Skip to main content

Biofuel Bubble

I just read a good article in BusinessWeek titled "The Biofuel Bubble".  The gist of the article is that biofuels start-ups (particularly those focused on ethanol) are going to fail or be absorbed by oil and gas majors.  Ethanol will be limited by the infrastructure that can absorb it (i.e. current automobiles can't take much more than 10% ethanol in the gasoline mix).  Firms, like LS9, that are more focused on diesel or gasoline-like fuels will be better off.  The article also discusses some of the limitations around feedstock.  The article highlights:
Producing 30 billion gallons of fuel takes 300 million or more tons of plant material. That's more than the total weight of cars and light trucks sold in the U.S. over the past 10 years. Growing this much cellulose would take at least 30 million acres of land. "I think the biggest problem for everybody is how are we going to grow, gather, store, and treat the biomass," says Brent Erickson, lobbyist for the Biotechnology Industry Organization.
I suppose that's where the variety of approaches (algae, different types of biomass, etc.) will be important.  It's unclear what the minimum efficient scale will have to be to make each of these potentially niche processes cost-competitive in the short-run.  And who will fund the capacity build-up?
Labels:

Comments

Post a Comment

Popular posts from this blog

Nine Prescriptions for Building the Duke Entrepreneurial Community

I think Duke can have one of the strongest entrepreneurial communities in the world. Are we there yet? Well, not yet. But there's a tremendous amount of momentum that I saw build in just the past two years while I was getting my MBA at Duke. While leading Duke's 10th annual business plan competition, the Duke Start-Up Challenge (DSC) , last year, I witnessed a near doubling of participation on campus in just a single year. The interest on the ground was clearly there and building rapidly. But now that I'm an alum, I'm looking back and wondering ... how do we rev-up the Duke entrepreneurial community even more? I read a great article by Daniel Isenberg, a professor of management at Babson, called " How to Start an Entrepreneurial Revolution " in the June edition of the Harvard Business Review. Isenberg outlines nine prescriptions for governments that want to create entrepreneurship ecosystems in their countries. Although he was focused on governments an
3 comments
Read more

Biofuels May Hinder Anitglobal-Warming Efforts

Read an interesting article a couple weeks back in the WSJ on how biofuels may actually increase carbon emissions in the medium to long-term. Apprently the shifts in land-use necessary to support the production of bio-materials like soybeans, corn, or palm could in fact release more carbon emissions. The time it takes to get carbon-neutral on some of these projects is pretty crazy - 319 years for soybean biodiesel from Brazil (assuming you're clearing rainforest), 93 years for corn ethanol from the U.S. (assuming you're clearing grasslands), 86 years for palm biodiesel from Indonesia (assuming you're clearing rainforest). I suppose biofuels really aren't meant to reduce carbon emissions, but just crazy that they potentially exacerbate the problem so much.
3 comments
Read more

Bloomberg for President?

We can only hope. I read an article in the WSJ about how business people across the country, from entrepreneurs to bankers, are all hoping for Bloomberg to run. The economy thus far seems to have taken an unusual backseat in this years election but seems to be emerging as an important issue. An interesting excerpt: As the economy has emerged as a dominant issue in the 2008 campaign, candidates have struck populist notes, from Republican Mike Huckabee's boast that he is not a "wholly owned subsidiary of Wall Street" to Democrat Barack Obama's visit to Wall Street to chastise finance executives for failing to protect the middle class. I can see the approach these guys are taking and I'm sure they have really smart campaign strategists. But I really wonder if this type of message of polarizing the "working man" vs. "big business" really resonates with voters anymore? Is the middle-class really that disgruntled with big business and income dispa
2 comments
Read more