2009 - A Bad Year For Biofuel

This article says a lot about the viability of the natural gas & petroleum industries. Every time our government invests in alternative fuels (do you remember oil-shale during the Carter administration?) they fail to create an industry that can survive without subsidies. At least we're adding to our knowledge and should be able to produce commercial quantities of alternative fuels if they're ever needed.


I think government efforts produce better results when they concentrate on the demand side of energy consumption. Today's cars, home, and industries use less energy and produce less pollution than they did a generation ago. We don't celebrate these victories much, but they've dramatically improved life in the US and other developed countries.

Bad Year For Biofuel Ends On Dour Note - Money News Story - KPHO Phoenix
"An alternative fuel for diesel engines is off to a shaky start this year though it emits fewer pollutants and cuts down on petroleum use because it's made from environmentally friendly waste and vegetable oil.

A federal tax credit that provided makers of biodiesel $1 for every gallon expired Friday. As a result, some U.S. producers say they will shut down without the government subsidy.

Biodiesel's woes come on top of a year of problems for the fledgling biofuel industry -- an irony given the push to cut down on greenhouse gases and ease the nation's need for foreign oil. A key driver for the alternative fuel -- the high cost of oil -- disappeared as diesel prices dropped 18 percent since the beginning of the recession. Then in March the European Union placed import-killing tariffs on biodiesel and other biofuels.

It was a huge hit for U.S. biofuel makers, with Europe taking 95 percent of all global exports.

Biodiesel, which is usually blended with traditional fuel, had over the past few years been the fastest growing fuel among fleet vehicles like buses, snow plows and garbage trucks.

Those fleets, however, can shift to traditional fuel, as some have, when the prices of diesel drops.
. . .

"By the time you buy the feedstock and the chemicals to produce the fuel, you have more money in it than you get for the fuel without the tax credit," Francis said. "We won't be producing any without the tax credit."