The world's energy system seems to have come unhinged. Oil is trading at record high prices because demand keeps rising even as supplies become unreliable. Oil exporters from Iran to Russia and Venezuela are using their petrocash to pursue agendas that undercut western security and interests. Supplies of natural gas also seem less secure than ever.

The root cause of these troubles is dysfunctional energy politics. The countries with the strongest incentives to cut their vulnerability to volatile energy markets - notably America - are unable to act because influential politicians view all serious policies as politically radioactive. Efforts to boost supply have little leverage because the most attractive geological riches are found mainly in countries where state-owned companies control the resources and outsiders have little clout. Thus, the current energy debates are generating a volcano of proposals that have no positive impact on tight markets.

Yet these structural barriers to serious policy remain hidden because the debate labours under the meaningless umbrella of "energy security". Proper policy on oil and gas must start with the distinct uses for these fuels - each requiring its own political strategy.

The effort on oil must focus on transportation. Vehicles and aircraft work best with liquid fuels that can store large quantities of energy in a compact space and flow easily through pipes to engines. Searching for a better substitute is worthwhile, but the effort faces an uphill battle. With today's technologies, no other energy liquid can reliably beat petroleum. Liquids can be made from coal, as South Africa and China are doing. But that approach is costly and has unattractive environmental implications. Brazil and the US have focused on ethanol, which they distill from sugar or grain from crops. However, those programmes, which account for less than 0.5 per cent of the world's energy liquids, have a negligible impact on the oil market. Yet, America is redoubling its ethanol effort because it is politically unbeatable to reward corn growers and grain handlers who are a formidable force in US politics. Indeed, requirements for ethanol in America have created a more rigid fuel supply system that actually raises the price of oil products, although ethanol's backers originally claimed they would cut energy costs. That same political force also blocks imports of cheaper Brazilian ethanol. In principle, a better approach is so-called "cellulosic ethanol", which promises lower costs as it converts whole plants into ethanol rather than just the grain. But like most messiahs, its attraction lies in the future. So far, nobody has made the system work at the scale of a commercial refinery.

The best way to temper oil demand today is by lifting efficiency. Even this economic winner is politically difficult to implement. The US, which consumes one-quarter of the world's oil, has not changed fuel efficiency standards for new cars in 16 years. Every big economy - even China's - has stricter fuel economy rules than America's. Political gridlock has stymied even modest proposals to allow trading of efficiency credits. A trading scheme is politically inconvenient as it could force US carmakers (which make generally inefficient cars) to buy valuable credits from foreign brands. No politican wants to multiply Detroit's problems.

Even better ideas - such as a stiffer petrol tax - stay stuck on opinion pages of newspapers and in academic journals. Despite what is increasingly termed today's "energy crisis", these ideas barely cross the lips of politicians who want to remain viable among the thicket of anti-tax conservatives and pro-Detroit lobbyists.

The approaches needed for natural gas are quite different. In western Europe, which has long depended on imported gas from Russia, Algeria and a few smaller suppliers, the vulnerabilities are particularly stark. In principle, though, gas dependencies are easier to manage than oil because gas has rivals for each of its major uses. In electric power generation, countries must preserve diversity - ensuring, for example, that advanced coal and nuclear technologies remain viable. While "diversity" is motherhood in energy policy, in reality it requires difficult choices. In continental Europe, for example, policy-­makers have not seriously confronted the conflict between the need for diversity while, at the same time, opening the power sector to morecompetition. Historically, companies in competitive power markets have invested heavily in gas because gas plants are smaller and require less capital than coal or nuclear plants.

Gas suppliers who dream of extending their powers forget that it is harder to corner gas markets when users have a choice. Algeria learnt that lesson in 1981 when it left a key pipeline empty in a pricing dispute with Italy - extracting a better price at the time but losing billions of dollars for the future by destroying its reputation as a reliable supplier.

That lesson should be sobering for Russia today. In December, Gazprom, Russia's giant state gas company, cut deliveries to Ukraine, which then siphoned supplies that flow on to Europe. The company rattled its pipes again last month - threatening retaliation if Europe dared try to wean itself from Russia's gas. While Gazprom's management must pander to Russian nationalism (where pipe-rattling is welcome), the company's long-term viability rests on its reliability as a supplier to lucrative west European markets. Similarly, the recent decision by Evo Morales, Bolivia's president, to nationalise his country's gas fields will give him a boost domestically and might generate some instant extra revenue, but it will also encourage his customers in Brazil and Argentina to look elsewhere for energy.

"Resource nationalism" is back in vogue. But for gas suppliers in particular, it usually ends badly - not least because the infrastructure is costly to build and buyers can afford to be choosy. Gas users can further subdue Russia's rattling by multiplying sources of supply. A robust market for liquefied natural gas will help.

The tendency for gridlock in energy politics means that policymakers must focus where tough decisions matter most, such as efficiency in the use of oil and diversity in the application of gas. Yet, prospects for serious policy are poor - not least because the US, which should be a leader, is the most hamstrung. Luckily, the markets are responding on their own - albeit slowly and patchily. Costly oil is encouraging conservation and new supplies; LNG is accelerating, and gas buyers are more wary of Russian gas than they were a decade ago when Russia was seen as a reliable supplier. If the political structure remains dysfunctional on matters of energy, then the best second is perhaps no policy at all.

For over ten years, two research groups in Brazil have been publishing conflicting reports on the status of emissions from hydroelectic power plants. While both agree that dams do produce greenhouse gases, the two teams dispute one another's methods and the magnitude of results. Because emissions from dams are significantly more complicated than emissions from thermal power plants, the issue has become so specialized as to be ignored by many policy planners.

In The Dam Debate and its Discontents, we evaluate the divergent arguments on methods. While at first glance the issue seems far from being resolved, we find that the pieces are in place for a resolution. Specifically, we suggest international oversight to help converge research results and boost confidence in new findings.

The Brazilian government is declaring victory in its decades-long struggle to become self-sufficient in the supply of oil. The milestone is cause for celebration in a country that has long paid a high price for imported energy.

It will also reverberate here in the United States where policy-makers, too, are trying to wean the nation from costly imports, jittery markets and the foreign spigot. But we must learn the right lessons. Brazil's success came not from treating oil as an addiction but by producing even more of the stuff and by becoming even more dependent on world markets

Here in the United States, most attention to Brazil's fuel supply has focused on the country's aggressive program to replace oil with ethanol that is made by fermenting homegrown sugar. American newspapers are filled with stories about Brazil's famous "flex fuel" vehicles that make it easy to switch between ethanol and conventional gasoline.

Guided partly by Brazil's apparent success, American policy-makers are crafting new mandates for ethanol, and flex fuel vehicles are now taking shape. We have the impression that ethanol is king.

In reality, ethanol is a minor player in Brazilian energy supply. It accounts for less than one-tenth of all the country's energy liquids.

The real source of Brazil's self-sufficiency is the country's extraordinary success in producing more oil. After the 1970s oil shocks, when Brazil's fuel import bill soared, the government pushed Petrobras, the state-controlled oil company, to look asunder for new energy sources.

Petrobras delivered, especially at home, where the firm pioneered the technologies that make it possible to extract oil locked in sediments under the seabed in extremely deep water. In the middle 1970s Brazil struggled to produce just 180,000 barrels of oil per day while importing four times that amount. Today it produces about 2 million and is self-sufficient. Indeed, the current milestone of self-sufficiency arrives with the inauguration of Brazil's newest deep water platform, the "P50." When P50 reaches its full output later this year, that one platform will deliver more liquid to Brazil than the country's entire ethanol program.

Brazil's self-sufficiency offers three lessons for U.S. energy policy:

-First is that ethanol, with current technology, will do little to sever our dependence on imported energy. Today's approach involves growing a crop - sugar in Brazil, corn in the United States - and then fermenting the fruits to yield fuel. Sugar plants in Brazil's climate are a lot more efficient at converting sunlight to biomass than is corn in the Midwest, but U.S. policy nonetheless favors corn (and imposes tariffs on imported sugar) because the program is really a scheme to deliver heartland votes rather than a commercially viable fuel.

Yet, even with Brazil's favorable climate and sugar's inviting biology, ethanol is already reaching the limit. That's because the land and other resources devoted to ethanol can be put to other uses such as growing food and cash crops.

Indeed, today the Brazilian government is actually reducing the share of ethanol that must be blended into gasoline because sugar growers prefer to make even more money by selling their product as sugar on the world market rather than fermenting it into alcohol.

New technologies - notably "cellulosic biomass"- could breathe fresh life into ethanol and replace still more oil. Cellulosic biomass is intriguing because it cuts costs by allowing the entire plant - the cellulose in the stalks, as well as the prized grain or sugar - to be fermented into fuel.

Advocates for this technology, including President Bush in his State of the Union address, have wrongly confused the sexy promise of this new-fangled approach to making ethanol with the practical realities of fuel markets. Schemes to produce cellulosic biomass, today, work only under special circumstances and nobody has delivered the fuel at the industrial scale that would be required for the technology to become commercially viable.

-Second, we should learn that, for now, the greatest force to loosen the world's oil markets lies with oil itself. We can use oil more efficiently, as would occur with a gasoline tax or wise fuel economy standards. But we can also find ways to produce more of the stuff - as Brazil did with Petrobras.

The problem for U.S. policy-makers is that the richest veins for new production lie mainly outside the United States and beyond our direct control.

Indeed, the Brazilian government made Petrobras more efficient by putting the firm partly beyond its control as well. When the government sold part of the company on international stock exchanges, it accepted Western accounting procedures and other strictures that have given Petrobras the autonomy and accountability to its shareholders that, in turn, helped make it an efficient company.

We have a stake in seeing other countries do the same - from Algeria to Mexico to Iran and even Russia. But we must remember that Brazil did this on its own, in response to internal pressures for reform, with little leverage from foreign governments.

-Third, we should learn from Brazil not to confuse the goal of greater self-sufficiency with the illusion of independence. Even as Brazil has become self-sufficient it has also, ironically, become more dependent on world markets. That's because the Brazilian government has wisely relaxed price controls so that the prices of fuels within the country are set to the world market. Thus Brazilians see real world prices when they fill up at the pump, and the decisions about which cars to buy and how much to drive reflect real costs and benefits of the fuel they consume. That is why, even as the country becomes self-sufficient, Brazilians are working ever harder to be more frugal with oil - because the price at the pump is high and rising.

Dependence on oil is a liability that must be managed. But it is not an addiction.

Efficiency, sober policies toward modest alternatives such as ethanol, and more production - all tools of the manager, not the addict - are required. Brazil helps show the way, but only if we learn the right lessons.

This past autumn the Freeman Spogli Institute for International Studies (FSI) in conjunction with the Woods Institute for the Environment launched a program on Food Security and the Environment (FSE) to address the deficit in academia and, on a larger scale, the global dialogue surrounding the critical issues of food security, poverty, and environmental degradation.

"Hunger is the silent killer and moral outrage of our time; however, there are few university programs in the United States designed to study and solve the problem of global food insecurity," states program director Rosamond L. Naylor. "FSE's dual affiliation with FSI and the new Stanford Institute for the Environment position it well to make significant steps in this area."

Through a focused research portfolio and an interdisciplinary team of scholars led by Naylor and CESP (Center for Environmental Science and Policy) co-director Walter P. Falcon, FSE aims to design new approaches to solve these persistent and under-prioritized problems, expand higher education on food security and the environment at Stanford, and provide direct policy outreach.

Productive food systems and their environmental consequences are at the core of the program. While many of these systems are global in character, but they are influenced significantly by differing food objectives, income level, and instruments among nations. The program thus seeks to understand the food security issues that are of paramount interest to poor countries, the food diversification challenges that are a focus of middle-income nations, and the food safety and subsidy concerns prominent in richer nations.

Chronic hunger in a time of prosperity

Although the world's supply of basic foods has doubled over the past century, roughly 850 million people (12 percent of the world's population) suffer from chronic hunger. Food insecurity deaths during the past 20 years outnumber war deaths by a factor of at least 5 to 1. Food insecurity is particularly widespread in agricultural regions where resource scarcity and environmental degradation constrain productivity and income growth.

FSE is currently assessing the impacts of climate variability on food security in Asian rice economies. This ongoing project combines the expertise of atmospheric scientists, agricultural economists, and policy analysts to understand and mitigate the adverse effects of El Niño-related climate variability on rice production and food security under current and future global warming conditions. As a consequence of Falcon and Naylor's long-standing roles as policy advisors in Indonesia, models developed through this project have already been embedded into analytical units within Indonesia's Ministry of Agriculture, the Planning Ministry, and the Ministry of Finance.

"With such forecasts in hand, the relevant government agencies are much better equipped to mitigate the negative consequences of El Niño events on incomes and food security in the Indonesian countryside," explain Falcon and Naylor.

Food diversification and intensification

With rapid income growth, urbanization, and population growth in developing economies, priorities shift from food security to the diversification of agricultural production and consumption. "Meat production is projected to double by 2020" states Harold A. Mooney, CESP senior fellow and an author of the Millennium Ecosystem Assessment. "In China alone, meat consumption has more than doubled in the past generation." As a result, land once used to provide grains for humans now provides feed for hogs and poultry.

These trends will have major consequences on the global environment-affecting the quality of the atmosphere, water, and soil due to nutrient overloads; impacting marine fisheries both locally and globally through fish meal use; and threatening human health, as, for example, through excessive use of antibiotics.

An FSE project is looking at these trends as it relates to intensive livestock production and assessing the environmental impacts to gain a better understanding of the true costs of this resource-intensive system. A product of this work recently appeared as a Policy Forum piece in the December 9, 2005, issue of Science titled "Losing the Links Between Livestock and Land".

Numerous factors have contributed to the global growth of livestock systems, lead author Naylor notes, including declining feed-grain prices, relatively inexpensive transportation costs, and trade liberalization. "But many of the true costs remain largely unaccounted for," she says. Those costs include destruction of forests and grasslands to provide farmland for corn, soybeans, and other feed crops destined not directly for humans but for livestock; utilization of large quantities of freshwater; and nitrogen losses from croplands and animal manure.

Naylor and her research team are seeking better ways to track all costs of livestock production, especially the hidden ones related to ecosystem degradation and destruction. "What is needed is a re-coupling of crop and livestock systems," Naylor says. "If not physically, then through pricing and other policy mechanisms that reflect social costs of resource use and ecological abuse."

Such policies "should not significantly compromise the improving diets of developing countries, nor should they prohibit trade," Naylor adds. Instead, they should "focus on regulatory and incentive-based tools to encourage livestock and feed producers to internalize pollution costs, minimize nutrient run-off, and pay the true price of water."

Looking ahead

The future of the program on Food Security and the Environment looks bright, busy, and expansive. While a varied portfolio of projects is in line for the upcoming year, a strong emphasis remains in the area of food security. Building on existing research at Stanford, researchers are identifying avenues for enhancing orphan crop production in the world's least developed countries-crops with little international trade and investment, but with high local value in terms of food and nutrition security. The work seeks to identify advanced genetic and genomic strategies, along with natural resource management strategies, to improve orphan crop yields and stability, enhance crop diversity, and increase rural incomes through orphan crop production.

Another priority area of research centers on the development of biofuels. Biofuels are becoming increasingly a part of the policy set for world food and agriculture. As countries such as the United States seek energy self-reliance and look for alternatives to food and feed subsidies under WTO (World Trade Organization) rules, the conversion of corn, sugar, and soybeans to ethanol and other energy sources becomes more attractive. New extraction methods are making the technology more efficient, and crude oil prices at $60 per barrel are fundamentally changing the economics of biomass energy conversion. A large switch by key export food and feed suppliers, such as the United States and Brazil, to biofuels could fundamentally alter export prices, and hence the world food and feed situation. A team of FSE researchers will assess the true costs of these conversions.

The FSE program recently received a grant through the Presidential Fund for Innovation in International Studies to initiate new interdisciplinary research activities. One such project links ongoing research at Stanford on the environmental and resource costs of industrial livestock production and trade to assess the extent and rate of Brazil's rainforest destruction for soybean production. "Tens of millions of hectares of native grassland and rainforest are currently being cleared for soybean production to supply the global industrial livestock sector," says Naylor. A significant share of Brazil's soybeans is being shipped to China, where rapid income growth is fueling tremendous increases in meat consumption."

A team of remote-sensing experts, ecologists, agronomists, and economists will be looking at the ecological effects on the landscape through biogeochemical changes and biodiversity loss, the impacts of land clearing on the regional hydrologic cycle and climate change, the economic patterns of trade, and the role of policies to achieve an appropriate balance between agricultural commodity trade, production practices, and conservation in Brazil's rainforest states.

"I'm extremely pleased to see the rapid growth of FSE and am encouraged by the recent support provided through the Presidential Fund for Innovation in International Studies," states Naylor. "It enables the program to engage faculty members from economics, political science, biology, civil and environmental engineering, earth sciences, and medicine-as well as graduate students throughout the university-in a set of collaborative research activities that could significantly improve human well-being and the quality of the environment."