Moving from Food Crop Fuels to Fuels from Waste

Big Oil may actually win the fight to stop using food crops with low-yields per acre, and help the transition to high-yield low carbon emission sources. The industry has invested over a billion dollars in advanced biofuels, algal fuel, and biotech ventures. _SeekingAlpha

When big oil companies invest $billions in biofuels, they are not doing it to waste money. Big oil doesn't want to see the big agriculture companies like ADM steal fuel profits with ethanol from corn. So, the newer biofuels will not be made from corn or food crops, but from waste and biomass.

Exxon Mobil’s CEO Rex Tillerson famously referred to ethanol as “moonshine.” Now Exxon is investing $300 million in Craig Ventor’s Synthetic Genomics with plans to produce fuel from algae. BP Biofuels was voted 2009 Biofuels Corporation of the Year by the World Refining Association at its 4th annual Biofuels Conference. BP has poured hundreds of millions into basic biofuel research and into a variety of partnerships including biobutanol with DuPont (DD) and Virgin Fuels, and energy cane in the U.S. with Verenium (VRNM) . Shell (RDS.A) has established a $12 billion sugarcane ethanol joint venture with Brazil’s Cosan (CZZ).

In the future, if biotech can deliver low-cost liquid hydrocarbons from biomass that can be profitably blended at the refinery, then Big Oil may partner with industrial agriculture. Valero (VLO), the largest refiner in the U.S., bought a number of ethanol plants at deep discounts from bankrupt VeraSun.

For now, both the petroleum producers and industrial agriculture want to control EPA regulation, federal tax breaks, and billions of federal funds. They also want greenhouse gas emissions measured their way. If growing more corn for ethanol and soy for biodiesel leads to rainforests being destroyed, then Big Oil favors that being included in biofuel emission lifecycle analysis. Big Ag is against such land-use analysis. See: Argonne Lifecycle Presentation, California Lifecycle with Land-use Studies, Renewable Fuels Standard. _SeekingAlpha

Bioenergy is to become an economic giant as long as the geopolitical climate of the planet stays on its current course. New bioenergy projects are started almost every day. Big oil, big agriculture, big chemicals, big forestry, big paper, big utilities, and even big nuclear (Areva) are all attempting to stake claims in the exploding bioenergy sector.

New cheap solar cells from IBM may help to jump-start a sluggish solar economy. If photovoltaic cells become cheap enough, clever designers will start incorporating them into the very landscape. When that happens, the need for utility-scale power storage should spur some breakthroughs.

Recent proclamations of a "doubling of capacity" of solar and wind installations, are a waste of time. Capacity for renewable energy means very little. It is the actual production and utilisation that count. Until the storage problem is solved, the idea of a large scale contribution from wind and solar is almost useless.