Will green fuel make a difference?

[ianben]

EU has dictated all road fuels must be 5% green by 2010. Canada has a similar proposal I believe.Kyoto driven but if I read it right mandatory. US also promoting/legislating green fuels must be used.

Does this mean before the oil companies can sell a gallon of the oil they get for next to nothing from the ground they have to buy something we grow?

Anyone know the numbers involed?

How many tonnes, how many acres switched from food to energy?
Enough to significantly increase demand and remove oversupply?

Perhaps the biggest question

What will a rich oil company pay when without our product it can no longer make a sale?

[cowman]

Ian: Don't know how you figure the oil companies get oil for next to nothing from the ground? It can be a very expensive process and a portion of the production must go to either the government or the freeholder in royalty payments?
The government use of force to include blended bio products is the only way it will happen because frankly bio fuels cannot compete with petroleum...at this time.
In Canada pretty well the only entities building bio fuel production centers are the oil companies? I doubt they would have much of a problem contracting cereal/oilseed production if the market for raw material got too volitile? The oil companies are heavy hitters who know their business and it is doubtful they would be held hostage for any length of time.

[ianben]

cowman
I agree biofuels cannot compete with oil from the ground this was the free I was refering to.I know its not easy in any business
Last years price rises made oil companies incredulous profits though.

Looks like they will be forced to use the money to build ethanol plants and blend biofuel and subsides farmers.

Now we are told we are over producing food but not by very much. A weather event still sends markets up so what effect will these acres/tonnes switched to energy have.

Charlie Lee does anyone have an estimate on acres/tonnes needed to fulfil the biofuel comitment governments have asked for?

[cowman]

Ian: I am not against bio fuel. If nothing else it gets rid of some of the lower grades of cereals and oil seeds. I really don't think it does much for the environment at a 5% blend but it sounds good for the eco freaks!
I am involved(in a very small way) in a proposed bio gas plant in Alberta. The thing is a complete joke financially but hey you have to start somewhere? The only way it can work is with government money and carbon tax credits...sort of like "farming the government"! However somewhere down the road the technology and research done on these pioneering projects is going to pay off in a big way...maybe?
I doubt ethanol/biodiesl production will have a huge long term effect but it might help for awhile until the big oil companies figure out a way to cash in on the government largesse?

[dalek]

It depends on whether they also mandate that the biofuel be made with local grain. The US soy growers recently found this out, when the biodiesel mandate they lobbied so hard for, thinking it would mean more demand for soybeans, instead encouraged large amounts of palm oil from central America to come in because it's cheaper to produce than soy oil. Likewise ethanol is cheaper to produce from sugar cane in the Caribbean than from corn.

[ianben]

I am just trying to get an idea on the numbers here.

How many acres will need to be switched from food to energy to fulfil these "green" mandates.

Will it matter where these acres are switch so long as that land no longer produces over supplied food.

Palm oil swictch to energy will no longer be in competition with soy and canola oil will it.

Will this new demand be the same as drought or el nino?
What numbers are we taking to produce all this green fuel?

[ianben]

Cowman
I visited a biogas plant in Sweden last May. Very interesting offal from large slaughter house piped as slurry to reduce smell, waste fats and cosmetics where all mixed together to feed methane making process cow slurry added at about 3% to stop foaming. 365 days operation, holidays at slaughterhouse where a problem as raw material stopped. Nearly the whole towns transport system ran on the methane produced. Will see if they had a web site and post it if I find it.

Here is a video of the plant I visitedhttp://news.bbc.co.uk/2/hi/science/nature/4373440.stm

[wd9]

Ianben, and numbers you shall have.

26 billion litres diesel burned in Canada.

5% renewable fuel strategy provides a requirement of 1.3 billion litres biodiesel to be implemented by 2010.

1.3 b litres is around 1 million tonnes of oil, or around 2 million tonnes canola for example which would probably be required for its cold flow properties and oxidative stability here in Canada.

[ianben]

Wd9
Thanks for the numbers
2 million tonnes of canola.
A significant amount dont you think?

What is that as a percentage of average production?

Would there also be a wheat requirement for ethanol in petrol.

One figure I have seen puts EU surpluses all used up and needing to import 15million tonnes of wheat or equivlent by 2010.

2010 is only FOUR harvests away.

Is not this a huge increace in demand in a very short time?

Will it impact on price?