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Smart Money Is Riding On The Next-Generation Fuels
By Mr Ethanol | May 16, 2007
FT.com:
The case for ethanol in the US was encapsulated, effectively if tactlessly, in a poster campaign by Missouri farmers last year.
Pictures of the late King Fahd of Saudi Arabia and a local farmer were juxtaposed, with the tagline: “Who would you rather buy your gas from?”
That same argument, in essence, was what lay behind president Bush’s declaration in this year’s State of the Union speech: “For too long our nation has been dependent on foreign oil.”
Promoting energy independence has been a consistent theme of the his presidency, but in this year’s address he set an explicit target of cutting gasoline usage by 20% over the next 10 years.
That would mean, by 2017, a market for renewables and other alternative road fuels of 35bn gallons, displacing 15% of gasoline consumption, up from 3.5% today.
That target, seemingly guaranteeing huge growth in the consumption of ethanol and other biofuels, has sustained the wave of interest in renewable transport fuels, and encouraged a surge in the planting of corn, the sole feed-stock for domestically produced ethanol.
It implies a six-fold rise in demand for biofuels - which was already set to rise sharply under the previous target of 7.5bn gallons by 2012.
That growth is under-pinned by several tax breaks, including a tax credit of 51 cents per gallon paid to blenders and retailers.
Domestic production is also protected against foreign competition such as Brazilian ethanol, produced from sugar at a much lower cost, by a 54 cent a gallon import duty.
Ethanol use is also being encouraged by the state-by-state switch away from methyl tertiary-butyl ether (MTBE), an oxygenate added to gasoline which has been found to cause toxic pollution, and is now being replaced by ethanol. More.
Topics: Biodiesel, BizOp, Ethanol, Money |
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