Biofuels industry challenges OPEC view in FT advertisement

Written by Giles Clark, London
Wednesday, 16 July 2008

The world biofuels industry today (16th July) issued a sharp rebuke to the Organization of Petroleum Exporting Countries (OPEC) and its president, Chakib Khelil, in the pages of the Financial Times. In a full page advertisement, the biofuel industries of Brazil, Canada, Europe and the United States took the oil cartel to task for what they say are outrageous, misleading, and unsubstantiated claims about the role of ethanol in world oil markets.
“Efforts to obfuscate and mislead the public about biofuels will do nothing to alleviate the energy crisis gripping the world. We realize that biofuels may be reducing your windfall profits. But, perhaps, the time for OPEC to face some competition has finally arrived,” the groups wrote.
The groups –- the Canadian Renewable Fuels Association (CRFA), the European Bioethanol Fuel Associations, the Brazilian Sugarcane and Ethanol Industry Association (UNICA) and the US Renewable Fuels Association – were answering the charges by OPEC that ethanol was in part responsible for the soaring price of crude oil, a price that will fetch OPEC nations more than $1.2 trillion dollars this year alone.

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Gas 2.0 – Opinion: Biofuels, Food Prices and Global Warming Roundup

The current rate at which biofuels are falling out of favor is largely founded on biased ideologies, which have been shaped by widespread political and corporate agenda-pushing from all sides of the fence.

But first, a digression.

Part 1: When an egg was just an egg

I remember a time when an egg was just an egg. Nobody argued about that. It was a blissful time. Yet, for all its strengths, it was a fragile time held together by unsupported conclusions and limited knowledge.

Part 2: The Time of the Bad Egg

Like many a simple concept before it, the idea of an egg as “just an egg” was consumed in a storm of health consciousness and bad hair. I shall call this storm “the 80s.” Richard Simmons was sweating to the oldies, and cholesterol, it was determined, should be ripped from your body. Just like that, eggs were bad.

Part 3: The Time of Ambiguity; When an Egg is Only Halfway Decent if Eaten in Moderation

Luckily for us, we snapped out of the 80s. Sweatbands disappeared and Jazzercise faded from our collective memory. We got around to doing some research and found that there are such things as good cholesterol and bad cholesterol. Turns out you need some of both to remain healthy. And eggs were good again…. but only if you eat less than 7 a week.

Part 4: The Point

From a human health perspective eggs are confusing, and still not very well understood. They’ve been researched to death, yet we still don’t know exactly how they interact with the human body. The only thing I can say about eggs with any confidence is that in ten years time, new research will make the case for eggs even more confusing, yet people will still eat them.

And eggs are tiny.

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High Oil Prices? Blame Ethanol, OPEC Says

By: Keith Johnson (Wall Street Journal)

Ethanol is on the ropes because of the food versus fuel debate, but now a new heavyweight just stepped into the ring and this one has got some really big guns.

OPEC president Chakib Khelil has a new culprit for the rising cost of oil–ethanol. Mr. Khelil says about 40% of the recent rise in oil prices can be chalked up to ethanol, which accounts for about 1% of the world’s transportation fuel. The other 60%, apparently, is due to a weak dollar and “geopolitical worries.” The problem: OPEC’s boss doesn’t lay out the logic explaining why ethanol blended into gasoline is to blame for high oil prices.

Why ethanol falls afoul of big oil producers and oil companies is easier to explain. Oil companies don’t want to be forced to shell out for a whole new infrastructure for ethanol, from pipelines to special gas pumps. And ethanol blends in gasoline do make gas supplies go further–not good news for producers at a time when high prices are already starting to dent demand for gasoline, in the U.S. at least.

Big Ethanol is striking back. The world’s four largest ethanol lobbies, The U.S. Renewable Fuels Association, the Canadian Renewable Fuels Association, the European Bioethanol Association, and Brazil’s Sugarcane Industry Association joined forces in a full page open letter to Mr. Khelil published in the Financial Times on Wednesday.

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