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Call to Action for a Truly Sustainable Renewable Future
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-Include high octane/high ethanol Regular Grade fuel in EPA Tier 3 regulations.
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-Start an Apollo-type program to bring New Ideas to sustainable biofuel and …

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Oil Instability Giving New Life to Biofuels?

Submitted by on March 7, 2017 – 8:04 pmNo Comment

by Douglas L. Faulkner (Biofuels Digest)  Robert McNally, the author of the new, critically-acclaimed book, “Crude Volatility: The History and the Future of Boom-Bust Oil Prices”, believes that global oil markets are entering an epic, structural shift to a protracted new era of wildly fluctuating crude prices. The reason is that the market now lacks a swing producer to level out production and demand shifts. In his view, we are in for an extended period of prices oscillating “in a range well below $30 and above $100” per barrel – – with the crunch starting maybe as early as the 2020s.

What does this mean for the biofuels industry?   If Mr. McNally is right and the wild swings we have seen in the last decade – – up to $145/barrel and down to $26 in just eight years – – are the new norm, then oil’s reliability as a transportation fuel will increasingly be called into question and the search for alternatives will accelerate. After all, oil’s reputation as a reliable transportation fuel depended not only on its abundance, but also its stable pricing.

These fast-approaching, fast-changing shifts in oil markets are only now starting to dawn on policymakers – – with implications even more clouded. But, several points can be drawn already:

3. At a time when new oil production in key areas is already in question (see recent announcements about Canadian tar sands and the Arctic, for example) alternatives to petroleum could help modulate global oil price swings in the coming decades.

Many questions remain unanswered though about biofuels’ ability to fill the breach, including uncertainties over: lead times for advanced biofuels commercialization; their acceptance by and adaptability to legacy industries; future fuel demand from new drivers; and, government’s ability to adjust old approaches for biofuels promotion to new political, social economic, environmental realities.

Nonetheless, the time is clearly ripe to test Mr. McNally’s thesis as well as explore analytically all its implications, especially that of a potential new growth era for biofuels.

In any event, old arguments for biofuels, mixing oil import reductions, rural development and environmental cleanup have gone stale. The emerging new oil market reality underscores the need for a fresh rationale I have urged in this space before: biofuels can be the West’s crucial insurance policy in an unstable and uncertain world, buying time for new technologies while mitigating oil market chaos and environmental disruptions.

A new bipartisan consensus will take some time to form, but it clearly needs to revolve around a renewed national (and global) commitment to the expansion of sustainable biofuels production without such a heavy reliance on the old central government formula of mandates, subsidies, debt and regulation.

This out-of-the-box thinking could even involve consideration of new legislation making bioenergy a true national priority ….  READ MORE

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