Sunday, November 22, 2009

Oil prices and grain (corn) prices... is there a link?

An increase in the conversion of grain (corn) into ethanol in the US will not make up for the expected shortfall in oil production because the production in of itself is energy intensive. Also one would need so much corn to make up for it and there is not enough room/ farming land to grow all of that corn. According to Brown, there may not be enough ethanol made and what is made will only be available to wealthy people because the ethanol will be so expensive. Everyone else will have to find another way to acquire their food. Filling up one of America’s SUV’s with corn made ethanol, would be equivalent to feeding one person for a whole year; that would be something to think about. Another problem would be the usage of this corn made ethanol because the consistency of ethanol is much less dense then our oil made gasoline we use now a day. We would not be able to use this ethanol for jet fuel, which causes a big problem.

According to Lester Brown, there is a link between oil prices and grain prices. His reasoning for this concept is, as corn is converted into ethanol, the price for food goes way up. This makes if hard for the common man to afford food. Because food security is not usually a problem for the common now a day man, this would become a shocker for people if it became a problem. Another consequence of food costing so much money would be, there would be a decrease in food aid for other countries from the US and people in 3rd world countries would either starve or revolt and riot against their government.

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