There have been recent seminars in this area on investing in alternative bio-energy, indicating that there is still money around (somewhere). This is a second-hand report from a seminar a few days ago, with some shocking information, if it can be believed.
BTW this years corn crop is apparently going to be way more than anyone suspected, but soy and wheat were also stronger than expected. If this had been a normal farm year -- there would be huge surpluses and prices would be at rock-bottom.That economic situation is a huge anomaly in itself. Cobalt Biofuels is a local biofuel company in Silicon Valley, flush with IPO money and good ideas- which has a proven fermentation process to convert cellulose into butanol. That is a win-win combination. They are not alone in this but they seem to have a lead in the technology. Companies like Chevron love butanol instead of ethanol for many reasons, and being only an 50 miles away from Cobalt, as the seagull flies, they are very interested (if you look at the seminar name tags). http://www.cobaltbiofuels.com/science-and-technology/ Afterwards, a spokesperson opined that if you look at the most recent US trends in the consumption of all fuel in general, hybrid popularity, fewer miles being driven - and rising farmland allocated to ethanol and most imporatantly the *ag-waste that is there already* but not being used - plus the 20% energy gain of butanol over ethanol -- combine all of those for the coming year - 2009 (realistically: beyond 2010) and like magic ... (you are not going to believe this) ... but IF most of the ethanol makers shifted, or added cellulosic butanol, to their facilities, which apparently is not too hard to do, and the planned acreage did not decrease, and if the total available biocellulose is included as feedstock (corn stovers) - then voila in a single year the 5% inroad which ethanol has made over the past decade (last month it was 5% by volume of all transportation fuel) then that could almost double *in a single year* to 10% (as long as the price stays high) That is almost approaching paradigm shift proportions! It could be even more than 10%, if the plan by Canadian provinces such as Saskatchewan to build a large infrastructure for grass-based (wheat) biofuel is put into place soon. Canada is already the largest supplier to the US of petro-fuel and with lots of underused land which will not support corn. This is shocking to some insiders (OPEC for sure). It could keep oil prices down for at least another year, even if higer demand returns next summer. Ten percent doesn't sound like a lot to casual observers - but with domestic prodcution of gasoline accounting for only 40% of usage- it represents about one quarter of that! Despite what the experts say: could it be that this years gigantic grain harvest is the main reason that the price of oil has dropped by more than half in recent months? It is not the only reason, as the miles-driven are slighly lower and growth in China has slowed, but it may be a significant reason - and one that OPEC underestimated. Will they try to correct things now, or can they even if they wanted to? That full 10% for biofuel next year will NOT happen for a number of reasons besides normal economic inertia, not the least of which is the expected amount of payola which will be arriving from the segment of BigOil which has been too lazy to get into the Ag-act. Sure there will be a shift over from the Republican bagmen to the Democrat bagmen following the election (assuming the polls are correct) but where will those grandiose campaign promises end up? I hate to say it - but 'money talks', now more than ever - and after all is said and done (in political lies and promises) - yup: probably it is back to "business as usual" ... or almost 'as usual' as it can be, with slight changes around the edges. There could possibly be some light taxes (for show) on BigOil, slightly less generous tax incentives for biofuel, there will be a big bump in the minimum wage, a few troops brought home etc -- but maybe all that "lack of" drastic immediate change is a good thing, in a way. We do not want to risk another JFK-style of coup d'etat (oops, 'enforced realignment of priorities'), yet no one can doubt that there are more phoney-baloney jobs at stake in the Pentagon and the DC beltway than anywhere else on earth. Jones
