Thursday, August 27, 2009

Biofuels Going Over the Cliff

The Wall Street Journal published a rather lenghty but interesting article on the state of biofuels in the U.S. (link good for seven days).

The article has an thematic undercurrent that the inability for new biofuel projects to get funded somehow "threatens the green revolution."  I think that is hogwash.  Biofuels hardly represent the green energy revolution.  They are a politically expedient way to win votes in the agricultural heartland.  It falls under the category of, "it sounded good at the time."  The notion that we can grow our way to energy independence using our foodstock is rather silly.  But worse, it distracts decisionmakers from finding real solutions.

The biofuel industry as a whole requires government subsidies to be financially viable.  In 2007 it received subsidies and support of $3.25 billion, more than any other energy source.  According to the article, if you take all of the U.S. supply of vegetable oils and animal fats to make biodiesel, it would only amout to approximately 7% of U.S. diesel demand.  That's not a solution, that's an annoyance.  But that doesn't stop the industry's lobbyists who are trying to extend subsidies and increase the blending percentages.

Biofuels might be able to be a small part of a larger energy portfolio, but the notion that we can farm our way to energy independence is a tale best told by well paid lobbyists to politicians eager for votes.

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