BioFuels

Things are happening in the field (excuse the pun) of BioFuels. In case you’re not altogether clear on what BioFuels are my favorite “quick reference” source, Wikipedia, has a nice article on it.

Of the many energy related blogs that I follow these days are some of the more interesting and recent developments.

From New Energy and Fuel

“A Biofuel Process that Works”

“Another Way to Bio Gasoline”

That Scum is FUEL!

From Green Car Congress

Solazyme Introduces Its First Algal Biodiesel, Enters Development Agreement with Chevron

This is just the tip of the iceberg. My Google-fu reveals almost two million hits.

The price of diesel is affected by many factors in the supply and demand equation. For those not familiar with that equation, it indicates that a high demand item will be higher priced when the supply is low than when the supply is adequate or high. Consequently there are (at least) two ways to decrease the price of diesel. One is to increase the supply. The other is to decrease the demand.

Decreasing the demand is happening. For those of you reading this you’ll note that I’ve been haphazardly following the development of Hybrid Electric trucks. There are also hybrid electric personal cars. Quite a few of them actually.

Nuke is back, better than ever, as are other Alternate Sources of Energy. (I’ve hauled quite a few wind tower sections myself, they’re going up everywhere)

This decreases the cost over time. This is what happened in the first “energy crisis ” back in the seventies. OPEC raised the cost. Americans conserved and improved the fuel economy of cars and trucks and OPEC saw the writing on the wall and caved, increasing the supply, thus taking the wind out of the sails of many budding alternative fuel enterprises.

Increasing the supply is also happening. In the past OPEC mostly controlled the supply of cheap and easy to get to oil. You might look into their history. It’s fairly interesting in a grisly sort of way.

Nowadays a new dynamic is in place. OPEC still controls the supply of easy to get to oil but the demand has grown so huge that even their massive supply has been squeezed. With all that oil sitting easy to get to the Fat and Happy Oil Sheiks didn’t do much in the way of upgrading their production facilities. The oil is still easy to get to but they have the equipment to get it out of the ground any faster. That creates a supply bottleneck causing the price to go up anyway. Additionally there are some interesting aspects of the psychology, politics and religion of many if not all of OPEC. In other words they don’t like us very much.

This increase in price and the fact that the Oil Sheiks have much less control over that price is a good thing in a back handed sort of way. It has to do with investment.

For a long time it’s been known how to make synthetic fuel. There’s an old method called the Fischer-Tropsch Process.

This process was developed by the Germans in the 1920’s. Oil for fuel was unavailable for them at that time so they had to develop an alternative. Since that time there have been many other methods developed to manufacture synthetic fuel. (the one I like best is Fuel from Air) which I discussed in a previous post.

New processes are being developed all the time. Most notably in my opinion are the algae-to-fuel processes that are going on line even as we speak. The supply is being increased in ways that OPEC has no control over.

In prior times if someone were to make the huge investment needed to bring one of these numerous alternate sources of fuel to the market well, OPEC could just lower the price of their oil and drive the upstarts out of business. I beleive this has happened repeatedly.

So, the high price of Oil and China’s inadvertent help in KEEPING it high might just turn out to be a blessing in disguise for us. When the prices go down and historically they have and they will OPEC will have no control.

And this time we can probably say “bye bye” to OPEC. They’re gonna be SO outa here.