Over the past couple of weeks, we’ve had the two meetings of the Economic and Political Global Elites.
First the World Economic Forum in Davos, Switzerland. And concluding just yesterday the Bilderberg Meeting in Washington, DC.
As you may expect, both groups share much the same values. And see the same economic and political issues in the world.
This year, as is almost always the case, Climate Change was one of the Chief Issues for both the WEF and The Bilderberg Group. Even the Royal Family got in on the Climate Change parade, when William, the future King of England spent his three-minute homily for his Grandmother, praising her efforts as a climate change champion.
While there are many dimensions to the climate change issue, perhaps the greatest of all issues is clean energy. And specifically, especially for those of us in the US, clean energy for our transportation.
And it’s at this point that we get a real divergence between the way the elites of the world view clean energy and the way that the average citizen views the current issues of energy. And ironically food.
You see, the number one method that the US has chosen to produce cleaner energy is by using ethanol in its gasoline blends. And ethanol is produced from corn. A major food crop.
The use of corn-based ethanol ramped up quickly in the United States. From an essentially zero starting at the turn of the century. The US became the number one producer of corn-based ethanol just 5 years later.
Today the US is the world’s largest producer of corn-based ethanol, by far. And a very rough estimate would be that corn-based ethanol supplies about 5 to 7% of the nation’s gasoline blend. The most popular ethanol blend is 90% pure gasoline, and 10% ethanol. But that goes up and down depending on the season and varies from state to state.
To achieve this, farmers have dedicated 40% of their corn crop to growing corn exclusively for ethanol.
And it is exactly here, that climate change meets the specter of food shortages. An issue that is not even on the radar for the Global Elites. But increasingly will concern the average citizen.
There are few things that concern a population more, that the prospect of famine. The lack of food is one of mankind’s biggest worries. The concern for their next meal is a growing anxiety for many.
From hard luck alley to the pantry of many “Preppers,” the concern for a while now has been long-term food supplies. And last week’s report by the US Department of Agriculture, highlighting the rising cost of food, did nothing to quell that concern.
The concern over the food supply is a rapidly rising alarm for many. And if heaven forbid, we should have a poor crop harvest this year, that level of concern will rise exponentially.
So why is it that we are dedicating 40% of one of our principal grain crops, to burn in our automobiles? Yes, transportation is important, but isn’t survival more important?
It’s a very tough question.
It’s the kind of question that asks: OK we’ve developed a plan. A plan to lower global emissions.
But what if circumstances change? What if we have to reverse our plan? Use corn to feed people, instead of power automobiles.
That’s the kind of question we need to address today. Because that may well be our reality tomorrow.
Today’s Economic News
The Biden Administration released its new mandates on Ethanol. Requiring more gas to be produced with the highest ethanol blend. This will mean that even more of America’s corn crop will be used as fuel.
A recent blistering report by the National Academy of Science reported that the use of corn-based ethanol is raising the price of corn by 30%. And the price of most corn alternative grains by 20%.
What’s more, the National Academy notes, that the production process of ethanol is a contributing factor in our water pollution. And that this water-borne pollution, negates any other benefit that corn-based ethanol may have.
Like many issues turned political, there is much more to this “simple” solution to greenhouse gases.
Speaking of unintended consequences, Oil Price dot com is reporting this morning that Russia received $6 1/3rd billion more in June oil revenue than expected. All a result of the European and American oil sanctions.
And, finally in oil today. Saudi Arabia has just announced that they will raise their price of oil beginning today. This as West Texas Intermediate, America’s benchmark oil is selling just a fraction under $120 per barrel.
There are no major US Economic Reports today.
In earnings leading off will be software company Get Labs. Then financial management company Coupa Software, and cooperative insurance company Health Equity.
Have a great day!