There’s must read article on the biofuels industry in today’s Wall Street Journal… The full article is subscriber content but here’s the extract:
The biofuels revolution that promised to reduce America’s dependence on foreign oil is fizzling out.
Two-thirds of U.S. biodiesel production capacity now sits unused, reports the National Biodiesel Board. Biodiesel, a crucial part of government efforts to develop alternative fuels for trucks and factories, has been hit hard by the recession and falling oil prices.
The global credit crisis, a glut of capacity, lower oil prices and delayed government rules changes on fuel mixes are threatening the viability of two of the three main biofuel sectors — biodiesel and next-generation fuels derived from feedstocks other than food. Ethanol, the largest biofuel sector, is also in financial trouble, although longstanding government support will likely protect it.
That the biofuels industry is struggling shouldn’t come as a surprise to anyone. Biofuels like biodiesel and Ehtanol may one day prove to be viable alternative sources but we’re not there yet. Whether we like it or not the world runs on fossil fuels and will continue to do so for foreseeable future… No amount of wishful thinking or government subsidies is going to change that.
We have significant oil, natural gas and coal reserves in this country, not exploiting them strikes me as supremely foolish.