World BioFuels Industry Answers OPEC Lies
When President Khelil of OPEC said last week that the cause of high gas prices was domestic production of biofuels, I was ROFL’ing. But then the fear set in. What if people believed him?
In fact a lot of people DO believe what OPEC says. Don’t believe me? Just watch TV news for 20 minutes or so, and you’ll see what I’m talking about. They are quoting 30 year-old efficiency studies, and blaming the price of food on Ethanol – instead of the high price of diesel.
Fortunately, the biofuels industry is getting their voice heard as well. In an open letter to OPEC, the World BioFuels Industry refutes these ridiculous claims. You can read an article about it (as well as see a scan of the original letter) here: www.goodfuels.org/opec
July 21, 2008 at 6:14 pm
It’s interesting. I’m in Italy. Here they tend to blame the high prices for oil on speculation. Neither one of these things is exactly true as far as I understand. Speculation is too simple a mechanism to drive the price up this high for this long. Rather, I understand that the need to spread financial faults across safe commodities is driving investment in oil – as well as a need to keep spending on both Iraq projects and non-Iraq b-plans to save investments committed to the Iraq scenario. As we’re operating at almost or near exact supply/consumption ratios – the investment push is driving up prices by adding to already expanding real demand. I don’t think biofuel has much to do with this mechanism, except in the sense that alternative energy acts as a hedge investment for energy companies – which, spreading the portfolios thinner, places more pressure on them to perform. It’s funny to blame high oil prices on ethanol. There are lots of other things to blame on land-based biofuel production.
Pete Cullen
Language and Culture for Business
University of Urbino Carlo Bo
July 23, 2008 at 3:49 am
Hello Pete,
Love your country! Italy is one of my favorite places on Earth.
Regarding OPEC and biofuels…
Its interesting that the media doesn’t give it much play, but I was reading T. Boone Pickens site earlier today (pickensplan.com), and he makes the point that in fact our oil supplies peaked in 2005.
Consumption, has risen, of course. The only reason we’re able to meet demand is because of biofuels.
I firmly believe that if biofuels weren’t in the supply mix, we’d be seeing the $300 per barrel oil that Pickens predicts within the next 10 years. But we’d be seeing it right now.