Photo Credit jurvetson

The Guardian revealed today that it has obtained a World Bank report claiming that biofuels are responsible for 75% of the recent surge in food prices – far more than was previously thought.

Rising food prices have pushed 100m people worldwide below the poverty line, estimates the World Bank, and have sparked riots from Bangladesh to Egypt.

The report was being withheld, it seems to avoid embarrassing President Bush because it directly contradicts his claims that plant-derived fuels contribute less than 3% to food-price rises.

The report author, Don Mitchell, is an internationally-respected senior economist at the World Bank and has done a detailed, month-by-month analysis of the surge in food prices. This approach allows for a much closer examination of the link between biofuels and food supply than was possible in previous reports.

Dr Mitchell’s report

argues that production of biofuels has distorted food markets in three main ways. First, it has diverted grain away from food for fuel, with over a third of US corn now used to produce ethanol and about half of vegetable oils in the EU going towards the production of biodiesel. Second, farmers have been encouraged to set land aside for biofuel production. Third, it has sparked financial speculation in grains, driving prices up higher.

However, the news on biofuels isn’t all bad. There are some biofuels which don’t cause massive food price increases, and while I’m not a huge fan of biofuels (burning them produces CO2 still, don’t forget), they are a renewable resource.

They have, in the case of algae for example, the potential to be used in large-scale carbon sequestration projects. Large vats of algae could have the exhaust from power plants bubbled through them. The algae would feed on the CO2 and along with light convert the carbon into biofuel – recycling the carbon if you will.

Long term we need to get off the carbon economy but algal biofuels (which are not produced on viable farmland) look like a reasonable short-term way of reducing our CO2 emissions.

Photo Credit Future-PhD

Chris Morrisson has a post on the VentureBeat blog extolling a heavily self-funded startup called Algenol Biofuels which is using algae to produce ethanol for use as a fuel.

The company is about to build a refinery in Mexico to produce:

a jaw-dropping billion gallons a year of ethanol by the end of 2012

In the article he mentions two other algal biofuel companies Sapphire Energy and Aquaflow Bionomic both of whom are working on fuels produced from algae.

All very well but these companies are solving the wrong problem. The problem these companies are trying to solve is the current high price of oil. The high price of oil is not the problem – it is the solution to the actual problem of anthropogenic climate change!

In fairness to Chris, he also mentions work on getting algae to produce hydrogen:

Separately, talk in some quarters is picking up about using algae to produce hydrogen, a process being perfected by, among others, the University of California at Berkeley in conjunction with the National Renewable Energy Laboratory.

Now, if this came to fruition, Honda’s announcement today that they are going to start selling cars based on hydrogen fuel cells this coming July (2008) could be seen as very prescient.