A Confluence of Global Factors Creates the Need


A confluence of global factors come together to create the necessity for a supplement to petroleum based transportation fuels. The following three factors are key drivers for the alternative fuel movement:


1. Declining global oil productive capacity combined with a growing oil demand in developing countries provides the most compelling global reason for alternative fuels.  The current strain on petroleum supply has pushed petroleum product prices up to a point where biofuels are competitive and needed to moderate an inveitable upward march of oil prices.   On the oil supply side, there are no major undiscovered oil reserves which can significantly add to global supply.  Maintaining current oil production levels requires the development of more expensive reserve plays and the use of expensive technology (both wise moves, but both also relatively expensive).  On the demand side, we cannot expect to put the growing Chinese and Indian middle class into vehicles without a significant oil price response.  (The Chinese auto market has become the second largest car market in the world, with the potential to move into the number one position before the end of the decade.) Biofuels clearly emerge as a supplement which can be readily introduced into the existing transportation infrastructure.


2. Economic vulnerability resulting from oil’s grip on the transportation sector creates a political incentive to reduce an “addiction to oil.”  The economy of the United States, and others like it, is extremely dependent upon transportation to move parts to factories, goods to stores and people to market.  Transportation, meanwhile, is almost wholly supplied by oil, with a 95 percent market share in the US.  This “oil addiction” becomes an untenable vulnerability when coupled with a gradual shift of remaining global reserves into fewer, and potentially unfriendly, hands.  A global development of biofuels will help address the problem by providing a much broader diversity of supply sources including domestic sources.


3. Global climate change is the third major factor laying the foundation for fuels with a reduced “carbon footprint.” It is now generally accepted that man-made emissions, particularly from the burning of fossil fuels, are contributing to adverse global climate change.  Biofuels have the potential benefit of reduced net life-cycle greenhouse gas production as compared to their petroleum alternatives. This is not to claim that biofuels are environmentally friendly or even carbon negative. In fact, no fuel can truly be considered beneficial to the environment; the only hopeful claim is that the particular fuel, over its full life cycle, is less harmful than the alternative.    

Need for Biofuels

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