Alternative energy now going after OPEC

In Response to: Why Thursday May Be a Big Day for Wind Power

by Joseph Ratner

In addition to wind, other alternative energy interest appear to getting feisty and are even standing up to big oil this week.

A coalition of international biofuels organizations appear to have launched an attack on the oil industry cartel OPEC. In an open letter to OPEC president Chakib Khelil published in today’s Financial Times, the Canadian Renewable Fuels Association, European BioEthanol Fuel Association, Sugarcane Industry Association and the Renewable Fuels Association accuse the oil cartel of spreading false claims about ethanol and biofuels to protect their monopolistic hold on world energy supplies and further increase their profits linking to skyrocketing global oil prices.

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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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