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Rising oil prices making biofuels viable (moved from ATSNN)

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posted on Jun, 22 2005 @ 11:23 AM
With oil prices continuing to rise, many experts are beginning to suggest that biofuels can soon become a true alternative to the previously much cheap fossil fuels.
PARIS (Reuters) - Biofuels would be increasingly competitive if crude oil prices, which are back near all-time highs, were to go beyond $60 a barrel, officials at the International Energy Agency (IEA) said on Tuesday.

Soaring oil prices have encouraged major consumers worldwide to sharply increase their use of "green" biofuels, made from sugar cane, vegetable or grain oils.

But in most parts of the world the additional costs for producing biofuels make the fuel uncompetitive without hefty tax rebates from governments.

"Biofuels are getting more competitive due to the surge in oil prices but these would need to be somewhere between $60 and $100 a barrel for biofuels to be competitive without subsidies," IEA biofuel specialist Lew Fulton said after a seminar on biofuel options.

U.S. crude oil futures hit another all-time record on Monday at $59.52 a barrel as worries over fuel demand festered amid limited U.S. refinery capacity.

An exception is Brazil where ethanol, made from sugar cane, is competitive without subsidy when oil prices are at $35 a barrel, said Brazil's ambassador to Paris, Sergio Silva do Amaral.

The IEA renewed its estimate that all biofuels -- ethanol and biodiesel -- had the potential to reach 10 percent of world fuel use for transport by 2025.

But Fulton said a more realistic estimate was that global ethanol consumption should be between four and five percent of gasoline use by the end of the decade.

"That would be a very big achievement but a lot will depend on oil prices," he said.

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I have read that some are expecting oil to keep rising in price, possibly to the $100 a barrel plateau within the next year or so. If that's the case the oil industry seems to be shooting themselves in the foot. Once it becomes cheaper to produce and distribute biofuels, we should start seeing a shift in the industry. They are after all in business to make money.

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[edit on 22-6-2005 by yadboy]

posted on Jun, 22 2005 @ 12:07 PM
I agree with the idea that new forms of energy must be explored and implemented as soon as poosible. As of this morning a barrel of crude oil hit $61 and there doesn't seem to be any end in sight.

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