Edward Seaga, Contributor

The supply of petroleum to meet global fuel needs is within sight of the peak of supply. From there on, the supply of oil will dwindle until there is no further supply available. Authorities put the peak at less than 30 years and the end of supply at some 50 years.

Contemplating a future without energy for industrial and commercial use and the operation of household equipment, is to contemplate a world without light or mechanised transport of any sort and without processed foods, or other manufactured products, such as pharmaceuticals; no communication would exist, whether telephone, television, radio or computer.

Realisation of the threat of this technological Armageddon is driving intensive thinking and planning for production o fuels.

Wrong start

Ethanol has the head start, but a wrong start. Ethanol production is now from sugar cane in Brazil, the world's leading producer, with corn in the United States not far behind. Between them, both countries produce some 80 per cent of the 10 billion gallons of global supply.

The problem is that this is only a small amount of what is needed. President Lula of Brazil, recently announced that Brazil will increase its output of ethanol from five to 25 billion gallons and President George Bush is urging the country to increase American supply sevenfold from five billion to 35 billion gallons by 2017.

This seems like a solution, but it is not. It is only a part solution for three good reasons:

First, far more than the combined projected total production of Brazil and the United States will be required to produce any substantial substitution of gasoline. This raises grave problems of its own which constitute the other two good reasons.

Expansion of Brazilian production of ethanol from sugar cane means larger scale invasion of the Amazon to clear more land increasing substantially the damage this is already causing to the atmospheric shield which protects the earth from global warming. The increased ocean temperature resulting from global warming is melting polar ice more extensively and more rapidly, lowering temperatures and prolonging winters. The scenario now being drawn is the possibility in the not too distant future of the arrival of another "little ice age", freezing over northern Europe and Canada, creating a standstill. Elsewhere, melting of the polar caps will increase the sea level which will inundate all low lying habitations in cities, towns and villages.

Another catastrophe

Using corn as the feedstock for ethanol production presents another catastrophe. The total output of corn in the entire United States would replace only 12 per cent of the current usage of gasolene, says the respected Journal Foreign Affairs in a chilling review of the problems of ethanol entitled, 'How bio-fuels could starve the poor', a point recently made by Fidel Castro.

But it will not take full use of the corn crop to create a huge disaster in the supply of corn, soya and other vital cereals for food. The movement of prices of these essential cereals will rise as more and more corn is diverted to provide fuel. These prices will be unaffordable by the poor across the world.

Since some 50 per cent or more of the income of the poor is spent on food it will not take long for this to be translated into industrial pressure for increased wages, or increased cost of production of goods supplied by the poor. Where this inflationary spiral of prices would stop depends on the extent of corn utilised in the production chain. But one thing certain is that great damage would be done to national and household economies by the upward spiralling of food prices.

It appears that a course has been set by the two giant ethanol producers which will court damaging consequences. In that event, where does a small ethanol producer like Jamaica stand? Jamaica, at present, is importing Brazilian ethanol from Brazil from which the water has been removed, rehydrating the product here and shipping it under the CBI duty free concession to the United States as a finished product. Production from a feedstock of fruit juices was where the ethanol industry started in Jamaica towards the end of the 1980s. It used imported grape juice from Spain as the feedstock. There was much difficulty then because the number one American producer, ADM, the foremost cereal producer, objected to the concessions being granted to Jamaican ethanol using imported grape juice feedstock. That is no longer the case as the American economy is in need now of all the ethanol it can obtain.

Proper feedstock

But a sustainable ethanol industry in Jamaica cannot be built on imported feedstock which can be subject to change. The proper feedstock for a Jamaican industry to produce ethanol locally is from sugar cane. But there could be a problem here. No one can authoritatively say whether sugar cane can be produced in Jamaica at a cost low enough for Jamaican ethanol to compete against foreign ethanol. This could mean that cane produced here may have no value as a feedstock for ethanol production.

Sugar production is facing a doubtful future in Jamaica. The time is not far off when a decision has to be made regarding the future of sugar. Considering that a substantial portion of the more than 100,000 acres of prime land is in jeopardy if sugar production is discontinued, it would seem to be a matter of urgency to determine whether sugar cane could still be grown for ethanol as a substitute for sugar production. But, judging from the apparent lack of work going on to determine the feasibility of low cost production of local sugar cane, it is possible that the single solution which could be available for the sugar problem could escape. If so, the country should prepare itself for the onslaught of higher prices, particularly in food and drink, without any redeeming option.

The looming crisis in energy has given enough indications of a timetable which spells out the need to act now to avoid perilous prices which could be a grave setback to the future.

Edward Seaga is a former Prime Minister. He is now a Distinguished Fellow at the University of the West Indies. Email: odf@uwimona.edu.jm