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Politics : Rat's Nest - Chronicles of Collapse -- Ignore unavailable to you. Want to Upgrade?

To: Wharf Rat who wrote (502)	6/23/2005 11:35:42 PM
From: Wharf Rat	Read Replies (1) \| Respond to of 24210

Biofuel increasingly competitive if oil surge lasts Tue Jun 21, 2005 10:32 AM ET By Sybille de La Hamaide 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. Last year the world produced about 30 billion litres of fuel-ready ethanol from fermenting and distilling mainly sugar or corn. In oil terms, that's more than 500,000 barrels per day (bpd), two percent of global gasoline use. The European Union last year set a non-binding target of 5.75 percent biofuel content by 2010, but missed a more modest 2 percent target this year; Japan allows the use of up to 3 percent ethanol, but does not require it. The United States, the world's top oil consumer and No. 2 biofuel producer, set a target of doubling ethanol production to 8 billion gallons by 2012 -- over 500,000 bpd and more than 5 percent of current gasoline use today.reuters.com