Jun 16, 2008

US Department of Energy: Biofuels Lower Gas Prices

The US DOE went on the defense for biofuels in a press release last week. They tackled one of the hottest topics of today - price - but from a different perspective, the effect of biofuels on the price of petroleum. You can read the whole release here.
  • The release states that in the US for 2008, biofuels will have displaced the use of 5% of all petroleum.
  • This 5% decrease in demand amounts to a $0.20 to $0.35 reduction in price at the pump for petroleum products.
The report also stresses that this is the impact of "first generation" biofuels. Second generation technologies, like cellulosic-ethanol and algae-biodiesel, are much more energy efficient, which translates to increased volume at lower costs.

Other good quotes from the release:
Today’s Biofuels Account for Only a Small Percentage of the Increase in Global Food Prices.
  • Higher oil and gas prices leading to increased costs of fertilizer, harvest, and transportation
  • Increased demand as developing countries grow and people improve their diets
  • Two years of bad weather and drought leading to poor harvests in parts of the world
  • Export restrictions imposed by some countries

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