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Resistance to the Emerging Bio Fuels Market

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Michael Spencer

Michael Spencer

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Bio fuels have met resistance from a number of different sources. The oil industry and automobile manufacturers have lobbyists focused on ensuring that the energy transportation sector remains firmly entrenched in petroleum. A strong lobbying arm combined with significant campaign contributions to key congressman and senators has resulted in an emerging U.S. bio fuels industry steered into first generation ethanol production based on inefficient corn utilization. Oil producers have significant investments in current technology and extraction processes and would prefer to avoid expensive infrastructure and development costs associated with extensive deep water off shore drilling or oil extraction from shale and oil sands deposits. Allowing substitutes, even blends as low as 5% threaten the balance and opens the door to increasing requirements from governments and the public for higher concentrations of bio fuels in the blends, which could potentially reduce the demand and price.

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