U.S. Policy on Oil production is hitting the poorest of the poor, those who make less than $2.00 a day, the hardest. Mostly because of environmental concerns, especially over Global Warming, The United States has been steadily increasing regulations of it's oil production, to the point to where there are no new production projects coming online in the United States. The U.S. is now producing less oil than we have in almost 60 years, even though we have some of the worlds largest reserves. This in turn has created an artificial shortage of Oil which has seen Spot prices jump to all time high's of over $110.00 a barrel. At first, the higher gas prices started to cause food to go up in price mostly because of transport, but that was nothing, now with the "Biofuel" craze, food prices are rocketing up faster than most in the third world can handle, up to a threefold increase since 2005 on some commodities. Corn especially has been getting a lot of attention on being turned into Ethanol for Gas production, but is it really wise for us to use the planet's food supply to drive our cars with? Especially when there's plenty of oil available off the Coast of Florida and in Alaska?
Many people don't even realize that Corn is used in making everything from beer to bubblegum and while here in the U.S. the higher prices are more of an inconvenience, in Third World nations, it can be the difference on whether you eat or not. To make matters worse, corn is expected to go even higher, because farmers are planting more Wheat & Soybeans this year, due to better profitability. In addition, we've gone from 50 ethanol plants in 1999 to 134 today! The Renewable Fuels Association has estimated that up to 1/3rd of the nations Corn production could soon be swallowed up by the Ethanol producers.
Prices are not just accelerating on Corn, Wheat & Soybeans; dairy farmers, meat producers, chicken farmers and others who rely on corn feed for their livestock are having to increase prices to compensate for Corn's skyrocketing costs, adding even more upward pressure on the nations food supply. Could this be the spark that drives a 70's style runaway inflation?
The Dirty secret about Corn though, is that it takes massive amounts of water and Nitrogen fertilizers to grow. Additionally, mountains of pesticides need to be added to keep the bugs from devouring it. Since Nitrogen is derived from Natural Gas, and pesticides come from Petroleum, as corn production increases, we can expect to see much higher costs of heating our homes and even higher prices for oil.
Now the fallout, In Haiti, the government almost endured a coup d'etat over last week's food riots on April 5th & 7th where at least 3 people were killed. Prime Minister Jacques Edouard has been ousted, leaving his appointee's merely passengers on a bus going nowhere until a new head of state can be ushered in.
In Mexico 75,000 people came out to protest against rising Tortilla prices, if people think the border situation is bad now, wait until poor Mexicans can't afford their Tortillas. We'll see even more border crossings as people who are starving don't care about things like immigration laws.
From Bangladesh to Egypt to Latin America and Africa, food riots are breaking out all around the world, while the U.S. has committed to a 200 Million dollar emergency aid program, the U.N.'s World Food program needs at least 500 Million just to meet emergency needs. We've yet to see if other nations around the world will step up to fill the gaps.
If the debate is over, then we need to start a new debate, because the policy changes we're implementing seem to be doing more damage to the Economy and the rest of the world, than any actual Global Warming. The worst part is, that the planet has actually stopped warming several years ago! While the debate continues as to wether this is proof that Global Warming was overblown, or if this is temporary, it seems that the 'cure' is worse than the disease.