Hope and audacity

Those of you following my blog know that I have been trying to confirm whether I was put under surveillance for my advocating activities with respect to ethanol. Here's an update...

On October 27, I followed up with the RCMP Privacy Office on my surveillance question of October 8. I was told that my request was "at the earliest stages of processing" and that "many factors influence the release time of information." I was told that I should expect a response in thirty days.

I don't see any practical reason why it should take two and a half months, all told, to get a response to a very straightforward question involving my security and privacy; I don't see why I should accept that the PMO simply chose to ignore my question when I posed it to them on September 13; I don't see how this situation can be considered acceptable in a well-functioning democracy.

Could it be that I'm just not smart enough to understand appropriate use of prime-ministerial power?

My first boss out of university gave me a piece of advice that has served me well in life. He said: George, if something doesn't make sense to YOU then it doesn't make sense PERIOD. Keep asking questions until it does.

So I'm asking questions. But since I'm not confident that the answers I get will be any good, I've decided to seek some pre-emptive legal advice. Last week I retained a firm that specializes in constitutional and administrative law. I am prepared to take this matter to the highest level possible. I want to know why the PMO didn't respond to my question; I want the government to explain to Canada the ethics and rationality of diverting massive amounts of agricultural land to produce fuel at a time when people are going hungry; I want to draw attention to my argument before the planet gets blindsided by another crisis that no one (and everyone) saw coming.

Barack Obama is poised to win the U.S. election tomorrow. Mr. Obama is from Illinois, a corn state, and he is a big supporter of bio-fuels. I have no reason to think that Mr. Obama is not a principled man. Maybe he just hasn't had time to really think through the implications of his stance. All the same, if he wins, his administration will push the ethanol agenda full-speed ahead.

Of course, that only heightens my sense of urgency.

Do I really think an ordinary person like me can change the course of the world with not much more than a laptop and a bit of determination? You bet I do.

Hope and audacity are two things that Mr. Obama and I share.

A few bad mortgages, a little less corn to eat

Hi all,

I'd like to share with you this short article about leadership from Monday's Globe and Mail. The story talks about the pivotal roles that fear of conflict and losing touch with the basics played in the global financial meltdown. With a little insight, you can draw clear parallels between subprime lending and that other great illusion, bio-fuels.

I'm confident most of you question the wisdom of using food for fuel. But I'm also willing to bet most of you think that ethanol could not possibly have fallout exceeding the subprime crisis in scale and speed; that if it could, the world's leaders would surely be on top of it.

Don't be so sure. Remember the lessons of subprime: Sometimes people who ought to get it, don't. Sometimes they get it but are reluctant to speak out. Sometimes they are complicit.

All of us, every day, make decisions large and small that influence the world around us. Every one of us is a leader. Consider what you can do to be a better leader. Think about your right and your duty to say what needs to be said. Don't dilute the message.

Democracy, my friends, starts in the voting booth. It doesn't end there.

Please read comments

Hi everyone,

Just wanted let you know that some very substantive discussion has taken place in the comments to my first - and key -post. I encourage you to take a few minutes and read them.

Thanks to everyone for your support. I think we're starting to see some traction.

George

Why this blog?

Many countries have implemented policies to encourage the replacement of conventional fuel with ethanol and other bio-fuels typically made from corn or other grains. The International Energy Agency estimates that it would take 15% - 20% of the world's farmland to achieve a minimum content requirement of 5% ethanol in motor fuel if that standard was implemented worldwide. Some countries are mandating more.

With today's level of agricultural productivity, 15% of the world's farmland feeds about one billion of its people. For every percentage point of the world's farmland that we choose to divert to fuel crops, food for 65 million people will disappear.

See the problem?

Hello, and thank you for visiting my blog.

When I first took an interest in ethanol and the food crisis last fall, the issue was on hardly anyone's radar. In just a few short months, it became a headline grabbing global crisis. How did it happen so quickly?

In this post I'll tell you:

• A little about myself
• My take on the food crisis and ethanol's role in it
• My campaign for common sense policy
• What you can do to help

The post is three or four pages long. I think you'll find it thought-provoking. The most important part - what you can do - is at the very end. Please stick it out!
.
First, a few words about me. My name is George Tesseris, I'm 46 years old, I was born in Greece, and my family moved to Canada when I was very young. I live in Toronto. I am one hundred percent Canadian and I will always value my Greek roots. In Canada that's more than just ok, and I think that's one very good reason for the world to pay attention to Canada.

My educational background is in engineering and my professional background is in financial services. I have neither a vested interest in any aspect of the ethanol issue, nor any political motives. A couple of years ago I became seriously ill and left my job to concentrate fully on my health. Last fall, with time on my hands and my health recovering nicely, I started to follow media coverage of what seemed like an unlikely relationship between ethanol and a food crisis that was developing in the third world. As I made it back to full health, I found myself becoming increasingly involved with this one issue.

I believe that ordinary people can accomplish extraordinary things when they set their minds to it. I think stopping ethanol is an extraordinarily important thing to do and I'm doing everything I can to make a difference.

So that's a little about me. Now let me tell you my views on ethanol and the food crisis.

I'm not an economist but I have taken a few university level economics courses, and I think basic economic theory can help us understand how the food crisis arose and where it is heading.

For some time now, demand for foodgrains has been exceeding supply. Not even the ethanol lobby denies that the ethanol boom is at least partly responsible for the supply/demand imbalance. The effect of this imbalance is that global grain stockpiles have hit historic lows. Where the world usually has six months' supply of foodgrains, this past spring saw supply drop to less than two months' worth.

Economic theory tells us that no commodity is more sensitive to the forces of supply and demand than food. In fact, when there's a concern that supply will not meet demand, the economics of food become the economics of scarcity. Panic buying, hoarding and very large price gyrations occur. Intuitively, this phenomenon is easy to understand.

Theoretically, it can be explained with the Economics 101 concepts of elasticity of demand and substitution. First, in economic terms, demand for food is almost completely inelastic. It stays almost constant in the face of supply drops or price increases because people can't put off the decision to eat until the economics become more favourable. Secondly, the prices of basic staples like wheat, corn, rice, and soybeans are inter-related because one can substitute for another in basic diets. In economic terms, they are substitute goods. Hence, even a small deficit in the supply/demand balance for corn can cause shortages and price spikes not only for corn but for all basic staples, as people start shifting their diets in search of affordable alternatives.

Essentially, what all of this means is that panic behaviour sets in quickly when people perceive they may lose access to affordable food. Left to market forces, fear translates into a price spiral that starts with basic staples and spreads to all other types of food. Eventually, of course, inflationary pressures ripple into the broader economy.

That's what we started to see last spring. Supply could not keep up with demand, the cupboards became increasingly bare, and there was a run up in food prices. Of course, the world's poorest economies were most affected because their people have the least capacity to absorb increased costs. The result was perfectly predictable: widespread food demonstrations and riots, panic buying and hoarding, and export restrictions in some countries (in other words, hoarding on a national scale).

The key point to remember is that it doesn't take long before a very small ongoing deficit in the supply/demand equilibrium causes food shortages and very large price spikes. That, and that people get incredibly cranky when their grocery bill triples. Not a good idea to mess around with the world's food supply.

Let's be perfectly clear. This isn't the market breaking down. It's the market behaving exactly as science predicts. One thing is certain: when you take food production out of the system, you'd better be damn sure you can replace 100% of it with new supply or else there will be bidding wars for what remains and someone down the line will have to go without.

Now about ethanol. Mandated ethanol use is climbing rapidly - and pressuring the food supply -all over the developed world. For example, twenty percent of the American corn crop is already going to ethanol and the recently-enacted U.S. Energy Bill mandates a five-fold increase in ethanol production over the next several years. The U.S. is the world's largest producer and exporter of corn. When it diverts so much of its corn crop for fuel, there is a very material impact on the fundamentals of supply and demand for all foodgrains worldwide.

Luckily, recent weather conditions have been very favourable for agriculture in most parts of the world. Bumper grain crops are now expected almost everywhere, so that there will probably be enough supply to meet this year's growth in demand. It looks like we might have dodged a bullet - for now.

Expect the reprieve to be temporary. Government subsidies and minimum fuel content quotas are driving rapid ethanol production growth not only in the U.S. but all over the European Union, Canada and other parts of the world. Clearly, grain supply will be under intense pressure to keep up with demand into the foreseeable future. And next year, we may not be so lucky with the weather.

Given the stakes, we need to think seriously about the likelihood that grain stockpiles will soon approach absolute depletion and food prices will spiral out of control. It's entirely plausible that the entire world - developed and developing - will be faced with the economic, geopolitical and humanitarian implications of food hyper-inflation and widespread hunger next year. Last spring was a preview of just how quickly that can happen.

We can spend a lot of time discussing that ethanol is not the only factor at play - that fuel costs, improving diets in the developing world, and poor weather in previous years have all contributed to food inflation and the supply/demand imbalance. In fact, wasting a lot of time arguing the relative impact of each factor is exactly what the ethanol industry wants us to do. It has no interest in changing the status quo. After all, it gets huge subsidies to help us burn food.

Of course there are many factors affecting the world's food supply. But talking about them ad nauseum isn't going to solve the food crisis. It remains that responsible governments should be looking for immediate, concrete ways to restore sustainable market equilibrium, and the only lever that can be effectively and immediately manipulated to restore that equilibrium is ethanol policy. Any sensible government should be thinking very hard about facing up to that inconvenient truth and pulling the ethanol lever right now.

Countries that have a recent history of hunger - India, China - have a visceral understanding of food economics and have pushed the West on ethanol policy. The West, without the same recent history and influenced by the agrofuel lobby, the notion of energy self-sufficiency, and a plain old aversion to backpedalling, has pushed back firmly. Against all good sense, it looks like ethanol is here to stay.

No discussion of ethanol would be complete without looking at the environment. While ethanol has been around for a long time, the current push started in the last few years as the world began looking for ways to mitigate climate change. On the surface, it certainly seems that a renewable, non-carbon source of fuel should be a great alternative to oil. And if it was, then perhaps one could try to make the case that the risks are worth it. However almost as much energy goes into growing, harvesting, transporting and refining grain-based ethanol as is produced by the process. Furthermore, deforestation, pollution from fertilizers, and impacts on water supply are real concerns as more land is pressured to grow even more crops. For these reasons, the Sierra Club, the Nature Conservancy, and the World Wildlife Fund have all spoken out against grain-based ethanol. The Green Party of Canada does not support it. Ethanol is bad environmental policy.

One would hope that Stephen Harper - Canada's no-nonsense prime minister and a trained economist who is about to start campaigning for re-election - grasps all this. Canada, by virtue of its international orientation and shared values of fairness, compassion and common sense, is uniquely positioned to lead the world in making wiser policy choices that stop encouraging ethanol. Canada may not be in the demographic big leagues but it holds a respected place in the global community. Sometimes one small crack is all it takes.

As a Canadian, I have been trying to make this argument with my government since February '08. I have raised the issue at an all-candidates' election debate. I have had ongoing correspondence with the Prime Minister's Office and the Ministers of Agriculture and Natural Resources. I have made contact with the opposition parties and the media. While I have not yet had any traction with the opposition or the media, I have succeeded in receiving personal responses from both ministers. Judging by their replies, my government does not understand that ethanol is a grave and imminent threat to humanity.

Or doesn't want to.

This blog is the next step in my campaign. I will use it to update you on the results of my efforts and I will occasionally post my views about news stories related to the issue. I hope you'll join in with your comments too. If you click one of the Subscribe buttons on the right side of the screen, you'll be automatically notified when new content is posted.

But above all, if you agree that ethanol is a really bad idea then please do these three things:

1. Tell your government. In Canada, email your MP and the Prime Minister. send them a link to this blog, and tell them you agree with the views expressed. In the United States, email your elected representative and the President. Elsewhere, email your elected representative and the leader of your government. The same arguments hold no matter where you happen to live.
2. Tell the media. Email your favourite media outlet, send them a link to this blog, and tell them you agree with the views expressed.
3. Tell your friends. Send your friends and colleagues a link to this blog and ask them to help out.

Working together and speaking with a common voice, we can make our governments listen to reason.

Thanks,
George