Ring Around the Sun

While politicians try to gain mileage out of ethanol based gasoline and how it could help reduce dependence on oil, scientists and wall street have been paying more attention to Biodiesel. In-fact biodiesel has been around forever…your local tree-huggers have been running their diesel cars on waste grease from the nearest fast food joint. Although this often made car exhaust smell like french fries, it essentially paved the way for the much more efficient and profitable biofuel ventures of today. Business 2.0 magazine reports:

It’s not hard to see why. Biodiesel is 30 percent more fuel-efficient than gasoline, which in turn is 30 percent more efficient than ethanol. And while most ethanol produced in the United States comes from a single feedstock - corn - biodiesel has many sources: the oil of seed plants, such as soy and canola, french-fry grease and animal fat. That means the market can weather a price increase in any one raw material. Solazyme, a South San Francisco biotech firm, has even started making biodiesel from genetically modified algae.

Better yet, biodiesel can be manufactured in large quantities today - unlike fuels such as hydrogen. Total production shot up from 25 million gallons in 2004 to 250 million last year. Nearly 100 new plants are now under construction; even Chevron has joined in, cutting the ribbon on a 20-million-gallon plant in Galveston, Texas, in May.

…………………The past few months have seen plenty of major corporations rush to hop on the biodiesel bandwagon. Oil giant ConocoPhillips (Charts, Fortune 500) has inked a deal with Tyson Foods (Charts, Fortune 500) to make diesel out of animal fats. In July, U.S. Steel announced that it will use a 10 percent mix of biodiesel at its plant in Gary, Ind. And Berkeley-based Clif Bar has started subsidizing employees who drive biodiesel cars.

The rush to biofuel has attracted not only the automotive sector, but airlines such as Air New Zealand and Virgin Atlantic together with jet engine makers Rolls Royce and GE have announced biofuel flights for 1008 and 2009. Chances are they are already carrying out ground testing and plan to run one of the four engines in a 747 jet on biofuel.

Biofuels also promise to create booming economies for otherwise impoverished regions of the world. Traditionally energy starved Africa could become one of the world’s biofuel powerhouses…..that is according to a $ 160 million deal signed by BP to produce biofuel from the oil of the ‘jatropha’ plant. Jatropha is an otherwise poisonous and inedible plant that grows well in arid soils 25 degrees north and south of the equator. This makes much of Africa’s landmass and climate suitable for the crop. Under the terms of the BP deal about half of the jatropha plantings will take place in African countries.

With many foreign automakers already lining up to introduce diesel engines into the US, the onus is now truly on the local Big 3 who have lagged behind in both research and production of diesel based vehicles. Interested readers note that unlike ethanol and natural gas vehicles, the average diesel engine will run quite happily with biodiesel..including the local home brewed variety made from restaurant grease. The internet is full of cookbook and recipes to brew your own batch. Just do a google search on biodiesel.

However, there have been concerns from the UN and Oxfam (UK based glabal charity) about the viability of diverting arable famrland from the production of food for the world’s impoverished, to the production of biofuels. I think this fear is premature and unnecessary. My theory is that impoverished farmers, by and large, stay impoverished becasue the food they produce has little or no value. By producing more valuable bio-fuel crops they stand a better chance of pulling themselves out of the cycle of poverty. In the long term, it will all depend on the diversity of energy sources. It would be foolish to think that biofuels could be the next ‘oil’, the dominant energy source for the world. Rather, I see the future as consisting of a wide variety of affordable energy sources such as bio fuels, solar energy, wind and wave power.