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Positioning for Success

By Chris J. Zygarlicke | July 01, 2013

In this second term of President Obama’s administration, many different entities are trying hard to get their position on renewable or fossil fuels recognized and, at the same time, eliminate opposing positions. What might make more sense is to position for success all around. Biofuels and fossil fuels could coexist to achieve some level of success come the end of this present presidential term, if a few positions are maintained.


First, there is the position of respect. All sides or positions could benefit if some sense of mutual respect between renewable fuel advocates and fossil fuel advocates could be attained. Arguments for and against renewable fuels or biofuels need to change toward marketing solutions. If the position is held that biofuels are not cost-competitive, do little to help the environment and global warming, and should not receive any government incentives, that is a position well enough. But some level of respect might be warranted to give the biofuels industry some time to prove out. Remember, the biofuels industry, in reality, is only about a decade old. Yes, it is true that science and engineering have been trying to make energy and fuels out of grasses, wood, and straw since the early 1980s, but only recently have small commercial-scale plants been erected. In addition, markets do exist for ethanol and biodiesel worldwide, markets that have been established during this young decade. Some of these markets, but not all, are indeed dependent on government assistance. Some respite of time could be warranted here before an entire U.S. industry is eliminated.


Second, if a position is held that biofuels can replace petroleum-based fuels in the U.S. in the next half century or less, again, that is a position well enough. Renewable fuel advocates need to realize that the entire globe has awakened to the possibility of owning a fossil fuel automobile or power generator. For some, this simply was not on their radar a decade ago. Environmentally, right or wrong, fossil fuel consumption is not on the decrease but is on the increase, and petroleum production advances are so staggering that experts really have no clue as to when world peak oil production may actually occur. Throw in astounding natural gas reserves, once deemed unrecoverable, and new technologies for gas-to-liquids and CNG–LNG (compressed natural gas–liquefied natural gas)-powered vehicles, and we definitely have serious challenges with wholesale conversion to biofuels. The fossil fuels position is also in need of a little respect.


Finally, if a position is held that petroleum and fossil-derived vehicular fuels will dominate for at least a century, with prudent attention to biofuels industries that can rise above food-based feedstocks and supply significant but not total replacement quantities of lower-carbon footprint fuels, then there might exist an environment for success. This position is one that needs to happen in order to benefit the global society and the environment. Certain positional debates between these two industries need to take a break. For instance, both sides claim to have solved the calculation of which industry gets more subsidies or incentives to hold their position of success. It seems that this calculation is some type of Riemann hypothesis (an insolvable equation) and should probably be answered by markets instead of mathematicians or economists. Positions of respect solve the insolvable equation by allowing both positions to exist, perhaps with the help of a few incentives until markets can truly get entrenched and technologies can catch up with economics.


Here is a factual situation that shows both fossil and renewable positions hold sway and can coexist. The U.S. has lowered its oil imports drastically over the past several years and will likely continue to do so for many years. The U.S. Energy Information Administration has published data showing that daily petroleum consumption in the country will remain below 19 million barrels through the year 2040, where in 2004, consumption was 20.6 million barrels. In about 25 years, the U.S. could still be below its all-time oil consumption record. Those facts testify to a vibrant oil production industry that has excelled in the face of lower petroleum consumption, higher oil prices, increased fuel efficiency, and a U.S. and worldwide recession. However, those EIA facts are also because of well-entrenched ethanol and biodiesel industries that have significantly impacted domestic petroleum consumption.


In the end, it can only be hoped that positions of respect will allow both sides to continue to grow toward market and environmental sensibility. At the Energy & Environmental Research Center, we will continue to forge new technologies to crack the cellulosic barrier for producing biofuels from nonfood biomass, and we will continue to develop new technologies and strategies to capture carbon dioxide, inject it into oil formations to sequester a portion of it, and drive out once-unrecoverable oil resources. We will continue to be respectful to both of these sides.

Author: Chris J. Zygarlicke
Deputy Associate Director for Research
701-777-5123
czygarlicke@undeerc.org

 

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