The Hill: Biofuel's policy free ride is over

Tuesday, June 3, 2008

The government's biofuel legislation looked like it was going to sail through Parliament. Then came headlines about a world food crisis, with biofuel pegged as one of the culprits

by BARRY WILSON

Even by the Ottawa standards of shifting political sands, the fall from grace of the government's biofuel support and subsidy policy was breathtaking.

Not so long ago – let's say the 2006 election campaign – all political parties were bully on biofuel as an environmental policy.

The Conservatives promised a five per cent mandate for ethanol content by 2010 and two per cent biodiesel by 2012. Opposition parties climbed on the green bandwagon and said the Conservatives were too, well, conservative and the mandate should be 10 per cent.

Earlier this year, the government introduced legislation to do what they said they would do and it was widely hailed as a win-win-win: Good for the environment, good for farmers and good for consumers.

The bill, C-33, received quick passage in House of Commons at second reading and was sent to the agriculture committee, where farm witnesses praised it as an opportunity and skeptics, including the National Farmers Union and a University of Lethbridge professor who challenged the environmental and rural development benefits of biofuel, were barely heard and certainly not given weight.

Quickly it was back to the Commons for final consideration, a popular environmental policy with a strong farm policy component.

But there was some spillage between the lip and the cup. By early May, headlines were trumpeting a world food price crisis which was driving hundreds of millions of world citizens into poverty, leaving food aid programs short of funds and United Nations food programs begging for additional donations to avert widespread starvation.

Many credible international organizations flagged biofuel demand as part of the reason for soaring world food prices and threats of a hunger catastrophe. The United Nations Food and Agriculture Organization quickly organized a June meeting of heads of state in Rome dedicated to discussing food security and biofuel demand.

The debate had shifted from good agricultural and environment policy to world hunger.

It was reflected in the House of Commons as increasing numbers of opposition MPs questioned the wisdom of Canada's $2 billion support for the biofuel industry.

They criticized the government decision to send the bill to the Commons agriculture committee rather than the environment committee as a sleight-of-hand designed to make sure it received little environmental scrutiny.

And, while continuing to proclaim their support for the principle of biofuel development, opposition MPs increasingly delayed its approval in the Commons.

It almost certainly will not have received final approval from the Commons and the Senate by the time Parliament adjourns for the summer 10-week break in mid-June.

In early May, agriculture minister Gerry Ritz seemed genuinely perplexed by the growing skepticism. "No one thought when we brought it in that this type of bill would face this kind of adversity," he said. The minister blamed media hysteria about the world food crisis and opposition vacillation for the problems.

But a more serious examination would note that the energy efficiency of biofuel production from grain and oilseed feedstock has been credibly challenged. Moreover, the argument that biofuel demand for grain is not a factor in rising prices is counter-intuitive and the rush to subsidize the biofuel industry has not been subjected to rigorous assessment for its environmental or public policy wisdom.

Biofuel development may well survive this and become the great hope of farmers and environmentalists, but its policy free ride clearly is over. BF

Barry Wilson is a member of the Parliamentary Press Gallery specializing in agriculture.