'Food or Fuel ... and what’s happening with Oil'

The following is a summary of the Presentation on 'Food or Fuel ... and what’s happening with Oil' by Bob Russell, June 16, 2008 in Lethbridge sponsored by the Lethbridge Federal Liberal Policy Committee. I compiled it from the notes I took at the session. We will advise later as to whether or not we need to generate and forward recommendations with respect to policy on the issue.

Rightly so, we urbanites are increasingly interested in where food comes from even if only prompted by recent high increases in prices of both products - food and fuel. However, considering everything Canadian grain farmers might best stick to growing grains and oilseeds for food and leave the production of biofuels to other countries i.e. Brazil. Mr. Russell says, he’s not opposed to biofuels i.e. ethanol or biodiesel, his concern is with the emphasis and high level of subsidy by our government when so many are starving in the world with concerns and lower than ever per capita food stocks. He says, he’s got an ethical dilemma using food to produce fuel. He also says, we’ve got to be careful we don’t ascribe causes and blame wrongly and it behooves all of us to be as educated as possible not only as broadly as possible but especially on the issue and ramifications.

Mr. Russell says that with respect to increasing food-production costs there are many forces at work not least of which is the cost of fuel of which oil is the major influence. The major issue is that the main traditional source of fuel, oil is diminishing and demand increasing. Also, pressure has intensified to find new alternative fuel sources as well as improve technology’s performance. Bob suggests we’ve got to realize there are many forces at work and we need to ask questions. We need to look at the ethics of practices that impact the food supply and chain of supply. We need to understand often hitherto unknown factors i.e. diseases affect supply and we need to be cognizant of the amount of time and money we expend as well as to be aware the huge costs of infrastructure and moving products costs at all stages of the process. Also, we need to be aware of what’s happening in the U.S. which was ahead of us in likewise overemphasizing biofuels and especially now factor-in the latest new oil finds from less traditional areas i.e. the cross border find announced last Friday which is said to be many times that known in Saudi Arabia. It’s well known that we’ll be in oversupply from the Figures from two of the three plants in Alberta which indicate the quotas they’d set will create an oversupply problem. Also, it’s been noted that farmers have complained they’ve been awaiting payments for some time.

Mr. Russell says that currently there are 22 biofuels plants in Canada, 3 in Alberta. The Federal Government is subsidizing the ethanol industry in amount of 2 billion and there has been no clarity as to the extent of the Provincial contribution. He noted that with Government intervention by way of subsidy “there is no real free and open market for grain”. Another factor not known is what impact a sudden rush by the vehicle manufacturers to produce more efficient hybrids may have which Bob says pertains to cars. We can imagine the boon it would be if they succeeded in applying the hybrid technology to the real gas guzzling trucking industry. Bob also suggests that all would hugely benefit if they also applied principles used in the aviation industry that is believed to be far ahead in use of refined fuels. He says, cleaner burning fuels largely needs political will to ensure it occurs.

Mr. Russell noted with interest that only two of the eight up-grader plants originally planned for the Tarsands are online. There are lots of alternatives planned the public aren’t aware of i.e. a pipeline from California to Alberta to ship a thinning product for use in the Tarsands to help eliminate shipping of raw bitumen. It might be postulated that the delay with respect to the other up-graders may be as a result of such behind the scenes deals obviously in the interests of U.S. oil security. Bob noted that Mr. Stelmach said shipping the bitumen literally “is akin to selling the family farm”. We might need to consider that such movement may soon raise other problems considering difficulties and subsequent regulations imposed to help prevent transfer of disease from farm to farm North of Edmonton. He also noted that recently it has come to light that American biodiesel is now “seeping across the border as a result of NAFTA” and there’s nothing we can do without it.

In brief, and as confirmed in question period we need to be cautious of the information we’re using since much information being bandied around is very out of date and from the era when some foresaw difficulties as well as were trying to get attention of those whose interests were more in selling than stewarding of resources. Also, it was pointed out that Canada needs to be cautious about how much goes into subsidization bearing mind that the U.S. subsidizes 80-90% or research. One businessman suggested that we need to question the apparent waste of feasibility studies i.e. in Vulcan which has minimal water when copious amounts of water are needed in the ethanol process as verified in the case of the local distillery thus emphasizing recent attention suggesting a water issue looms on the horizon too. Another questioner pointed out the need for people to understand and not confuse all alternative fuels noting the huge difference between bio-diesel and ethanol. Another participant emphasized the need for caution with the information being used and another noted clauses of the NAFTA Agreement that outlines major repercussions with respect proportionality of sales as well as for reduction and/or withdrawl of options. Long and short is, we all need to realize and expect price increases for both food and fuel from hereon and we need to become considerate in our use and habits.

Summary by Michael Cormican, Liberal Candidate, Lethbridge