Rising biofuel demand and the falling value of the dollar is likely to create a shortage of U.S. grain supplies this year, according to Purdue Univ. agricultural economist Chris Hurt. The current situation is reminiscent of the run on U.S. grain in the early 1970s, which resulted in an embargo on foreign grain shipments. Even though the 2007 wheat crop is sold out and soybeans are in short supply, Hurt doesn't expect an embargo this year but he does expect continuously rising grain prices-an economic outcome welcomed by producers, but not users.

Alternative energy research, such as that for biofuels, is rapidly increasing-Virgin Atlantic test flew a 747 on a mix of coconut and palm oils this past weekend-as a hedge against diminishing petroleum stocks and environmental concerns. And last week, a Spanish company announced the planned construction of a massive solar plant in Arizona. It is indeed encouraging to see this increasing emphasis on alternative energy programs.

As in the biofuel situation, economics will play a strong role in the application of the extremely complex and global alternative energy environment. The environmental impact and long-term capabilities of each program will also be the subject of much debate. Climate change-a causal factor in the development of alternative energy sources-should itself be considered in the eventual life cycle of these programs. Proponents and opponents of each program are likely to have very vocal arguments that legislators, public utility administrators, and research managers will have to wade through.