Biofuels Pay Big Dividend
One question we’ve been asked a lot lately is: “haven’t lower oil prices reduced the interest in your technology?” It’s a fair question, but a bit misguided. While short-term declines in oil prices are driving down the cost of gasoline, today’s price does not reflect the long-term realities of the petroleum market. The big picture is framed not by today’s cost of oil, but rather by some irrefutable fundamentals that will drive the pace and value of renewable energy technologies for the rest of the century.
First, any way you slice it, petroleum is NOT a renewable source of energy. Whether it’s 2020 or 2120, at some point, humanity will have exhausted the earth’s stores of exploitable petroleum. It’s not a question of “if”, but “when”. Ultimately, there’s no escaping the need for sustainable replacements maintain our quality of life and to continue the growth necessary to extend it to more communities and individuals on the planet.
Second, and more urgent, the total cost of oil – including the environmental impact – will continue to rise inexorably. Why? Because the technology extracting oil from more distant locations – such as the deep sea – and more complex media – such as tar sands – are more energy intensive and release ever-more greenhouse gases (GHGs).
A study just released by the American Coalition for Ethanol (ACE) put it quite nicely:
“Production of crude oil from sources such as tar sands and coal… have considerably higher GHG emissions than biofuels. Depending upon the energy source used in the mining of tar sands, well-to-pump emissions can be over 300% of conventional crude oil.”
So, while technological advancement in petroleum production will require ever greater releases of carbon to be successful, technological advancement in alternative sources – such as cellulosic ethanol – will produce ever declining atmospheric carbon from human transportation. “The bottom line is that ethanol is becoming even cleaner and more efficient, while petroleum is becoming more costly and more harmful to the environment,” said Brian Jennings, Executive Vice President of ACE.
Now, which do you think investors prefer: dividends or taxes? Regardless of day-to-day oil prices, the growing carbon dividend of alternative energy technologies, versus petroleum’s ballooning carbon tax, demonstrates the clear long-term economic superiority of alternative fuels.
