AHC Group

CORNucopia of Opportunity in the Heartland: Or Just More Feed for the Political Cattle?

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We now live in a carbon constrained world. Fears of human induced climate change are bringing about changes in government, corporate and consumer behaviors. Investments in renewable energy are increasing, corporations are greening everything from their supply chain to their vehicle fleet, and consumers are seeking to minimize their ecologic footprint as well. Are some of our greening efforts leading to a recipe for success or failure? Is the short-term monetary gain fueling investments that will not be financially or environmentally sustainable?

In America’s heartland, growing corn for ethanol fuel feedstock is almost as good as planting a money tree right now. Driven by a carbon-constrained world and need to reduce U.S. dependence on foreign oil, are we setting ourselves up for a corn constrained world? A CNN Money.com article states the U.S. will grow more corn in 2007 than any year since World War II. The driver for this boom in corn production is ethanol fuel whose main feedstock is corn.

The story of ethanol is just beginning in the U.S. Demand for ethanol fuels are growing. President Bush has proposed that the U.S. reduce its total gasoline consumption 20% by 2020. To achieve this goal President Bush recommends displacing gasoline, in part, with ethanol. But what is the true cost and risk associated with a biofuel like ethanol?

I’m all for biofues, creating jobs and enhancing our energy security - but at what expense and future risk? For example, increased production of corn for ethanol will displace other agriculture commodities like soybeans and wheat. As a result the consumer cost of these commodities may increase. Other agriculture products including beef may be subject to price variability due to the diversion of corn to ethanol production. In addition other natural hazard and environmental variables cannot be controlled. Increased incidents of tornadoes or hurricanes for example will impact short-term agriculture production and pricing. Short and long-term weather fluctuations can impact agriculture output, length of growing seasons, and numerous production variables (like water availability, soil nutrients, PH and overall quality, and insect infestation). In fact NASA Research found that the Dust Bowl of the 1930’s was a major climatic event spawned by “cooler than normal tropical Pacific Ocean surface temperatures combining with warmer tropical Atlantic Ocean temperatures to create conditions in the atmosphere that turned America's breadbasket into a dust bowl from 1931 to 1939”. If the U.S. reduced its dependence upon foreign oil by 20% and increased dependence on heartland produced ethanol, how would we react to another decade long dust bowl in the 21st Century? Is this energy dependence and security that we are creating or shortsighted short-term economic gain with global spin?

While there may be some science and technology solutions to these issues – is this a sustainable model for energy production in the long-term? Displacement of agriculture land to produce feedstock for biofuels also raises equity and ethical questions. Should farm land be utilized for food production, helping feed those that are hungry in the U.S. and world? Are we that addicted to transportation fuels that we’re willing to get a new fix rather than address our over-consumption? Are we only masking our thirst for oil with a new buzz on heartland fuel?

There are many unanswered questions surrounding alternative transportation fuels, particularly ethanol. As this industry plays-out we will watch with a careful eye to what’s working and what is not. A larger “systems view” of global climate change, natural resources, food and energy production and equity needs to align with societies evolving greed for what’s green. If we only succumb to meeting our short-term “fix” we will misguide future generations.

Many companies have realized this and are searching for better solutions.

The path to growth of many leading executives in our AHC Group (www.ahcgroup.com) network involves a dashboard that includes so many variables it’s almost impossible to navigate where to go. However, the companies that are leading the way toward a more sustainable world have figured out that one simplified formula can lead them in the right path: population growth + rate of consumption + efficiency of our machines = pollution and climate change. So, with this formula in mind, corporations from GE, Boeing, Starbucks, Wal-Mart, Siemens, Tom’s of Maine and Dell are simplifying their dashboards, and setting a course for action while they search for new solutions to minimize their environmental impact.

The story environmental business expert Bruce Piasecki tells in his World Inc. is rich with these complexities and tangible examples of what has worked when sustainability is integrated into the core business of small and large corporations. In reading World Inc. it becomes apparent, that while we live on a finite earth – the opportunities for creating better products and a better world are infinite.

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