Biofuels under fire at International Energy Forum

Reuters 21 Apr 08;

Biofuels, once seen as a key factor in curbing greenhouse gas emissions, are behind the current global food crisis, major oil producers and consumers charged at an energy forum here on Monday.

"A conflict (is) emerging between foodstuffs and fuel ... with disastrous social conflicts and dubious environmental results," outgoing Italian Prime Minister Romano Prodi told the International Energy Forum here as rising food prices worldwide raise the spectre of famine in some countries.

"We have to examine very closely subsidy policies so as to avoid distortions in the allocation of resources," Prodi insisted.

Agricultural prices were not only being driven by rising demand but also by increased cultivation of biofuels, "creating strong tensions in a number of countries," he said.

Biofuels were developed as part of plans to limit and reduce greenhouse gas emissions, held responsible for global warming, but since they take up land that would otherwise be used for food production, they have been increasingly blamed for soaring food prices.

Qatari Energy Minister Abdullah bin Hamad al Attiyah said the world would have to choose "what its priority is going to be -- driving or eating."

He rejected suggestions that high oil prices were behind the food crisis.

"It's not oil that should be questioned, it's biofuels, which are at the root of the problem," al Attiyah said.

The food crisis was due to food shortages and not to high oil prices, he argued.

"Even the big rice exporters such as India, Bangladesh and Thailand are in the process of reducing their exports," he said. "

Venezuelan Energy Minister Rafael Ramirez said that biofuels were having a negligible impact on the oil markets.

"But look at the impact (they have) had on food prices. It's madness," he said, adding: "All the countries of Latin America have been hit by the surge in food prices."

Lawrence Eagles, chief analyst at the International Energy Agency (IEA) which represents the interests of the oil consuming countries, said he believed biofuels were "part of the equation" but it would be "wrong to focus solely" on just one element.

Rising food prices were due primarily to "very strong demand" for agricultural products in emerging countries, he said.

The IEA supported the use of second-generation biofuels, which used non-food plants as their base, Eagles argued.

"The second generation has its place in the palette of energy products," he said.

Meanwhile the head of Royal Dutch Shell, Jeroen van der Veer, said that too much importance was being attached to biofuels. Biofuels "will play a role" but were only one of a number of energy components in the mix, he said.