Biofuels Faces Tough Prospects
Published: April 17, 2012
Emphasis is shifting among biofuel manufacturers toward chemical production and away from fuel production, according to early presentations at the Advanced Biofuel Leadership Conference held in Washington in early April. The major reasons: bio-chemicals are both easier to produce from biological feedstock and are more valuable than fuels.
“It’s hard, hard, hard,” to produce biofuels that compete with hydrocarbon fuels, said one industrial chemist. He estimated that crude oil would have to reach $ 125 to $ 150 per barrel for biofuels to be competitive. And public support for biofuel production may not be as generous as once expected, now that budget pressures are becoming more stringent.
Amyris CEO John Melo told conference attendees that his company remained committed to producing biofuels while noting that these represent the “highest risk, cost and challenges in scale-up” and require large balance sheets or partners with large balance sheets.
Nevertheless, Secretary of Agriculture Tom Vilsack told attendees that advanced biofuels remain a key component of President Obama’s all-of-the-above strategy to limit the impact that foreign oil has on our economy and take control of the U.S.’s energy future.
On aviation biofuels, The Department of Defense will seek domestic sources of drop-in fuels. But these fuels must be made from feedstock that is not, like ethanol, a food source. These non-food sources include algae, biomasss and many waste products. Prices of food feedstock tend to rise with oil prices, as this feedstock is already used for ethanol production, further hurting the economic case for biofuels.