Biofuel debate heats up
While yesterday was Chinese New Year (Wu Zi, or Year of the Rat), this year may also become known as the year of biofuel. Testimony is on-going in the U.S. Senate this week in the Energy and Natural Resources Committee on Energy Market Effects of the Renewable Energy Standard. Bob Dinneen, president of the Renewable Fuels Association testified yesterday on the 2007 Energy Act recently signed by President Bush. In that legislation, 36 billion gallons of biofuels are now required by law to be used annually in the U.S. by 2022. And General Motors also announced this week that more than half of its vehicles will be biofuel-compatible by 2012. Construction of biofuel production is also expanding—137 current plants, 62 under construction, and 8 being expanded—with some experts stating that production capacity will actually exceed raw material supply as early as this year—i.e., more ‘refineries’ than corn to supply them.
All of this biofuel intensity is obviously focused on the diminishing reserves of petroleum stocks, the current $100/barrel costs, the dramatically increasing demand for oil-based fuels in Asia, and the need to be financially independent for fuel supplies. Added into this mix are the increasing calls for fuels that don’t add to the climate-warming situation. But here too there are outcries that increased biofuel usage could actually increase the emissions responsible for global warming. Additional critics are citing the reduction of food-based crops—in favor of fuel-based crops—and the resulting higher market prices and their effects already on the impoverished citizens of the world.
The global biofuel business has very quickly become a politically charged, economically motivated, and technologically intense industry. We expect to see a whole lot of more news, debate, and activity in this area throughout the year.
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