Biofuels may be a non issue

May 23, 2009

Biofuels is a topic that divides many people. To some, it is a solution to reduce dependence on oil, and to others it is an insane idea.
I do not think that biofuels will be a discussion topics for very long, and here is why.
Very likely, the future of cars will be electricity. Inevitably, at some point oil prices will rise again to very painful levels and stay there. This is what will make alternative energy sources economically interesting, even without government subsidies.
One of the major opposition to the electric car is being handled in a very smooth way by the Obama administration. General Motors and Chrysler were strong opponents of the electric car, and helped send it to the landfill for a while, but neither company is around anymore. The Obama administration just put an end to the outdated automobile gas guzzler model once and for all, with the new regulations on gas mileage and car emissions. Fact is that an important page has been turned for good.
Just realize that if all US cars have a similar mileage as their Europeans counterparts, the gasoline use would reduce to substantial amounts, in the vicinity of an equivalent of 80-100 million cars less (old US mileage standards). Normally, this should make the price of oil drop, therefore reducing the need for biofuels. And when oil prices increase again, then electricity will take over.
Other signs that biofuels do not have that much of a future is the lack of excitement from the investment community for it. Wind energy attracts investors (for instance think of Boone Pickens’s energy plan). Solar energy attracts investors. But biofuels? The main party that seems to be pushing for it is Brazil, for internal reasons mostly.
The fundamentals do not look good for biofuels, either. They score negatively on all three bottom line criteria.
As such, this is good news for food supplies. If biofuels made out of edible grains do not have much of a future, the situation is different when it comes to biofuels made out of cellulose. These probably have a decent future, as they do not compete with human consumption, and can be a good way of using and recycling materials that further would be of little interest.

Copyright 2009 The Happy Future Group Consulting Ltd.


Bioethanol: Solution or Problem?

May 19, 2009

Opinions seem to be quite diverse about using bioethanol as a fuel.
So is bioethanol a solution or a problem?

My view is that it will not solve the CO2 emission problem. All it can do is to reduce dependence on fossile fuel, but that is a very temporary relief, which has more to do with politics.
It is quite likely that a massive production of bioethanol will have more negative consequences than positive ones.
Using agricultural land to feed our cars instead of meeting the increasing demand for food as the world population increases strongly rises questions, especially ethically ones. Of course, a way of coping with this would be to turn more land from its current use into agricultural land, but that probably will result in more environmental discussable practices such as excessive deforestation.
I would love to see a thorough and comprehensive study of all the consequences, positive as well as negative, to know where bioethanol might lead us. What will the impact be on gas emissions? What will be the impact on fuel costs? What will be the impact on agricultural and food prices? So far, I have only read opinions and I haven’t found such research.

As long as this stays this way, I will choose the principle of precaution and favor policies that encourage people to cut their energy use instead of getting massively and blindly in something that appears to me as an illusion.

Copyright 2009 The Happy Future Group Consulting Ltd.