October 5, 2011
October 5, 2011
The corn industry goes toe-to-toe with the sugar industry, for the use of the word “sugar.”
The idea that high-fructose corn syrup infuses lots of our food has left a bitter taste in many consumers’ mouths. So the corn industry has started a public relations campaign on behalf of its beleaguered syrup in an attempt to rename the additive as “corn sugar.”
But a civil lawsuit in federal court seeks to stop the renaming. An effort from public health advocates to try to keep the corn industry honest? Nope, the suit was filed by the giants of the sugar industry to protect their brand. The squabble has pitted sugar producers and processors like American Sugar Refining and Imperial Sugar versus corn refining giants like Archer Daniels Midland and Cargill.
Taylor Orr wrote in January ( ) about the facts and myths of high-fructose corn syrup. The additive has been blamed for obesity and other health problems, but Orr found that studies have been inconclusive.
Nevertheless, corn syrup has taken its lumps in public, and companies are taking notice: Hunt’s Ketchup and Pepsi, for example, have dropped the additive and are marketing the change, promoting “real sugar” or “no high-fructose corn syrup” on their packaging.
The federal Food and Drug Administration hasn’t made a decision on whether to approve the name change. Still, it scolded the industry for using “corn sugar” in its advertising. The FDA can take action if food companies were to use a new name on a product, but they can only scold when it comes to the industry’s ads.
Judge Consuelo Marshall of the United States District Court, Central District of California is currently responding to a motion from the defendants to dismiss the case. (Read the plaintiffs’ complaint here, and the defendants’ motion to dismiss here.)
“The only sweetener that may be labeled simply as ‘sugar’ is the natural sucrose found in sugar cane and sugar beet plants,” the sugar companies’ lawyers argue in their filing. “Humans have used sugar for millennia to sweeten food and drink. … High-fructose corn syrup, on the other hand, is a processed syrup mixture created by enzymatically converting dextrose into varying amounts of fructose, the percentage of which can be controlled according to the preferred industrial use.”
In order to make the distinction between sugar and the additive, plaintiffs point to the studies that “demonstrate a likely causal link between high-fructose corn syrup consumption and obesity, hyperlipidemia (high cholesterol), hypertension, and other health problems that is not equally presented by the consumption of sucrose.”
The sugar lawyers continue, “Seeking to co-opt the goodwill of ‘sugar’ and even changing the high-fructose corn syrup name by calling it a kind of sugar to sidestep growing consumer sentiment is paradigmatically false and misleading advertising for several reasons.”
Besides wanting the new name nixed, the sugar industry seeks various damages, including compensation for “monetary expenditures … that plaintiffs have made and will be required to make on corrective advertising and education to inform the consuming public of the truth…”
October 5, 2011
FOR more than a decade educators have been expecting the Internet to transform that bastion of tradition and authority, the university. Digital utopians have envisioned a world of virtual campuses and “distributed” learning. They imagine a business model in which online courses are consumer-rated like products on Amazon, tuition is set by auction services like eBay, and students are judged not by grades but by skills they have mastered, like levels of a videogame. Presumably, for the Friday kegger you go to the Genius Bar.
It’s true that online education has proliferated, from community colleges to the free OpenCourseWare lecture videos offered by M.I.T. (The New York Times Company is in the game, too, with its Knowledge Network.) But the Internet has so far scarcely disturbed the traditional practice or the economics at the high end, the great schools that are one of the few remaining advantages America has in a competitive world. Our top-rated universities and colleges have no want of customers willing to pay handsomely for the kind of education their parents got; thus elite schools have little incentive to dilute the value of the credentials they award.
Two recent events at Stanford University suggest that the day is growing nearer when quality higher education confronts the technological disruptions that have already upended the music and book industries, humbled enterprises from Kodak to the Postal Service (not to mention the newspaper business), and helped destabilize despots across the Middle East.
One development is a competition among prestige universities to open a branch campus in applied sciences in New York City. This is Mayor Michael Bloomberg’s attempt to create a locus of entrepreneurial education that would mate with venture capital to spawn new enterprises and enrich the city’s economy. Stanford, which has provided much of the info-tech Viagra for Silicon Valley, and Cornell, a biotechnology powerhouse, appear to be the main rivals.
But more interesting than the contest between Stanford and Cornell is the one between Stanford and Stanford.
The Stanford bid for a New York campus is a bet on the value of place. The premise is that Stanford can repeat the success it achieved by marrying itself to the Silicon Valley marketplace. The school’s proposal (unsubtly titled “Silicon Valley II”) envisions a bricks-and-mortar residential campus on an island in the East River, built around a community of 100 faculty members and 2,200 students and strategically situated to catalyze new businesses in the city.
Meanwhile, one of Stanford’s most inventive professors, Sebastian Thrun, is making an alternative claim on the future. Thrun, a German-born and largely self-taught expert in robotics, is famous for leading the team that built Google’s self-driving car. He is offering his “Introduction to Artificial Intelligence” course online and free of charge. His remote students will get the same lectures as students paying $50,000 a year, the same assignments, the same exams and, if they pass, a “statement of accomplishment” (though not Stanford credit). When The Times wrote about this last month, 58,000 students had signed up for the course. After the article, enrollment leapt to 130,000, from across the globe.
Thrun’s ultimate mission is a virtual university in which the best professors broadcast their lectures to tens of thousands of students. Testing, peer interaction and grading would happen online; a cadre of teaching assistants would provide some human supervision; and the price would be within reach of almost anyone. “Literally, we can probably get the same quality of education I teach in class for about 1 to 2 percent of the cost,” Thrun told me.
The traditional university, in his view, serves a fortunate few, inefficiently, with a business model built on exclusivity. “I’m not at all against the on-campus experience,” he said. “I love it. It’s great. It has a lot of things which cannot be replaced by anything online. But it’s also insanely uneconomical.”
Thrun acknowledges that there are still serious quality-control problems to be licked. How do you keep an invisible student from cheating? How do you even know who is sitting at that remote keyboard? Will the education really be as compelling — and will it last? Thrun believes there are technological answers to all of these questions, some of them
being worked out already by other online frontiersmen.
“If we can solve this,” he said, “I think it will disrupt all of higher education…”
In about a week, the Afghan Ministry of Mines will announce that the China National Petroleum Corp. (CNPC) — the largest state-owned Chinese company — has won the rights to develop and explore several oil fields in the Amu Darya basin in northern Afghanistan.
How was CNPC able to win a tender for such a strategic resource in a country where the United States wields tremendous influence? Amazingly, one reason is that the U.S. Defense Department, whose Task Force on Business and Stability Operations, which is charged with resuscitating the economies of Afghanistan and Iraq, designed and oversaw a tender process that played to the strengths of Chinese state-owned companies over Western private ones.
The Chinese government has been actively pursuing various natural resources in Afghanistan for years. In 2007, a consortium of Chinese state-owned companies won the only other major natural resources tender in Afghanistan to date, for the massive Aynak copper deposit, thought to be worth as much as $80 billion. Over the last decade, China has sought to lock down as many natural resources as possible throughout Central Asia to fuel its skyrocketing demand for minerals, oil, and gas.
It was in this broader context that the task force took control of the oil tender in northern Afghanistan. Since 2006, the task force has been encouraging private investment, industrial development, and energy development in Afghanistan and Iraq in a bid to build sustainable economies that can survive the looming drawdown of international forces and reduction in foreign assistance in both countries.
Natural resources are an important pillar of this mission because they hold the promise of generating meaningful revenues for the cash-starved Afghan government. In 2009, the task force commissioned the U.S. Geological Survey to conduct a comprehensive review of Afghanistan’s geological riches, the preliminary results of which were announced in 2010 and showed that Afghanistan might contain more than $1 trillion in mineral wealth. This story was reported in news outlets worldwide and stoked considerable interest in Afghanistan. The task force then set out to design a process by which these resources should be tendered by the Afghan government, embedding myriad advisors — ranging from energy experts and financial consultants to lawyers — within the Afghan Ministry of Mines.
The Amu Darya tender was the first real test case. The tender covered an area of roughly 4,500 square kilometers between the towns of Sar-e-Pol and Sheberghan in northern Afghanistan, with five known fields containing an estimated 80 million barrels of crude oil — about enough to supply 11,000 barrels per day for 20 years.
Our firm assisted a Western oil and gas company that participated in the tender, but lost to CNPC. We saw firsthand how the commercial terms that would govern the development of the oil as well as the procedures for selecting the winning bidder made it all but impossible for a Western company to win the tender against CNPC.
The terms offered by the Afghan government — and designed, in large part, by the task force — did not reflect realities on the ground in Afghanistan. The key term in any production-sharing contract is the profit split, which identifies what share of oil produced belongs to the government and what share belongs to the oil company. This split is based on a variety of factors, including the quality and quantity of the oil, the technical challenge of recovering the oil, the quality of local infrastructure, and the security and political risk of the region where the oil is located. Where there is less overall risk — such as when there is plentiful, high-quality oil that is easy to access and move in a safe environment — the government receives the lion’s share of the profit oil. As risk increases, however, oil companies demand more profit oil to ensure an adequate rate of return on the capital invested.
In Central Asia, the norm is for the government to receive roughly one-third of the profit oil and for the oil company to receive the remainder. Yet in Afghanistan — one of the riskiest countries in Central Asia, with incomplete geological data and the near absence of key infrastructure — the task force pushed for a profit split that would give the Afghan government the majority of the profit oil. This was in addition to royalties and several other taxes included in the agreement, all of which are entirely atypical in Central Asia…