Tuesday, October 16, 2007

Well Said...

I guess I'm what you'd call a fan of the BiobasedNews.

Why? Well an editorial that popped up today sums up my feelings very well. This seems to happen often with their news service (they are great content filters). Its great to feel like your in good company.

Peter Nelson, BioDimensions in an editorial called "The Big Question Mark":

A few years ago I saw a chart from Royal Dutch Shell that showed projected sources of energy production over the next hundred years. The chart showed a rising percentage in the use of solar, wind, biomass as well as coal, nuclear and/other more traditional sources. However the most interesting element was the top twenty to thirty percent had a big question mark.

The question mark represented the quantity of energy that would be produced over the coming decades from technologies and innovations that have yet to be discovered. I loved this chart because it captured the idea that we so often forget – that the emerging green/renewable revolution is only in its infancy and that there will be amazing and unknown opportunities for biobased products as other markets

As I have written before, so many of the arguments involving ethanol or other ideas are in so many ways the same as early arguments about the viability of computers when they were still the size of a small house. As efficiencies and new technologies were discovered, the possibilities broadened. For instance, I am constantly pointing out the need to capture the highest value for each plant component, as well as the need to dramatically expand the types of feedstocks available, each with their own unique characteristics.

Its worth the read.

In particular he captures the opportunity in the value added products far beyond just commodity biofuels. Remember, that's where all refining must go to stay competitive in a mature market.

Either a refining operation must own below market feedstocks or above market profit niches to sell into. Otherwise price inversions will do away with a refinery operating at the barest margin. Look to the value added technologies or business models that broaden the possibility of the industry. Those players will be the paradigm shifters.

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