November 8, 2007
Biofuels bite back
After Martin Wolf put the case for the prosecution on biofuels, here comes the defence, represented by Ricardo Hausmann of Harvard. While he must be right that biofuels could play an important role in providing secure supplies and cutting greenhouse gas emissions, I thought the most telling phrase in his piece was this one: "Technology is bound to deliver a biofuel that will be competitive with fossil energy at something like current prices."
In other words, what he wants is not the environmentally and socially damaging biofuels we have today, but some ideal future biofuel that has solved all those problems. While I agree that such a fuel would be very welcome, we still have to engage with the reality of today’s actually existing biofuels.
To argue, as Archer Daniels Midland has done, that the subsidies for first-generation ethanol are necessary because otherwise we will not get the second and third generation fuels looks like a large pile of steaming biomass.
Royal Dutch Shell, in spite of some apparently disappointing progress so far, is still plugging away at second generation biofuels. It believes that current subsidy schemes actually militate against the more advanced technologies such as the production of ethanol from plant waste. (They also hold back the cheaper and greener Brazilian ethanol from potential opportunities in the US and the EU.) If the regulations encouraging biofuel use are volume-based, then fuel suppliers will always tend to go for the lower-cost option, which for the forseeable future will be conventional ethanol. A reform of the system to give rewards for cutting emissions would seem a no-brainer, but always in this area, reform is a question not of brains, but of guts.
Ricardo Hausmann misses the key elements needed to cultivate the huge areas of idle agricultural land for biofuels. Namely the millions of farmers with the right skills, capital, infrastructure, institutional support and political frameworks. Unlike the desk bound Harvard professor, I have spent almost 40 years in some 50 countries promoting rural development, and have farmed over 60,000 Zambian acres myself. I still wait for the 2 billion+ farmers sitting on the supposed idle lands to feed themselves before becoming mini ADMs.
Posted by: Mohamed Cassam | November 8th, 2007 at 4:05 am | Report this commentRicardo Hausmann also ignores the fact that 30 barrels of conventional oil can be produced for every barrel of oil used to extract it in energy terms. Biofuel might possibly achieve just over one barrel of oil for every barrel used to produce it. What price would oil be if we could only sell one tenth of a barrel for every barrel extracted. Hausmann clearly likes to type numbers into a computer but has no practical understanding of energy issues. Substitutes for oil may appear at higher prices but there is no reason why these should be bio, or even liquid, fuels.
Posted by: Richard Crozier | November 8th, 2007 at 11:48 am | Report this commentWhy is the FT not publishing articles about the specific energies of so called ‘bio-fuels’?
Ask any SAAB Biofuel driver what the mpg is of E85 to get an inkling as to why ethanol from whatever source is only a simplistic and partial solution.
Posted by: mespilus | March 5th, 2008 at 4:44 pm | Report this comment