Oil Execs on the Future of Energy Costs

Reported at the Environmental Leader

See the graphic below. The study was based on in-depth phone interviews with more than 50 oil and gas professionals, most holding C-Suite positions at petroleum companies with annual revenues of $100 million or more.



Of note to me. The low number of petroleum executives that believe petroleum is a sustainable energy source. I would really like to know what the motivation for this answer would be. The environmental sense of "sustainable" in reference to CO2 and impact on the environment or the actual long term production (meaning that they can sustainable keep pumping oil out of the ground keeping up with the actual demand for the product).

Usually when oil and gas people talk about sustainability they talk about actual production. Sustainable production is keeping up with demand. So they usually refer to petroleum as a sustainable fuel. Contrast this with environmentalists who refer to "sustainable" as meaning little or no impact on the environment.

I also see this as an interesting contrast with the feelings about US energy independence. If Oil is not sustainable what would be there belief for energy independence? I would assume biofuels development or maybe just something else (those in energy tend to look at technology as an open ended box of hope).

Are these execs saying 'it'll all work out some how' or do they have a consensus inside the industry about an expected future for US energy.

The Future of Algea - Off-Take Production

The future of algae is finding someone willing to pay you to play with it.

I've talked to dozens of start-up entrepreneurs with dreams of phytoplankton business. All these business models with the hopes of developing a new crude oil for the next century. The "crude dreams" of oil production from an endless uber-productive super-algae that would feed the humanity protein as well as feed our insatiable vehicles carbohydrates distilled into ethanol and fats reacted into biodiesel.

The big issue though. How do you pay for the capital cost of a algae bio-reactor? The device that will take water, light, CO2 and make the bugs into an industrial input. Will angels and VC pay for the magical devices that will make algal goo. This goo in turn being cut, distilled, processed, reacted and made into the endless variety of products that we currently source from petroleum.

Deep pockets in this market though are tough to come by. What is now looking apparent is the need for someone already paying to deal with algea. A current cost stream begging for a better solution.

One such industry is commercial fish farms. To that end I came across a recent article that caught my eye. Though this is not a unique idea its still one to watch. What makes it innovative is the fact that the technology might actually work. In the word of biofuels technical talk is cheap and demonstration is worth millions in Federal funding.

From an article from Greenbang.com:

Under PetroSun’s BioFuels Aquaculture Lease Programme, participating farm operators would receive a rent incentive and monthly royalties in return for access to their pond algae. In future, farmers could also gain additional benefits from a carbon credit program, the company said.

PetroSun (a leader in algae technology in the US) has announced what I would call an interesting and very viable business model. To co-locate with fish farms that have an algae maintenance concern. Instead of these farms paying the internal cost to deal with algal growth they will get a return for partnering with PetroSun to create value from the biological reality association with commercial aquaculture.

"We need not to be let alone. We need to be really bothered once in a while. How long is it since you were really bothered? About something important, about something real?"

-Ray Bradbury

The Pickens Plan on 60 Minutes

"We are at war with no guns with energy."
- T. Boones Pickens

Share/Embed

I saw the 60 Minute piece online. It is interesting and bold. The big new idea I'm hearing is a Federal push to build an energy infrastructure much like the major Freeway projects of the 50's. A modern new backbone for wind and solar power to plug these resources into.

By pushing for wind power and new grid infrastructure to plug into this would free up the necessary natural gas for on-road vehicles and freight mobility. I'm hopeful and like the conversation this is spurring.

Dark Humor in the Ethanol Industry

Give this analyst an award for most colorful description of VeraSun Energy's financial condition:

"Last week, ethanol producer VeraSun Energy (VSE) announced it put itself up for sale after blowing its brains out in the corn market."

The article came from SeekingAlpha.com

OEM Made Glycerine Based Coolant Announced

Back in about 2002 I was told by someone the real industrial hope for glycerine was as a coolant.


That with a little creative chemistry glycerine can be formed into Ethelyn Glycol the main ingredient in antifreeze-coolant used in many cars. Upon hearing this I asked a friend of mine who is a turbologist (a lubrication engineer who deals in automotive motor oils and chemicals) what he thought. He told me back in the 30's and earlier glycerine was used as a coolant additive so it was plausible.


And so I wait to see this big savior for nonfood grade industrial off-take to arise. Finally I see a report of a product.


Cummins Filtration (the filter division of Cummins Engine) has rolled out a glycerine based coolant. Cool stuff to say the least (yes pun intended). I saw the original story at the Biobased News.

A Man, His Business Model, and a Paradigm Shifting Approach to the Electric Car.

From Wired Magazine. An interesting and thought provoking idea coming our way from Israel (a nation no doubt distinctly aware of where their economy's petro purchase dollars flow).

Driven: Shai Agassi's Audacious Plan to Put Electric Cars on the Road

Here is the story in a nutshell. The issue with electric cars in the short term is a full large-scale deployment of support. Not just complete with recharging stations but also battery swap out facilities if you need a fully charged battery on short notice for a longer range trip. Also critical is support of fully delveloped and existing auto manufacturers to support electric vehicles. (See diagram below)

So in essence its the story of the Hydrogen Car but with technology immediately available today, full OEM support to roll out electric cars, and a product horizon of the near future.

Its doable and no less audacious than any other major idea drawing investment, support, and political advertising photo-ops right now. Its a little more complex than T. Boone Pickens' concept of converting vehicles to natural gas (an easy process) and much simpler than a Hydrogen Economy concept talked by the do-nothing till next decade crowd in opposition to most other proposals.

As viable as the smart-grid ideas pitched as the future, hydrogen refueling concepts pushing for funding, and of course the next-Gen biofuels emerging right now. I like what I'm hearing and I think that its something that would likely draw funding and support. In particular if Government and Utility groups stepped up to support this concept like they've done other experimental technologies in the past.

Also worth note, an Agassi quote from the article:

"I thought that the greatest problem of our time was oil. Oil on one hand is polluting the land, and on the other hand it's financing terror."

I trust those who are motivated by a perspective that moves them outside the normal box of concept. I don't trust those who are thinking big concepts to make a billion dollars. Though its a nice goal it breaks the focus away from true success of the technology and the recipricol partnerships necessary for a billion dollar business to thrive.

I am a capitalist personally so I don't trust those motivated that government is the sole solution either. But I do find an amazing pool of ideas and concpets trickling up from the End of Suburbia entrapanuer set. I don't believe in peak oil but I do find common ground with the perspective that imagines a world without oil and attempts to develop solutions that in their own right could compete with petroleum.

Shai Agassi is a leader of a logical framework I hope to see more from. An architect for the future that right or wrong will probably wring real additional wealth and value from technologies already with us and never applied in new directions. This is the definition of progress. Ideas pushing envelopes.

NOTE: I use this blog primarily to organize my reading, thoughts, and reactions over time. Complete with the tags and other background links. This is a little less than timely but I wanted to ensure I had it up for sake of finding it again.

Oh How they Forget

Sawdust a.k.a. "Biomass" was a common heating and boiler fuel in the Pacific NW. Very common. You can see the remnants of these hoppers and belt systems attached like skeletal remains on older buildings. They exist all over the older parts of Oregon. Which makes the following story reasonably funny.

From this week's Wallowa Chieftan Article:

"On Friday, Sept. 19, the first-ever biomass boiler system to be installed in an Oregon School District will be the subject of a much-anticipated gathering at Enterprise High School. The ribbon-cutting, dedication and tour of the facility will take place from 1 to 3 p.m., and the public is invited to attend."

Its funny when high-tech is really the fuel of yester-year with the additional controls of a computer aided combustion and recirculated exhaust gas improving the efficiency and emissions of the fuel. But of course the argument would be - it's new to them.

The sign read: "This is Not a Concept Car"

The return of the VW Turbo Diesel.

Hybrid mpg efficiency with Century Old technology. Thank you Rudolf Diesel and thank you VW for the long awaited return.

I was driving past a VW dealership in Salem, Oregon and what did I see? A vinyl covered new VW Jetta TDI which said along its panels "45 mpg This is Not a Concept Car."

I've been waiting and now it looks like its finally about to arrive. Now lets just hope that Honda, Toyota, Subaru, GM and Ford all follow through with their own suggestions of small sedan clean diesels. I could only imagine what a Subaru AWD wagon would do for Biodiesel if it rolled out with a high efficiency clean diesel engine.

Now the only question is..... Will it be for under $25,000?

Google and Distributive Wave Power

This is interesting. Google has not taken its success for granted and has invested its historically unique opportunity to move many great ideas forward. This one leads the pack in my opinion. The paring of one technology with a whole business model. I could really see this providing some strong reliable technology to many lesser developed nations. An interesting concept to say the least.

I saw it first at a favorite E-Newsletter of mine the Environmental Leader

"The floating data centers would be located 3 to 7 miles from shore, in 50 to 70 meters of water. If perfected, this approach could be used to build 40 megawatt data centers that don’t require real estate or property taxes."

The E-Leader cites Data Center Knowledge as their source with a more in depth discussion of Google's plans to make containerized data centers.

Almost A Month

It's been almost a full 30 days since my last post.

This summer has been good to me and bad to this blog. I've been busy with a friend of mine running for the legislature all I've focused on the last bit here is getting a good man in office.

That and I was lucky enough to go as a volunteer for this year's Cycle Oregon which was an amazingly enjoyable vacation. I heard it described by one of the cyclists as "Five Star Camping" which I must agree. A greater vacation I doubt can ever bee had.

Mark Fitz

Gizmodo Solar Posts Worth Reading

I bounced over to Gizmodo and saw some interesting mentions.

The above is an apparatus that stores solar power into a fuel cell system. It would allow a more efficient storage sink for power than your standard inefficient battery. This idea is not a new one but being it looks like a marketable product moving to production. That being actually being worth mention as a new twist (an elegant idea making it to market).

Tranluscent solar panel windows. The above isn't the most cost effective technology today but the concept has been talked about for as long as I've been aware of solar panels. So prior to my ability to type this ideas been floated around as the future of solar. Cool to see in reality. I'm sure their are installs off the grid where this makes perfect sense though.

Fuel Milleage Throw Down

VW Jetta TDI vs. Smart Car vs. Toyota Prius vs. Ford Focus

http://www.youtube.com/watch?v=46nMnCt75qI

This was a cool piece to watch. Being a big VW TDI snob I was excited to watch the Jetta beat the Prius in all real driving conditions (grandma getting milk once a week is not real driving in my opinion). I also was dissatisfied with the maintenance concern of the vehicle cost. The Ford Focus would likely beat all vehicles concerned in the first 100,000 miles. The Jetta if you extend the period beyond 200,000 miles.

Regardless. It was worth watching.

Biodiesel and Warranty

After quite a bit of work Nikola Davidson and the Northwest Biofuels Association pulled off policy for biodiesel with the new car dealers here in Oregon. Good job on Nikola's part. Any progress is good.


Please find attached a joint letter from the Oregon Auto Dealers and the Northwest Biofuels Association regarding biodiesel warranty protocol for auto dealers. This letter was created in close collaboration with Oregon biodiesel distributors and the hope is to replicate this in other states (tailoring it to reflect the needs of those members).

The next step will be distributing this letter to all the Oregon auto dealers. The letter is also available to download from NWBA's website: http://www.nwbiofuels.org/biofuel-resources-biodiesel-engine-warranties

This has taken longer than expected but I think having the auto dealer association's buy-off is worth the wait. Thanks for your input and support - Nikola

Nikola H. L. Davidson
DirectorNorthwest Biofuels Association
206.389.8660
www.nwbiofuels.org

Ethanol Industry Responds to OPEC

OPEC's members and official spokespersons have been claiming publicly for a few month now that ethanol was partially to blame for high crude oil prices. The ethanol industry has responded to these claims from the oil producing nations by taking out an advertisement explaining their perspective (ad shown above).

That perspective being simple. Ethanol increases and extends petroleum supplies and that existence in the market place puts a downward pressure on petroleum prices. Additionally (my words not theirs) its my impression that the Ethanol Producers are also implying that ethanol will soon be a real competitor for petroleum worldwide offering choice.

I saw the initial story at the Biobased News and followed it over to the RFA's Press Release.

The groups –- the Canadian Renewable Fuels Association (CRFA), the European Bioethanol Fuel Associations, the Brazilian Sugarcane and Ethanol Industry Association (UNICA) and the US Renewable Fuels Association – were answering the charges by OPEC that ethanol was in part responsible for the soaring price of crude oil, a price that will fetch OPEC nations more than $1.2 trillion dollars this year alone.

Also worth noting is the advertisement's citing of the Merrill Lynch study which claims that ethanol's effect on prices is downward. As without ethanol the world's petroleum producers would need to produce one million additional barrels of crude a day. The price effect of ethanol in the marketplace is believed to reduce overall crude prices as much as 15% according to the Merrill Lynch report.

PMAA's Thoughts on Ethanol by Pipeline: Think About it First

PMAA reports an advisory on ethanol by pipeline.

When thinking about biofuels and market subsidies its always fair for the biofuels industry to point out that there are large barriers to entry which raise the cost of operating a biofuel distribution business. One of the largest of these being access to the most efficient transportation mechanisms used by the biofuels industry. Namely pipelines and barges.

As fuel prices rise and the fungible considerations of ethanol and biodiesel as blendstocks for refined petroleum products the need for barges and pipelines to allow the movement of ethanol and biodiesel blends becomes much more significant. Though South American nations have been moving ethanol by pipeline for decades the US market is hesitant (probably because of issues South American markets saw decades ago). This conversation though is positive for ethanol in particular.

See the PMAA's news piece below:

DOT ISSUES ADVISORY ON TRANSPORTING ETHANOL AND BIO-FUELS BY PIPELINE
The U.S. DOT’s Pipeline and Hazardous Materials Safety Administration (PHMSA) has issued an advisory to pipeline operators on the potential dangers of transporting ethanol and biofuels by pipeline.

PHMSA advised pipeline operators that the transportation of batches of ethanol or other biofuels, including petroleum blended product in existing pipelines, may lead to internal corrosion, stress corrosion cracking, and a reduction in the performance of seals, gaskets and internal coatings. PHMSA advised pipeline operators to conduct risk analysis, monitoring, and controls as needed to move ethanol and biofuels safely through pipelines.

PHMSA is also requesting that pipeline operators conduct spill response planning for ethanol and bio-fuels products. The advisory said that PHMSA is willing to work with pipeline operators that plan to transport ethanol and bio-fuels in existing or new regulated hazardous liquid pipelines in order to better assess the risks these fuels pose to critical infrastructure.

PHMSA is asking pipeline operators for 60 days notice of intent to begin regular commercial transport of biofuels in pipelines. PHMSA asked pipeline operators to provide information on how pipelines will be prepared for ethanol and biofuel service, the anticipated blend concentration and batch frequency, additional emergency response planning and spill response plan revisions required, and plans for ongoing monitoring of pipes.

PHMSA said it will use the notice period to conduct a technical review of the operators' plans and provide feedback if necessary.

GM Supports the Expansion of E85 Pumps

GM has recently become a champion for ethanol in the US. Not just a positive PR when its useful type supporter of biofuels but a full on advocate. Most recently I just saw a news report from Bloomberg where GM and the National Governor's Association will work together to get an expansion of available E85 pumps throughout 15 US states.

This is more than just talk from GM its actual market development. They aren't just developing E85 flex fuel vehicles they are also making lower cost and domestically made ethanol a real option for consumers attracted to their vehicles.

Bureaucracy defends the status quo long past

the time when the quo has lost its status.

- Laurence J. Peter

Jatropha Comes to the US

This is the first US agricultural story about Jatropha I've ever seen where farmers where actually growing it commercially. I will be interested to follow this as farming in the US can get very political.

At this years Sustainable Biodiesel Summit in Florida the very prominent biodiesel expert Dr. Shaine Tyson had some very strong words to say about Jatropha being a poisonous and dangerous crop. That any biofuel crop which didn't provide more food along with energy was a bad policy decision.

From Orlando TV News WESH

LA BELLE, Fla. -- For drivers in Hendry County, expensive gas prices may no longer be a problem.

Residents of the small county in southwest Florida have turned to a farm to grow their own oil to survive the difficult economic times.

"We wanted to find a solution to a problem in the U.S.," said Mark Dalton, owner of Dream Fuel, LLC. "With the rising demand of fuel worldwide, we wanted to create our own fuel."
Farms in La Belle have been busy growing Jatropha trees. Jatropha is widely considered the newest and greatest source of biofuel. The tiny trees produce small, green fruit which contains the vital oil-bearing seeds.

"It's grown in Brazil, China, India, Guatemala, Africa," Dalton said. "In many places all over the country, we're behind in producing Jatropha oil."

Many see potential in Jatropha's ability to stave off the high demand for oil, but it would take an exorbitant amount of plants to make a dent in the worldwide economy.
"It basically takes 20 pounds of seed to make one gallon of Jatropha oil," Dalton said. "So, you would have to grow quite a bit of it."

Farmers especially have been hurt by high gas prices.

"We have tractors that sometimes go through 120 gallons of fuel a day," said La Belle farmer Byran Beer.

On the verge of a recession, farmers need any help they can get. Now, Jatropha can be grown, processed and used in the tractors.

"Hopefully, with technology and enough people's inputs, this thing will really turn into something," Beer said.

To produce the alternative fuel, Jatropha plants require a tropical climate to flourish, such as the one found in southwest Florida. Farmers in Hendry County have planted nearly 1 million Jatropha trees, Dalton said.

"We're seeing good results," he added, "but there's still a lot of unknowns."

FTC Ruling on Biodiesel and other Renewable Diesel Fuels

I came across a document that I thought was interesting. Rather than save to my desktop I figured this blog would be a better place to save the file.

The Federal Trade Commission promulgated a rule around the labeling and standard for biodiesel and "biomassed based diesels" (a description I have never formally heard referred to before).

Biomass-based Diesel Defined From the Rule Making:
Biomass-based diesel means a diesel fuel substitute produced from nonpetroleum renewable
resources that meets the registration requirements for fuels and fuel additives established by the Environmental Protection Agency under 42 U.S.C. 7545, and includes fuel derived from animal wastes, including poultry fats and poultry wastes, and other waste materials, or from municipal solid waste and sludges and oils derived from wastewater and the treatment of wastewater, except that the term does not include biodiesel as defined in this Part.

This is significant for two reasons. One, I never knew that the FTC had any part in the labeling or distribution of fuels. Second, this is the rule I recently saw mentioned by a PMAA newsletter about new biodiesel labeling requirements.

See the rule making here.

New ASTM Spec for Biodiesel

I heard about this first last week when my friend Nicola Davidson of the NW Biofuels Association called to tell me she voted on the subject and it passed.

A new better standard for biodiesel ASTM has come through. Now hopefully the Original Equipment Manufacturers (commonly refered to as OEM's in the indsutry) will finally embrace biodiesel.

The first official news story on the subject I've see came from Fleet Owner Magazine's e-news letter. See snippet below:

After five years of research and balloting, ASTM International D02 Main Committee has approved three sets of biodiesel specifications that alternative fuel advocates hope will generate increased automaker and consumer enthusiasm for biodiesel.

The approved specifications are: changes to the existing B100 biodiesel blend stock specification, finished specifications to include up to 5% biodiesel (B5) in the conventional petrodiesel specification, and a new specification for blends of between 6% biodiesel (B6) to 20% biodiesel (B20) for on- and off- road diesel.

Biogas - The Biggest Biofuel You've Never Heard About

I came across yet another story about gasification of garbage for electricity. It seems like these stories are multiplying in direct proportion with the falling US dollar and rising commodity prices.

It's funny. These days as diesel is predicted to move to over $6 and $200 a barrel crude is considered in many circles to be a safe bet not a speculation there is some real change in the market place. Here is the perfect storm that green-policy wonks have dreamed of and techno-futurist investors have bet on and the market is bouncing a little off the mark predicted.

What is fascinating is that in this world of higher prices we aren't seeing the biofuel media darlings (both loved and hated dependent on the story) ethanol and biodiesel. These two fuel plugging along with state leve RFS's, a Federal RFS, and a few voluntary adopters in the marketplace. But their roles seem defined by the mandatory blend policies.

The real technology move I'm seeing more and more of is biogas and syngas. At conferences, in press releases, and in passing conversation the new-new-thing seems to be bending compost heaps and exhaust gases to the wills of breakthrough technologies.

Taking several forms of technology I see this being the real paradigm shifting technology coming along. As agricultural operations of all sizes, utilities, and carbon off-set projects set their sights on these projects the technological applications, efficiency and proven return on these projects should put these in the mainstream of industry.

Of course mainstream in commercial applications puts this technology just outside the sexy-factor needed to get mentioned in political stump speeches. Either way, its exciting to see technologies like this come on strong.

For more on the subject check out Wikipedia's listings which are a good initial primer on the subject of what pops up under the energy slang word "Bio Gas":

Gasification
Syn Gas
Anaerobic Digestion

McCain Proposes Federal "X-Prize" for Electric Battery Powertrain Vehicles

John McCain goes all Portland, Oregon on the campaign trail. (See BizJournal for more info or JohnMcCain.com for the actual press release).

This seriously sounds like a left-coast proposal right along with the X-Prize for cars. The real question is why $300 million, why not other prizes, and what business does the Federal government have in offering a prize?

John McCain Will Propose A $300 Million Prize To Improve Battery Technology For Full Commercial Development Of Plug-In Hybrid And Full Electric Automobiles.
A $300 million prize should be awarded for the development of a battery package that has the size, capacity, cost and power to leapfrog the commercially available plug-in hybrids or electric cars. That battery should deliver a power source at 30 percent of the current costs. At $300 million, the prize is one dollar for every man, woman and child in this country -- and a small price to pay for breaking our dependence on oil.

I guess as long as it doesn't benefit a sitting special interest group John McCain can throw out pork with a straight face like the rest of them.

Having participated in a few government Request for Proposal (RFP) processes in the past I really don't see this making real sense in practice. Though on the stump it obviously has some real positive ring to it.

What I do like about it is the trust that if given incentive the free market will provide the solutions. Of course, when the Feds offer the prize instead of the free market it sorta destroys the logic of this effect though.

Congo uses Palm for Economic Development

The Republic of Congo plans to set aside part of its arable land for biofuel production. Congo has 8.2 million hectares of arable land, with less than 15 % of this land being cultivated. Three companies have asked for about 1.75 million hectares to plant palm trees for biodiesel.

Reported from the World Energy Global News Summary


Notice the 8.2 million hectares of farm land with under 15% in production. The interest in biofuels likely attracting foreign agricultural management, technology, and know-how to Congo. This is the first story of its type I've seen around Palm Oil. Usually its not called "arable land" but rain forest in a story.

We also see this in corn production in the US. With the additional market floor for ethanol it has given rise to more corn planted, harvested, exported, produced into food, and of course more ethanol. This side of the story is rarely discussed in stories about biofuels. Fortunately they don't call idle farm land in US set-aside "prarie" or "range land" when discussing using it to produce energy.

Usually the story pointing to any biofuel feedstock production assumes not a larger over all yield from a nation's resources but a zero-sum game as one of something means less of something else. Its to bad we don't see the truth about how the future of sustainable technology must focus not on cutting the pie in smaller pieces but instead a bigger pie with fewer inputs relative to the growing pieces.

That has been the past of the technology and should definitely be our focus for the future. There is also a large direct relationship between the wealth of a nation and its preservation of nature and environmental quality. No doubt a more productive Congo would be an overall greener Congo (though this is a very argumentive assertion on my part as many very green friends of mine have had this debate for years).

Solar Power Compared to Standard Utility Cost

The Environmental Leader provides this easy to read chart on solar cost and expected utility rates.

The source for this information is a Utility Solar Assessment Study released recently by Clean Edge. (NOTE: I have not read the study yet)

Major Automaker Listens to its Customers Wants. Toyota Rolls Out the Plug-In Hybrid

Hippies with six-figure incomes rejoice..... Your Christmas list has been written for you.

Shocking as it may be. Toyota is rolling out a plug-in hybrid. The retro-fits have long been popping around the Internet (Google having paid for retro-fits to show its viability). Well now its officially on its way.

Whats even better. Toyota is talking about the future with this vehicle. That future being a need to radically reduce the cost and ability of current lithium-ion batteries (see quote below).

"Reaching those goals will require bringing down the cost of lithium-ion batteries, which currently cost $1,000 per kilowatt hour, according to Tom Turrentine of the Plug-in Hybrid Electric Vehicle Research Center at UC-Davis."

Battery technology now entering the big-leagues when it comes to power-train Research and Development. This meaning that its official - the automobile's internal combustion engine is going through a totally new evolution.

See the full article at Wired.com

Gulf Oil CEO Speaks to Gasoline Retailers about Peak Oil

When a leader in the gasoline wholesale and retail business starts talking Peak oil it is a different world. See the article below.

A quote you don't see every day:

"While the company will not take on "green" fuels to save the planet, it will do so to gear up for a world beyond petroleum"

Mark the record books. $4 a gallon was the magic number for gasoline prices. The world began to talk completely different the moment gas hit that price.

From the Convenience Store News:
Gulf Oil CEO Reflects on Evolving Brand

During his keynote speech to Future Forum attendees, Gulf Oil President and CEO Joe Petrowski outlined his predictions for the energy industry, and why they have led the company to emphasize service and become more than just a petroleum distributor to its more than 2,500 retail partners.

"We have to, as an industry, prepare for a world without petroleum," he said, noting that the world is seeing a long-term structural shift in the energy market, which is resulting in the record prices for crude oil. On top of that, the world is running out of inexpensive oil.

"We do not have the technology today or access to cheap oil," he explained.Petrowski predicted high oil prices to continue, with a long-term floor of $60 to $70 a barrel, due to ethanol's growth from a boutique fuel. As a result, Gulf will be "fuel agnostic," meaning it will be both an ethanol and biodiesel player, along with regular petroleum-based fuels."We are creating an industry with options," said Petrowski.

"In the long term, ethanol will be a very viable choice."While the company will not take on "green" fuels to save the planet, it will do so to gear up for a world beyond petroleum, he said. "I'm not negating the need for green. There needs to be an economic drive to make changes. Convenience stores are not altruistic," he said, noting retailers' investment in alternative fuels will be hindered because of fluctuating margins and high credit card fees.

Petrowski also told attendees the distribution company is ensuring a secure future by trying to create healthy retailers.To do this, Gulf Oil is putting an emphasis on service, and providing its retail partners a "Gulf Sunrise" c-store concept, which aims to provide high margins inside the store, moving retailers away from surviving on fuel margins alone, he said.

Gulf will also provide retailers with pricing assistance, c-store and co-branding programs, construction/financing services, and loyalty programs and card services.

"Energy is not an end all, be all, but a means to have a better life," he concluded. —MB

Happy Birthday Nicolaus Otto

Nicolaus Otto, inventor of the internal combustion engine.

Born June 10, 1832

T. Boone Pickens. Wind Power, Drinking Water, and the Future of Oil

If you don't know who T. Boone Pickens is you should. He is to the independent players in the petroleum industry what Robert Kennedy is to young liberals. The idealized figure, dubbed the "Oracle of Oil."

Much like Wall Street looks to Warren Buffet oil industry insiders all gossip about what T. Boone Pickens says, does, and what the future might hold. Fastcompany this month has a great interview with him. Definitely worth the read.

Fastcompany asks: "Texas tycoon T. Boone Pickens has been dubbed the "Oracle of Oil." So why is he building the world's largest wind farm?"

A Response to an Email

I sent out an email to a listserve with the link StopOilSpeculators.com which is an effort by gasoline retailers to shift the blame for gas prices to the derivative markets. To which I got a response which I answer below. I figured this was worth sharing.

-----------------------------------------------------------------------------

Kirk,

I did not invent financial derivatives or complex financial markets. Neither did the US. In fact I believe it was European traders starting with the exiled Scottsman John Law in France that first created financial markets.

High prices hurt. But they are good for progress. It is crushing many in the gasoline station business. Local companies that own one or two gas stations can't afford to own the gasoline in the ground (they can't afford to fill their tanks anymore than the suburbanites driving SUVs).

The fact that petroleum companies are pitting themselves against Wall-Street and big oil says alot about how this debate is going. Old time friends are throwing others under the bus. The debate is about to change in a big way and this is the first significant sign that the policy debate is now changed for good.

It looks like $130 a barrel oil and $4 gasoline was the magic number everyone speculated about. The world is changing.

I have a bachelors in petroleum economics, know alot about the subject. I understand enough to know that I don't understand how these systems work and personally believe anyone else associated with these large markets does either. Anymore than a poker player knows how to beat any other poker player

They are a living complex system similar to an ecosystem. They existed at the dawn of time and as humanity has scaled up so have these markets. They exist at all levels of society but only recently (last thirty years) have developed into the hypothetical exchanges that they really are at the commodity level.

Also - France, England, Japan, and many other nations have systems exactly the same as the US. Just smaller in scale with the size of the markets doing business in those economies. The existance of commodity exchanges is not the fault of the US, George W. Bush, petroleum hedgers, cattle drivers, or any other phenomenon. The fault of petroleum costs is the fault of everyone who buys it, trades it, or relies on it.

The fault of rising commodity prices is instablity in the US money markets due to mortgage backed securities having issues right now. Institutional investors (not speculators) moved to commodities which are easily convertable into dollars. The markets for agricultural goods (though large) are small in comparison to money markets and that is why many economists blame non-recieving buyers of commodities for the spike in commodities across the world.

The petroleum jobbers and retail gasoline retailers are spinning this to avoid blame for the high pump price.

Mark Fitz
www.DieselGeek.Blogspot.com

Peak Oil Quote of the Day

The nice part about being a pessimist is that you are constantly being either proven right or pleasantly surprised.
- George F. Will

The above describes a friend of mine to a tee.Randy, a friend of mine from college, is a peak oil proponent. He lives, breathes, eats, and makes his income completely from the logic derived belief in Peak Oil and the End of Suburbia perspective.

As a sidenote: Randy's blog Lawns to Gardens

Quote for the Day (A good description of US Energy Policy)

There's an old saying about those who forget history.
I don't remember it, but it's good.
- Stephen Colbert

MIT's Energy Initiative (MITEI)

Described simply:

Doubling energy use, tripling electricity demand, political instability surrounding oil sources in the Middle East, and detrimental effects of greenhouse gas emissions on the environment: For MIT, these are the next problems to solve.

I saw a presentation last week on their efforts and its really exciting. Its worth looking at. Hopefully I'll have time to do a better post on it.

Mark

Biodiesel's Inception: A Very Brief Histroy

I cut and pasted this directly from: the Biodiesel Expansion blog. This blog having a good deal of basic information about biodiesel and the process. I found it pretty enjoyable to read and learned a little bit while there.

From a post titled: Basic History of Biodiesel Fuel

Biodiesel fuel has been around since 1853. However, it was not fully used commercially until the early millennium. It is credited to E. Duffy and J. Patrick and it was recorded that the very first diesel-propelled machine ran on August 10 of 1893. Thus, the same day was aptly named International Biodiesel Day.

There is this German man named Rudolf Diesel who made an engine that was propelled by peanut oil. This was his experiment on biofuel for machine usage. Although peanut oil is not qualified as a biodiesel fuel because it did not undergo the actual process of making biodiesel fuel, it was viewed as the future of the power of natural feed stock to be used as an alternative to fuel based on petroleum. However, Rudolf was successful in running an engine using this type of biofuel.

Another person who should take the credit for biodiesel is G. Chavanne. It was in 1937 when he received a patent for a process called transesterification. This is the process used for converting feed stock to biodiesel. The blends of biodiesel fuels are marked on the percentage of blends. A 20% blend is called B20. A 30% blend is called B30. The B stands for blend.

Basically, biodiesel is made from animal and plant fats that are then mixed with methyl or ethanol. Glycerol is also used. Called fatty acid methyl or FAME, biodiesel has gains popularity of its practically year in and year out. The number of countries that have heavily invested in this have grown since the 1970s.

Renault announces Electric Vehicle destined for US Market

Saw it over at Wired.com. Renault, like many other auto manufacturers is rolling out an EV. According to the article destined for US markets within a few years. Renault jockeying for a global leadership position on the EV side of the auto manufacturing universe.

This is interesting to say the least. That auto manufacturers are developing innovative technologies as fuel prices rise. More so the fact that when you read about many of these technologies their is one over riding motivation. More market share in large consumer markets such as China or the US.

Speculating on Oil Prices

There is an interesting story about the pricing expectations of a barrel of oil up on the Biobased news. Its a news wire piece on a recent KPMG poll of petroleum executives. The poll will be discussed at an upcoming KPMG Global Energy Institute conference.

Long story short. Over half of oil execs believe a barrel of oil will close below $100. See below:

In this year's KPMG survey, which polled 372 financial executives from oil and gas companies in April 2008, 55 percent of the respondents think that the price-per-barrel of crude oil will drop below $100 by the end of the year. Twenty-one percent think that the price will close between $101 and $110; 15 percent think between $111 and $120; and nine percent believe it will close at above $120. And, while 44 percent felt that prices would peak by the end of the year, a further 39 percent thought that they would not peak until after 2010.

Fair enough. Past as pretext for any speculation you would assume that the historical high would flatten out and trend lower. I would understand why that would be the majority consensus. What I don't follow is why 39% (not exactly a small contingent) thought oil wasn't going to peak until after 2010. I think this is evidence that there is some other factor effecting price currently and that this dynamic has yet to run its course.

Other interesting findings of the poll. The underlying cause for the increasing prices.

Indeed, a significant majority, or 63 percent, of oil and gas executives believe that growing demand due to accelerated demand in emerging markets is the major contributor to the high price of oil. The second highest contributor, according to 15 percent of the respondents, was the lack of access to new oil resources, and rising exploration and development costs. Ten percent attributed current pricing to growing demand in developed markets.

That supply was not readily available even with highs never before expected or seen. These same execs also mentioned a much bigger role for natural gas, see wind being a growth sector, and biofuels being a credible mass producible energy source within ten years.

My Thoughts on Sustainability

Today on the Biofuels4Oregon listserve their has been a vigorous debate brewing about what constitutes sustainable biofuels. A good email on the subject came from Brent Searle from the Oregon Department of Agriculture which actually inspired me to contribute to the exchage. Below is Brent's thoughts and then my response.

BioFuels Network

Sent: Tuesday, May 06, 2008 1:54 PM
Subject: [biofuels4oregon] Sustainability>

Here is my list of Sustainability Objectives for any fuel, keeping in
mind the question of "Can We Have it All?" There is no perfect fuel; they all have trade-offs.

Does the fuel (biofuel or any other) contribute in a positive way to:

1. The development of systems to deliver feedstock at “economically sustainable” prices to all players in the value chain over time?
2. Developing the infrastructure and capacity to consistently deliver quality fuel products in a market over time?
3. Economic development of rural communities, job creation, and local ownership models -- in the US?
4. Helping meet local, national, and world food needs?
5. Keeping ag lands in ag use?
6. Reducing carbon output, increasing sequestration, etc.?
7. Improving returns on energy and other inputs?
8. Stabilizing fuel costs?
9. National security: minimize military role/cost?
10. Energy security: diversified & resilient fuel supply?
11. Generating and enhancing environmental benefits (air, water, soil quality, wildlife, etc.).

There is no silver bullet. It will take lots of different strategies, fuels and biofuels, efficiencies and conservation, transportation shipping mode changes (more barge/rail, less truck), etc., etc.

Brent Searle
OR Dept. of Agriculture

My Additional thoughts and response to Brent's email:

I would also add to that the concept of "Does the technology/fuel/energy in question have longer term development opportunity?" I.e. - does it offer an upside potential of a long stream of value added products from initial investments.

Biofuels have a huge future for other value added products out of the same biofuel manufacturing facility. As for petroleum, the future of petroleum will likely be hydrocracking (i.e. converting) cheaper non petroleum products to the same spec as petroleum.

Developing new agricultural products or feedstocks for both ethanol and biodiesel have a huge potential for this. The leaders in these newer industries will be outside traditional energy and therefore will provide a good deal of value outside of our traditional marketplace. This is exciting stuff and rarely covered if ever.

The real story behind petroleum isn't the versatility of the input (the crude oil). Its the focus the petroleum industry has put into developing value added products from the crude. The real story of biofuels is similar - not developing the mainstream product (ethanol or biodiesel) but instead other value added products with unique niche markets.

Being that to dump any part of petroleum is noticeable and polluting. Its been the case since the very beginning of the petroleum refining industry there has been good deal of money invested to develop something from every last drip of crude oil. The major oil companies grew up niching certain products from their refining process. Everyone knows the stories of refineries in the rust-belt dumping lighter end products in rivers, flaring off natural gas, and others. We hear these stories because people in these communities were upset even in 1925 long before the Clean Air and Water acts. The early success found a way to get paid for their "waste" as a product instead of a pollution.

There is no reason why Agriculture won't follow that same development pattern as petroleum refining technology. Up until recently the main focus of US agriculture has been food grade products. The upside of biofuels is the research money is on a much wider focus of product development.If we have a floor for production to move to that can handle a diverse number of crops. This is a whole new paradigm for the US. Sustainability to me is more products from more acres with less water, fertilizer, and energy input. Sustainability to me is this trend for the next 100 years.

Anything that moves towards this trend of newer, better, cleaner technology is progress. Those green washing the same old practices are not.

Today unsustainable agriculture is a ten cylinder 57 Chevy. Something you can be sentimental about but not a breakthrough in technology for the time it was produced. Compare this 57 Chevy to the gamble represented by the 2002 Prius scale up. The Toyota Prius was cutting edge experimental technology outside the box of any market expectation. Over the next decades hybrids will become as standard as anti-lock brakes and electric windows and therefore so will our fuel economy expectations.

That's sustainable progress and therefore Sustainability.

Mark Fitz

www.dieselgeek.blogspot.com/

Good News for Oregon's Trillium Fiber Fuels

From: Chris Beatty
To: biofuels4oregon@lists.onenw.org
Sent: Thursday, May 01, 2008 6:10 PM
Subject: [biofuels4oregon] Trillium FiberFuels receives DOE grant

May 1, 2008

Trillium FiberFuels receives $100,000 grant for cellulosic ethanol research

Trillium FiberFuels of Corvallis, Oregon has been selected by the US Dept. of Energy to receive a Small Business Innovative Research (SBIR) Grant to develop a key process for cellulosic ethanol. The Trillium technology will substantially improve ethanol yield from feedstocks such as straw and forest residues. Trillium president Chris Beatty commented: “We are very pleased with this support and validation of our approach. We are excited about taking this technology to the next level.”

Gasoline Prices the World Over: March 1st, 2008

I came across this at Diabetes Daily of all places. They do not cite their sources but I figured it probably was accurate. Please do not assume these numbers are academically accurate. They are Google sourced.



Prices are quoted in US dollars per gallon for regular unleaded.



Oslo , Norway $6.82

Hong Kong $6.25

Brussels, Belgium $6.16

London, UK $5.96

Rome, Italy $5.80

Tokyo, Japan $5.25

Sao Paulo, Brazil $4.42

New Delhi, India $3.71

Sidney , Australia $3.42

Johannesburg, South Africa $3.39

Mexico City $2.22

Buenos Aires , Argentina $2.09

Riyadh , Saudi Arabia $0.91

Kuwait $0.78Caracas

Venezuela$0.12



Compare with my last post on the subject here. Notice the last time I reported on these pricing differences Venezuela was $0.11 a gallon. No doubt the price hasn't changed just the US dollar in comparison.

How do you know the US Ethanol Tariff might be going away?

When major refiners starts investing in Ethanol South America.

I saw it over at the Biobased News where they cited a BP Press Release.

BP announced today that it intends to take a 50 per cent stake in Tropical BioEnergia SA, a joint venture established by Brazilian companies Santelisa Vale and Maeda Group, which is constructing a 435 million liter (115 million gallons) a year ethanol refinery in Edéia, Goias State, Brazil.

Quite the bet on BP's part. Or maybe that's the only way to play in Brazil. To build strategic partnerships with local biofuel producers. The Press Release points to sugar cane and sugar cane waste as the feedstocks. It also mentions the plants markets to be both domestic Brazil and export abroad.



NOTE: I have no basis for this speculation beyond my initial gut reaction when first reading the news. BP, Shell, Chevron, and Exxon Mobil have all been making good-sized biofuel bets as of late. Something about his one just seemed to run of the mill to be just another "bet on the future" PR move by major oil refiners.

BP's Petroleum Exploration and Production Presentation

NOTE: I neither agree with nor forward any Peak Oil argument's I have seen and yes I've read several books on the subject and have had hundreds of heated conversations with experts on the topic of Peak Oil.

From a BP Press Release footnote explaining the basis of statements made about sugar cane ethanol I followed over to a set of interesting information at BP's global site.


At the site there was a host of interesting stuff to look at. Unfortunately time in life is limited so I just skimmed through and struck on what I hoped would be a really interesting presentation. You know, the type of presentation I can skim slides from to make myself look really smart in my own presentations.


I was looking for Powerpoint slides about hydrocracking, catalytic reforming, and heavy tar sands, oil shale, and producing sweet crude from abandoned wells with new bleeding edge technology. But that isn't what I found.


I found instead a very weak presentation about how BP is running out of oil and that it's spending more and more to access harder to get to crude.


The Future of Exploration and Production
by Tony Hayward the CEO of Exploration and Production at BP


What really caught my eye in this presentation wasn't the profound information. This being normal for technical slides about a complex subject such as oil exploration. What caught my eye here was the basic lack of explanation beyond simple statements. All I could think about was how a good friend of mine, Randy White (who lives, eats, and breaths peak oil) would think after seeing this presentation.

He would see this presentation as conclusive proof that the world has run out of oil and major oil companies have no strategy for how the world will meet its energy needs.

Now below shows their reserves and the development. It shows the general large strikes BP made in the Middle East, the Alaskan North Slope fields BP has to its credit, and also that recently the main development has been by acquisitions of the late 1990's.



Then comes the next technical slide from the presentation. A "Lifecycle of a Basin" or the reality that given current oil prices an oil well becomes to expensive to extract oil from after roughly 25 years.


Look above and do some fifth grade math. Oil supplies held by BP are declining beyond their acquisition of new fields developed by other other oil companies.





Now at this point I would encourage BP to talk about proprietary technology. That the future of their exploration and production would be based on BP being better at extraction than any other player. The fact maybe that even though the easy oil isn't quite so easy any more at above $60 or $100 a barrel it was a new world for their BP.



Nope.

This is what BP's CEO of exploration puts up next. These simple statements which are almost a joke. If Saturday Night Live did a skit about oil exploration no doubt these would be the bullet statements they would put up to garner a laugh.

Find new oil deposits. Be the first there. And focus on finding the biggest find possible.


Wow, quite profound statements.
It reminds me of slides we all saw from Dot.Com operations a decade ago.



Okay. This slide is pretty cool simply because it's got cool pictures.


But from the perspective of a Huber's Peak worshiping Hilbroner reading 'Peak Oiler' like my friend Randy this slide only convinces one thing.


Their statement would be simple "See no oil left to find."




BP presentation on exploration and production does little to convince even those who know alot about Peak Oil but haven't bought into it as a reality that there is a supply of cheap crude oil in the world left untapped.


If I was a journalist who saw three less than credible presentations on Peak Oil and then saw this presentation from one of the largest energy players in the world I would no doubt side with Peak Oil having something to it.


For all of BP's investment in outside the box energy development. It's focus on gaining more crude from the same old holes in the Earth, there was nothing to point to this beyond the fact that exploration for big finds is compeletly off-shore deeper than ever.

How Much Oil? 1 Cubic Mile of Petroleum a Year

The world uses a little over 1 cubic mile of petroleum a year.

I love the visual of how big of an ocean we consume. The source is Ripudaman Malhotra from SRI Internation.

The article I spotted the fact at was over at CNet News.

Other interesting facts:

It would take 4.2 Billion rooftop's covered with a 2.1 megawatt panels each to equal the energy consumed by world oil.

It would take 2,500 900 megawatt nuclear plants to replace the energy consumed currently by the world in liquid petroleum.

It would take 3 million wind turbines to replace a cubic mile of oil as well.

The article also came complete with an interesting chart below.

Zap Called on the Carpet by Wired Magazine

Wired calls Zap a "Hype Machine" with a scathing article pointing to over a decade of broken promises, deceptive business practices, and a consistent shady use of its companies equity to pay debts.

Simple breakdown about Zap as described by the article:

They promised vehicles they couldn't get.

They assumed and claimed relationships with Chrysler they never had.

They took money in exchange for dealership territories and left their dealership network to fail without a true supply of alternative fuel vehicles.

Those vehicles they did deliver were electric and could not perform adequately to actually sell, were shodily put together, and were poorly supported by warranty.

Oh yeah - Warranty work was left unpaid and hanging as well.

All while continually paying people in ever greater issues of company stock.

So in short - the bad things you hear about electric vehicles - probably Zap.

I saw this the weekend the magazine came out. Wanted to do a post on it but found that Wired hadn't put it online yet. Came across the magazine this morning and remembered how significant this is. So much for Zap (though rumors, problems, and complaints had already been heard and well known in electric vehicle circles for a while now).

I called a friend of mine who was involved in the launching of EcoMotion (an EPA Smartway certified and electric vehicle dealership here in Portland, Oregon). His immediate comment was not one of surprise.

Range Fuels: Biogass to Ethanol

I came across an article I thought worth sharing. Two points of interest. The initial article was found at BusinessGreen.com and is worth reading.

One - Range Fuels, a biofuel startup, got a significant amount of direct investment. This to support its efforts in turning woody biomass into liquid fuel which are about to be commercially scaled in their first plant in Georgia under construction now. This round of funding came on the heels of another $76 million awarded by the US DOE to also support their technology.

Two - The process explained of how they will make their cellulosic ethanol. The article called it a "thermo-chemical" technique of turning wood into liquid fuel.

From my guessing this is a fancy way of saying they burn the wood, pull off the exhaust gas (now technically referred to as "biogas) and introduce the biogas to an environment that includes a catalyst. The catalyst in turn would create certain or pull out molecule chains that would then be further refined into liquid fuel (i.e. cleaned up).

Interesting stuff. I hope to have time to put up more on this technology process. I've read a little about it and seen presentations at conferences. Either way I need to learn more about it. Something in my gut says this is going to be the next big focus. Primarily because the combined heat and power potential probably fits extremely well with existing corn based ethanol and therefore could be readily adopted as a plant expansion for existing ethanol producers.

My thoughts are that we will be hearing increasingly more about Range Fuels going forward if for no other reason than they have the money to push for earned media coverage and must justify the cash they've recently pulled down.

NOTE: This blog first mentioned Range Fuels after they recieved a large investment from Vinod Kholsla. See the previous DieselGeek Post on the subject.

From the PMAA News

The PMAA is the Petroleum Marketers Association of America E-Newsletter.

The reason I posted this up was the last paragraph which states that there are three factors affecting high energy prices:

US Monetary Policy

Geopolitical Events

Speculation

All adding as much as 30 to 40 percent to the cost of crude oil.

Think about that. That would mean that oil should be below $70 a barrel given the economics of the pre-Bush Presidency. See the actual release below.

HOUSE SUMMONS OIL EXECUTIVES TO TESTIFY BEFORE CONGRESS

On Tuesday, the House Select Energy Independence and Global Warming Committee held a hearing to address oil companies’ profits, current gasoline prices and alternative energy. Testifying before the committee were: Mr. J. Stephen Simon, Senior Vice President of Exxon Mobil Corp; Mr. John Hofmeister, President of Shell Oil Company; Mr. Robert A. Malone, Chairman and President of BP America, Inc.; Mr. Peter Robertson, Vice Chairman of Chevron and Mr. John Lowe, Executive Vice President of ConocoPhillips.

As in the past, the hearing served as political theatre to criticize major oil companies. Members asked oil companies to invest ten percent of their profits in renewable energy and biofuels. Currently, House leaders are trying to repeal $18.1 billion in oil production tax incentives to create tax breaks for alternative energy companies.

PMAA applauds Representative John Larson (D-CT) for focusing attention on the futures markets. Representative Larson argued that, “speculators are driving energy costs,” and asked oil executives if they agreed that excessive speculation has artificially raised energy prices. Mr. Simon, Senior Vice-President, Exxon Mobil Corporation explained that there are three factors affecting high energy prices: U.S. monetary policy, geopolitical events, and speculation which may add as much as much as 30 to 40 percent to the cost of crude oil.

Windpower by State

Oregon Leads the US. Third place and we just past our RPS. I tracked it down on the Environmental Leader.

25x25 Responds to Time Magazine Article

FROM AN EMAIL ADDRESSED: "To all 25'x25 Partners, April 2, 2008

Responding to widespread inaccuracies in this week's Time magazine cover story, the 25x'25 National Steering Committee is responding with a letter to the editors of Time expressing disappointment with the questionable characterization of biofuels and their role in the issue of greenhouse gas emissions in "The Clean Energy Scam," by Michael Grunwald. The letter was authored by steering committee member and former Congressman Thomas W. Ewing, who is also the Immediate Past Chairman of the USDA and DOE Biomass Research and Development Technical Advisory Committee. The entire letter follows:


As a former Member of Congress and a leader in a diverse alliance of agricultural, environmental and conservation organizations working together to advance clean energy solutions, I am greatly disturbed with Time magazine's April 7th feature story on biofuels. In this article, Michael Grunwald criticizes biofuels yet offers no alternative to using petroleum to meet our energy needs - much of which comes from the Middle East.

Members of our alliance share the author's anxiety for the continued health of the Amazon rain forest and other "carbon sinks" that nature has provided around the globe. As champions of many forms of land-based renewable energy (biomass, wind energy, solar power, geothermal energy and hydropower, in addition to biofuels), we agree that environmentally sensitive lands should not be exploited in pursuit of renewable fuels.

Unfortunately, the story's message of concern is undermined by misinformation about biofuels and an over-simplified analysis of complex systems. The implication that biofuel production is responsible for the destruction of the Amazon rain forest ignores the reality that ever increasing worldwide demand for food and fiber is the primary cause of land use change in this and other regions. Simply eliminating biofuels will not stop land use changes from occurring, and in countries like Haiti that have already lost their forests, biofuels could help reestablish forests and offer more affordable and sustainable energy options. Similarly, information in the story about a recent study, which claims land-use changes brought about by increased biofuel production are producing more greenhouse gas emissions (Searchinger et al.), only tells half the story. What is missing is that Searchinger's methodologies have been widely questioned by respected biofuel life-cycle analysis researchers such as Michael Wang, with the Center for Transportation Research at the Argonne National Laboratory, who counter that Searchinger et al. used outdated, if not incorrect, data to reach their conclusions.

The story's reference to a UN food expert's dramatic condemnation of biofuel production fails to mention that the UN Food and Agriculture Organization almost immediately distanced itself from the remarks. The head of the UN Food Program recently noted that higher energy costs, erratic weather and low stocks are big factors contributing to the high cost of food around the globe.

Of particular concern is the ready dismissal of emerging technologies that will allow us to produce next generation biofuels from non-food feedstocks sustainably grown on underutilized and marginal lands not suited for food production. Conservation tillage and other agriculture and forestry residue management practices used to produce biomass energy feedstocks can also provide a constant buildup of soil organic carbon. Researchers at Ohio State have concluded that the total potential of carbon sequestration in U.S. soils, counting croplands, grazing lands and woodlands, is nearly 600 million metric tons of carbon, or the equivalent of more than 2,200 million metric tons of carbon dioxide emissions - about 33 percent of total U.S. emissions.

We encourage the editors of Time to contribute to a much-needed discussion of the role renewable resources will play in improving national security and the environment while moving us closer to energy independence. We simply ask that they demand a basic level of accuracy and balance from the stories that they run.


The Full Press Packet and no doubt more will be coming at the 25x25 main website shortly.