.4 cents per litre, and...
  • Gasoline is up by 4.9 cents.
I'll be back tonight with final numbers for Thursday!

Regards,

George

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