Cellulosic ethanol, not regular ethanol. Regular ethanol only uses the starch from the plant. Cellulosic ethanol is able to use the entire plant.
And one of these days, somewhere in the future, it may arrive. Especially once the numerous technical issues are solved, and once you get to a cost point where developing an infrastructure might be worth while.
Until then we have ready supplies of cheap oil. Not cheap now because of the weak dollar and the move of significant investment money including pension funds into the energy markets as a hedge against inflation after the collapse of the housing market. And the rampant speculation that similarly followed the housing market collapse, by the same general folk, looking for the next big wave to ride before the bubble bursts. Trading volume on crude is about 100 times what it was in 2005 according to a conference I attended earlier this week, where crude prices were a main topic of discussion in at least three of the sessions. The current positions suggest it will get worse, driven by the markets that account for about $50 on a current bbl of oil, with $30 being the devaluation of the dollar hit. Basically $80 bbl not related to natural market conditions, "big bad oil" or even evil OPEC -- but to financial policy and trading entities.
Once this current oil bubble pops -- and it MAY be sooner than expected -- all of that alternative energy that's only alternative at $40+ bbl will be long forgotten as we dump the Priuses like yesterday's tuna fish for the next Hummer on the market. Just like we have for several cycles already and will in the future. It was just 2000 when OPEC was going to really get tough and keep "high" crude prices in a basket at $22-$24 and everyone was worried about such high prices. There's little fundamentally to suggest the reality of 2000 will never return. Just like during the glory days of the 1990s and $10 bll crude there was every indication that the other reality, t1973, was not that far off as we moved to the SUV era. Only thing missing were the tailfins. All it takes is for all of the new supply coming online now at these high oil prices to surpass rapidly shrinking demand and a panic will set in on the markets.The difference between an oil glut and an oil shock is very small. A handful of percentage points, maybe less, in the supply vs demand equation. A lot of people are making a lot of money now, but the fall will be painful and hopefully only take out the speculators and not pension funds, etc.
Simple.
Also why it's so hard to get any real investment in these alternatives. We've been down this road before. We have a lot of expensive energy, but before too long oil will be back to 1990s levels. Until the process starts all over again. OPEC can make a hell of a profit at $20 - $40 and still undercut most of the biofuel and "hard oil" alternatives with ease.
Now, we could agree to a tax mechanism to keep gasoline in the US artificially high at a $40 - $60 equivalent and subsidize alternative fuels like we currently do somewhat with corn ethanol at $.45 cents per gallon and biodiesel at $1 gallon. From your pockets straight to the agriculture and biofuels industries. In the process we would encourage sensible cars and sensible driving and travel choices like they do in Europe (but to an even greater extent). But then when the market price of crude is at $15 and a gallon of gas "could" be had for $1.50 instead of the artificial $2.50 -- well, lets see the American motorist buy into that.
Charon
