better biofuel
The Future Looks Bleak for Biofuels

The next generation of biofuels is floundering, and one of the biggest players in the industry says the promise of these new technologies won’t be realized if oil prices don’t start rebounding. The FT reports:

Advanced biofuel made from agricultural waste — the so called Holy Grail of the alternative energy industry — will not be competitive with conventional fuel until the oil is back to $70-$80 per barrel, DuPont has said. […]

The admission from the US chemicals group, which last week formally opened the world’s largest cellulosic ethanol plant, underscores the challenge facing makers of “second-generation” biofuels. After a decade pursuing an elusive production process, companies are finding their business models threatened by the changing economics of the industry — as well as the politics of the US.

When we speak of the dangers of biofuels and the boondoggle that is our misguided policy attempt to mandate their production, we’re specifically referring to ethanol distilled from corn. This is the most common variety of U.S. biofuel, and far and away the one with the highest quotas—last year corn ethanol made up nearly 80 percent of the biofuels mandated by the Renewable Fuel Standard (RFS).

But advanced biofuels actually do have promise. Unlike their corn cousin, they can be grown in marginal land, so their production doesn’t displace food crops (and therefore send global food prices up, starving the world’s poor). They’re also actually good for the environment and global greenhouse gas emissions, a test corn ethanol fails to pass.

The biofuel industry will hope that government support will make up for the fact that its product can’t compete in today’s fuel market. But rather than funneling government dollars into propping even worthwhile biofuels up, we’d be better served funding the research and development of technologies that would enable ethanol producers to compete on their own merit. Instead, what we have is a woefully inefficient, expensive, and environmentally unfriendly biofuel boondoggle. The sooner we address our RFS problem, the better.

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