Alternative Energy

Alternative Energy

Alternative energy news, and information about renewable energy technologies.

Aug 05

Bio-Fuel Market Set to Grow by 1,000%

Posted in Biofuels | Energy Economy | Energy Industry

Biofuel Market Middle Eastern oil sheiks move over. There’s a new kid on the energy block! Bio-fuel is the new green, completely clean fuel source. It’s also known as “agro-fuel” and can be broadly defined as any solid, liquid or gas fuel consisting of or derived from biomass. Biomass is nothing more than materials that were recently living organisms—in this case, plants and their by-products. Even better, it is a renewable energy source, unlike petroleum and coal, which once used are gone forever. Thanks to a new miraculous feat of engineering and science, this energy source has suddenly become competitive with oil, catapulting it from a backyard business into a global economic phenomenon.

Right now, bio-fuels are capturing about $23 billion of the $1.3 trillion we spend each year to power our cars, trucks, airplanes, trains and ships. That’s just two percent of the market with an astounding 98 percent upside. To say we’re at the forefront of a growth curve is an understatement.

Is the bio-fuel market set to grow by 1,000 percent? One Brazilian company planning to spend $54 billion on this new fuel by 2010 sure thinks so.

The fact is that major governments from the world over have practically guaranteed this revolution by writing it into law. The U.S., the E.U., Japan and China have all passed statutes mandating that bio-fuel be increasingly used to replace crude oil products in order to reduce emissions and to reduce dependence on foreign crude.

The market for bio-diesel is also growing at a phenomenal rate. Consumption in the U.S. grew from 25 million gallons in 2004 to 78 million in 2005, a 300 percent increase in one year! In the U.S. alone, more than 80 percent of commercial trucks and city buses run on diesel, making the potential U.S. market for biodiesel huge.

Ethanol fuel, made from ethyl alcohol, is one such bio-fuel alternative to gasoline. It is easy to manufacture and process and can be made from very common crops grown in the United States such as sugar cane and corn, which reduce the need for imported foreign crude.

In fact, with ethanol, billions of gallons of production capacity are under construction right now. The Renewable Fuels Association counts 113 U.S. ethanol distilleries in operation and another 78 under construction.

Ethanol production should increase dramatically over the next couple of years because of the Energy Policy Act of 2005, which set a renewable fuels standard mandating 7.5 billion gallons of annual domestic renewable-fuel production by 2012. Furthermore, refiners will be required to blend bio-fuel into diesel and gasoline supplies.

Even more promising, many U.S. cities and auto manufacturers are taking steps to make ethanol more available. In 2007, Portland became the first U.S. city to require all gasoline sold within the city limits to contain at least 10% ethanol. As of January 2008, Missouri, Minnesota and Hawaii require ethanol to be blended with gasoline motor fuel.

Like with anything else, the bio-fuel industry has its share of critics too. Some of the more common complaints you’ll hear:

  • Ethanol cost too much to produce
  • Switching to Ethanol is Expensive
  • Vehicles running on Ethanol don’t get good mileage

Ethanol cost about $1 a gallon to produce at most facilities. Corn based ethanol is the most common form of ethanol in the United States. Corn is broken down into a useable fuel through a multi-step process of adding water, yeast and other enzymes. The price for corn has increased, but the more we turn to ethanol and other bio-fuels, we’ll start to see greater savings at the pump. The National Resources Defense Council calls corn ethanol “energy well spent.” Furthermore, Japanese scientists are experimenting with other vegetable oil-based fuels to help keep the cost of corn down.

A new car can be made flex-fuel capable for about $35. Ethanol is already being mixed in with the gasoline you put in your car. Auto-makers realize the importance of bio-fuels and are producing more flex-fuel models.

Right now, ethanol-run vehicles get about a quarter less mileage compared to traditional gasoline vehicles. As auto-makers focus on keeping vehicles cleaner and greener, we’re seeing the production of better engines that are able to support and run more efficiently on ethanol and other bio-fuels.

Ford, DaimlerChrysler and General Motors sell flexible-fuel vehicles that can use gasoline and ethanol blends ranging from pure gasoline all the way up to 85% ethanol (E85). By mid-2006, there were approximately six million E85-compatible vehicles on U.S. roads.

Some very prominent names have also shown an interest in the bio-fuels market. Bill Gates recently injected $84 million into one of America’s very few publicly traded bio-fuel pure-plays. Willie Nelson recently launched his own brand of bio-fuel called Bio-Willie. Richard Branson soon followed with his version called Virgin Fuel. Even Larry Page and Sergey Brin, the Google billionaires, recently toured the operations of Brazil’s largest bio-fuel producer.

President Bush was quoted in 2005 as saying, “What people need to hear loud and clear is that we’re running out of energy in America.” With crude oil prices as unpredictable and steep as ever, turning to bio-fuel as an alternative fuel source, one that is clean and can be used over again, is the way to go.”

While little has been done during the current administration and previous ones, the volatility of the oil markets today has resulted in politicians finally giving more than lip service to alternative energy sources.

-James DiGeorgia is editor and publisher of the Gold and Energy Advisor Newsletter (www.goldandenergyadvisor.com) and the author of the popular book, The Global War for Oil.

  • uh no

    This article is bogus.

    Currently the biofuel market is driven by the huge subsidies to given to the farmers by us American tax payers. Landowners in Brazil and other places in the world see how much they can make by selling biofuels to us and salivate. Next thing they are doing it burning their forests to make way for biofuel crops. Not good for the world and not good for us taxpayers.

    The second big problem is that biofuels burn. Burning is bad. Whether it is fossil fuel or biofuels burning leaves all sorts of toxins in the air. We need alternative energy that is really clean. Not biofuel which is merely marketed as green.

    A third problem is the biofuel market can not sustain itself. As soon as the economy goes completely south the subsidies will dry up. The farmers will be left with loans too large to pay off with standard crops. Their land will be bought up from under them by foreigners hoping to make money on their investments on the next up cycle.

    Finally biofuel is bad because it will be introducing genetically altered plants in such vast scales that when the first unforseen problem arises we’ll have already released the equivalent of AIDs into the plant kingdom. It will be too costly to fix and result in a whole new world economy.

    Thanks however to stupid articles like this one we continue to go down this dangerous path.

  • Just Watching

    where will all the water be comming from to raise all this crop for bio fuel. Check what has been happining to this nations water table over the last 50 years and you will see that bio fuel is not sustainable.

  • Just Watching

    We just lost another industry here. 400 more out of work. The Pilgrims pride chicken processing just closed because the price of corn has made feed to expencive. Now the plant is closed the chicken farmers have no market so they have no income. Thanks a lot BIO fuel.

  • Gene

    To the first 3 negative comments on Bio-its easy to pick apart what ever your energy preference may be. Recently in montrey county they harvested there first crop of mustard seed that will go into running public transportation. This crop of mustard seed required no watering or on going care! Cat-tails do well in swampy areas as does sugrout. More productive than corn. There is a world wide meeting in September on the use Jatropha beans that are said to be 10 And reusing old oil is a great use. Crops can be grown in various regions to suit climate and water conditions. The vertical alge ponds are what seems to be the mass production answer. But we would rather spend our money on oil platforms, and nuclear plants that take us into a whole different scenaro of risk management. Try and be positive and see if you can work to solve problems rather than just condemning those who are trying to fix a very big problem.

  • uh no

    Gene, if you feel my points are easy to pick apart then please do so. Instead you side step and talk about mustard seed and such saying they require no watering or on going care. That if you are positive you’ll solve problems.

    I am positive. Crops, mustard or anything else, do require on going care. Try to harvest the same crop for a few years and see what happens!

    There are economical solutions to this very simple energy problem. Clean solutions do exist. Solutions we can use today. No need to make a new huge mess with bio fuels.

    Here’s a clue. Your solar panels will pay for themselves in 7 years if you share with the grid. Since many PV panels are warrantied for 25 years you could think of it as free energy for two decades. Now imagine you use an electric vehicle and power it with a few more PV panels. How about putting up a few 400 watt small windmills on your property and using it to make hydrogen for a hybrid hydrogen/electric car?

    I’m glad you want to be positive. Don’t let big energy confuse you with their “we want to explore diverse alternatives”. There’s no need for this confusion. We’ve moved on. The real confusion lies in getting consumers to just say no to companies wanting to put PV in for “free”. They gurantee you locked electric bills for the next 25 years. The idea is to allow you to be “green” and isolate you from the rising electric costs year after year. Some 75% or more of all new PV is now being done using contracts like this. You’ve got to just say no to this too, take out a loan if needed, and put them in yourselves so that you make a huge profit instead of just locking in prices as they are now. The “Energy Crisis” has been solved cleanly and economically already…

  • Emily

    Dear un no,

    To say you are a negative person is an understatement. We need to diversify our energy sources and bio-fuel will help us to succeed in doing so. Solar, wind and hydro power are great ways to capture natural renewable energy and bio-fuel may not meet the same gold standards but you have to ask yourself “how are the solar panels made? How are they transported?” ect. Nothing is truly green there will always be some kind of environmental impact!

  • Sherry

    We have the knowledge. We have the technology. What we lack is a government who seems capable of devising , supporting, and implementing a plan to free us from our dependence on foreign oil. American’s also on the other hand seem to have a very short attention span. Our economy is going down the tubes and fast. This isn’t the first time, we have been there before. Our memory seems to blot that all out when fuel prices drop we waste no time wasting, producing, buying and using cars that get low mpg etc. Only when it truly hurts us in the pocketbook do we suddenly switch into our conservation mode. We need to be in this for the long haul, permanently and totally. We need to elect a president who will commit to rapid deployment of a plan of energy independence. We need to use every resource available to us to reduce consumption of fossil fuels. We need to take full advantage of natural energy sources such as wind power and solar power. We need to use our technological knowledge of hybrid cars, v2g technologies etc. They all play a vital role in reducing our dependence on foreign oil and improving our environment not to mention relieving our suffering economy.

  • uh no

    Dear Emily,

    We’ve exhausted our hydro unless you are referring to wave motion off the coasts. That technology is so uncertain it’s not worth mentioning in the same sentence as wind and solar. Wind and solar are here and now. Either one can handle all our energy needs. Combined they are overkill. Sure it takes energy to make solar panels and turbines. However the energy they produce is much much greater than the energy used to produce them. NPR has covered this several times on Science Friday.

    I am negative about biofuel. And I’m negative on nuclear. And coal. These three are dead ends. Literally. These technologies would not exist if not for the constant propaganda paid for by special interest groups whom only care about their own profits and not the planet.

  • GaltKnows

    Dear Uh No,

    All burning is not bad and spewing toxins into the air. Gasification which is burning, burns at such a high temperature that it creates new chemical bonds and doesn’t qualify for your sweeping statement that all burning is bad.

    What genetically altered plants are you talking about? We have been eating altered plants for a few decades now but biofuels can be made from already existing plants like algae which is like 50% oil and not altered. The rest can be gasified.

    Check out gasification. There is a great article about it on Treehugger or go check out wood gasification on Youtube. (Don’t be mistaken, it might say wood but anything can be gasified like yard waste, human waste, and any type of biomass).

  • Gigabyte

    Whew wee! I’m sorry, what was your question. I’m a little to busy making billions of dollars to wake you up! We’re working like crazy.


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