01/27/09 Growing Biofuel Industry

Growing Biofuel Industry. I'm Greg Martin with today's Line On Agriculture. The biofuels industry faces a lot of challenges. Number one, it is up against the giant oil industry. It is a relatively new fuel solution that still has some kinks to be worked out and also depending on the price of a barrel of oil, can be viewed as a Godsend or unnecessary. But Brook Coleman of the New Fuels Alliance says without these issues and more, the entire nation will face challenges that are even tougher. COLEMAN: The Middle East now controls 66 percent of proven oil reserves. So we're talking about countries like China and India joining the United States and needing a lot of oil and oil is increasingly in small places, places that are going to create problems and confrontation. Coleman says there is a good reason many states have been so supportive of the biofuels industry. COLEMAN: 80 cents of every dollar spent on petroleum is out of the state because these companies are multi-national. The shareholders are from somewhere else. For the most part the infrastructure is somewhere else and we're not making it here. If you buy biofuels from a locally owned bio-refinery the 80 cents on the dollar stays. And he believes the current economic problems could be an opportunity. COLEMAN: Agriculture is the key to the new energy economy. The other thing is i think biofuels are the key to agricultural revitalization. Coleman says that there doesn't seem to be a perfect solution. COLEMAN: It's amazing to me how quickly people forget that ethanol bailed us out of a problem, a very big national problem that a lot of the same people who are now criticizing ethanol had a big problem with. So they said, "We've got to ban MTBE and now they say now we don't like ethanol. Well you get to the point where you say, "Well what do you like?" Because we're going to have to put some octane in the fuel. We're going to need a locally-produced fuels and none of these solutions are perfect. According to Coleman the government needs to step in and help stabilize the new biofuels industry. COLEMAN: A lot of people say, "well $1.75 for gasoline, that must be killing you." Well what's largely killing the biofuels industry is not just that, but it's the fact that it used to be $4 yesterday. And so an investor looks at that and goes, "oh man!" We've got to figure out as a government how do we take some of that risk out. That's today's Line On Agriculture. I'm Greg Martin on the Northwest Ag Information Network.