May 14, 2008

East Lansing, MI - The Renewable Fuels Commission (RFC) yesterday tackled factors impacting the current food versus fuel debate as it outlined Michigan’s roadmap for the development of sustainable fuel sources and identified challenges.

The RFC outlined issues related to the expansion of biobased fuels such as the need to take stock of Michigan’s supply and production chains to determine the long-term sustainability of those fuels.

“The production and supply inventory underscores the need to see where we’ve been and where we are in order to help pave the way for the future of biofuels in Michigan,” said Don Koivisto, Michigan Department of Agriculture Director and RFC Chair. “Creating a baseline will help us evaluate the long-term sustainability of present and post-corn ethanol while utilizing our vast natural resources to advance other biofuel technologies such as cellulosic ethanol, which is made from non-food feedstocks.”

At the forefront of the sustainable fuel discussion is the impact that biofuels may be having on the rising cost of food in the United States.

“Having both food and fuel are possible, but it hinges on the resolution of several critical issues such as continued global population growth and subsequent diet transformation, the capacity of the agri-business sector to improve its productivity, water and land use, and carbon impact,” said Dr. Chris Peterson, director, Michigan State University Product Center. “The fact that Michigan has a Renewable Fuels Commission dedicated to tackling these tough issues offers tremendous opportunity.”

The RFC heard a presentation by Dr. Peterson discussing impacts on food prices. Ethanol production is only one of many contributing factors to higher food prices. Other factors include, but aren’t limited to, skyrocketing fuel costs (especially since food has to travel further to get onto store shelves), increased food demand due to population and income growth, worldwide weather conditions, and dwindling carryover stock of agricultural commodities.

Two key factors impacting food costs are the growing middle class in China and India, who are able to afford more protein in their diets, including more meat and milk which is adds to the demand for feed; and the declining value of the U.S. dollar. The fluctuations in the value of the U.S. dollar create a two-fold issue: it creates a larger worldwide demand for U.S. exports while simultaneously making food and fuel imports more expensive. The U.S. now spends $1.4 billion a day on imported oil.

“As a leader in the development of renewable fuels, Michigan is dedicated to creating a long-term roadmap for growing this industry,” said Koivisto. “Additionally, taking a measured approach is critical to helping biofuels live up to their reputation to expand the state’s agri-business sector, break our reliance on foreign oil, and decrease greenhouse gas emissions.”

The Renewable Fuels Commission, appointed by Governor Jennifer M. Granholm, is charged with promoting the use of alternative fuels and vehicles, encouraging the production and use of biodiesel and ethanol products in the state, increasing the viability of Michigan's agri-business industry, and advancing alternative fuel research.

For more information, visit the Renewable Fuels Commission Web site at www.michigan.gov/rfc.