Wednesday, October 31, 2007

There's no free lunch....

Good Morning, and here is my environmental rant for the day. Don't usually like to discuss things like this in this blog, but this is directly related to beer. Today I received an email from Northern Brewer discussing how the supply of hops will not meet worldwide demand for the next two years. This is on top of what we have all seen with rising beer prices this year.

Now what the Northern Brewer article didn't mention, is why there is a shortage of hops? And why have beer prices overall increased as well? Of course rising petroleum costs are raising prices of everything we buy. But that's not it by itself. One of the main reasons for hops shortage is the energy trend towards biofuels like ethanol. At first glance you might not see the correlation, but it's there.

Now I'm all for trying to find new cleaner resources of energy - solar, wind, nuclear, being chief among the options. But people need to understand there is no free lunch when it comes to energy or anything else. No magic bullet. For example, it takes more energy to produce hydrogen than you get from burning it. True, the end product out of your tailpipe is cleaner, but some production plant had to burn coal or natural gas in order to create the hydrogen in the first place, then had to transport the hydrogen to it's final point of use. All that is wasteful.

But now back to biofuels and beer. Farmers have found that with this new trend, it is more profitable to switch out their traditional crops and start growing corn to be used for ethanol production. So, farmers that used to grow wheat, barley, and HOPS are now growing corn instead. Thus here we have our inequity in supply and demand. Beer demand (especially for craft brews) is growing worldwide while supply of ingredients for beer are not. Another unintended consequence of the growth of ethanol is food shortages in third-world countries. Worldwide stocks of corn are being directed toward fuel production rather than food. This is also causing even more rapid deforestation to plant crops like corn and soy to be used for biofuel. Mexico has seen prices of tortillas rise to the point of regular people having to pay the equivalent of a day's pay just for tortillas which are the main staple. We are now starting to see countries like Taiwan and China withhold exports of rice just to be able to feed their own people.

So you see, there is no free lunch as my professor in Econ 101 told us. It sounds great to use ethanol to save the world by cleaning the air. But what good is that if we can't afford to eat our tortillas and drink our beer?!!

Like I said, I'm all for trying to do things better, and ethanol technology was an important first step in the goal towards cleaner energy. But what are some possible solutions that reduce the negative externalities (ECON 101 plug here) and still allow us cleaner air, cheaper beer and tortillas? I'm not a scientist, but here are some ideas:

1. Grow and brew your own:
Why not grow your own hops? Yes, they do take up alot of space, but anyone with a pole in the backyard or the ability to run a wire horiziontal can grow some hops. Grow organic as much as possible. And by brewing your own you are helping buy reusing bottles and minimizing transportation costs associated with production.

2. Buy Local: If you can't grow it yourself, try to buy not just your beer ingredients, but as much of what you consume as close to home as possible. This helps in a few areas. The farther the product had to travel to get to your plate or glass, the more fuel was consumed to get it there. It also takes cost out of the distribution chain. Buying locally supports your local economy.

3. Different production methods/ingrediants for biofuels: Producers need to look at other sources to make biofuels. Corn production requires much water and is not as efficient as other possibilities. What about about other options such as bamboo and hemp? Renewable sources that are more efficient to grow than corn. This would take pressure of world corn stocks. Of course new supply pressures would be put on other products that require hemp and bamboo, but like I said there is no free lunch.

Anyway, just some ideas floating around in my head.....

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