With world oil price at $40/barrel and dropping.... Is ethanol still viable?

[ghosthunter]

Just a random thought...

"Green" issues aside, with the sharp drop of world oil prices to $40 per barrel range and potentially going even lower, is ethanol production still a viable venture?

At present, it is much more expensive to produce a liter of ethanol than to produce gasoline. At the same time, biodiesel has also become expensive with the return of cheap diesel fuel.

Is it worth the economic cost especially with the world economic crash, to continue funding ethanol and bio-diesel?

[uls]

that's what i've been saying...

low oil price discourages investment in alternative fuel/energy

oil price has to be high enough to justify investing in alternative fuel

wasnt high oil price the reason why people want an alternative fuel?

now that oil price has fallen, the incentive to invest in alternative fuel has diminished

Even investment in oil production has been reduced due to low oil price

---

http://uk.news.yahoo.com/22/20081203...b-20b2d2f.html

Low energy prices squeeze investment in the oil industry, reducing future supplies. They discourage energy saving and they destabilise countries dependent on oil exports, making oil in the future more likely to be expensive and even more volatile.

Perhaps most important of all, low energy prices stifle investment in alternative energy, deepening dependence on oil and other hydrocarbons and increasing greenhouse gas emissions.

Short term, low oil price is good. But long term...

"In the very short term, because we are in a recession, we could all use a low oil price," said Mike Wittner, global head of oil research at French Bank Societe Generale. "It is like a tax break, putting money back into pockets for a short time."

"But in the longer term, today's oil price is too low to support much new supply and will slow the momentum towards alternative fuels, new technology and conservation."

[niky]

It'll all depend on political will... whether the need to seem green outweighs primary economic concerns. It's green politics, mostly, that makes for "cheap" biofuels. As governments start focusing on more worldly concerns, it's possible that the free ticket some "green" technologies get will be scrutinized further... as people once blinded by the promise of oil alternatives start to realize the enormous cost of these projects.

I hope, though, that the investment in alternative power sources for electrical grids continues strongly... while there aren't that many cost-effective alternatives to "fossil" fuels for portable (vehicular / kitchen) use, at least a well-diversified electrical grid will ease up crude and coal demand in the future.

With the automotive market crashing, it may be some time before we see companies in the fiscal position to start spending big bucks on alternative fuel research again.

[kinyo]

Any alternative fuel should be pursued relentlessly.

Just today, the price drop was reversed. Opec plans to cut production to halt the price drop, the market reacted accordingly. It looks like the roller coaster is on uphill again.

[uls]

For now, the uptrend won't hold

minimal lang ang effect ng OPEC cut

there's very litte demand

and speculators are not rushing into the oil market like they did last year and first half this year

and the dollar isnt crashing like it did last year and first half this year

wala ung mga factors na nagpapataas sa oil price

[ghosthunter]

Any alternative fuel should be pursued relentlessly.

Just today, the price drop was reversed. Opec plans to cut production to halt the price drop, the market reacted accordingly. It looks like the roller coaster is on uphill again.

OPEC cutting production is a joke. Its like asking seller1, seller2 to cut production while seller3 simply sells as much as he wants in complete disregard to previous agreements.

[niky]

Yup. Not all of OPEC will back another production cut.

Cut to what? To raise prices? So you'll sell half the gas at twice the price when nobody's buying, anyway? You're still not making enough money to support your country, that way.

[ghosthunter]

Even the sales of electric cars in the UK has already fallen by half since the drop of oil prices even with all the incentives given to promote the electric cars.

[uls]

Low oil price = more consumption

U.S. Gasoline Demand Up First Time Since April, MasterCard Says
http://www.bloomberg.com/apps/news?p...d=aPWsH3fmPauc

Dec. 9 (Bloomberg) -- U.S. gasoline demand rose last week for the first time since April as prices at the pump fell further, SpendingPulse by MasterCard Inc. reported today.

Motorists bought an average 9.331 million barrels of gasoline a day in the week ended Dec. 5, up from 9.302 million a year earlier, MasterCard, the second-biggest credit-card company, said in its weekly SpendingPulse report.

Last week’s gain coincided with a 7-cent drop in retail gasoline prices.

[ghosthunter]

But with the slow economy, the rise in fuel demand in the US might just be holiday driving (shopping, vacation, etc).

[donbuggy]

What if our government imposed a higher fuel tax?

Reasons:
1) To encourage people to switch to vehicles with better fuel economy.
2) To encourage people to take public transportation.
3) The additional revenue can be used to pay for alternative energy research.

[rion]

the dillima is still fresh, the downfall of world economy is also contributed by high prices of oil. I believe alternative fuel solution will stay... unless by 2012 40$/barrel parin.

btw, recently, I have seen increase of vehicle running on the roads again. or maybe just a normal figures on holiday season?...

[ghosthunter]

What if our government imposed a higher fuel tax?

Reasons:
1) To encourage people to switch to vehicles with better fuel economy.
2) To encourage people to take public transportation.
3) The additional revenue can be used to pay for alternative energy research.

4) To encourage more corruption to line the politico's pockets with even more public money.

IMHO, it won't happen. And when did the philippine government really spent for anything for REAL research into alternative sources of energy? All we do is take what is already available in other countries and stamp our own label on it and say it was developed by "pinoys". This includes windfarms, solar power systems, ethanol, bio-diesel, and electric vehicles.

Another is with the coming election, raise fuel prices by imposing another tax will be too unpopular with the masses who need cheaper fuel like taxis, jeeps, buses and the private cars as well.

[ghosthunter]

btw, recently, I have seen increase of vehicle running on the roads again. or maybe just a normal figures on holiday season?...

Normal for the season. This is the season I cut down on my driving simply because it takes me more than twice the time to get anywhere in the metro.

Just like yesterday, what typically takes me 30 minutes to drive, took me nearly 1.5 hours because of the bumper-to-bumper traffic at all the roads between point A and B.

[uls]

btw, recently, I have seen increase of vehicle running on the roads again. or maybe just a normal figures on holiday season?...

Holidays and also those people who abandoned their cars when fuel prices was sky high are now driving their cars again

the downfall of world economy is also contributed by high prices of oil

yup oil is part of it

$140+ per barrel oil pushed the world into recession

[niky]

What if our government imposed a higher fuel tax?

Reasons:
1) To encourage people to switch to vehicles with better fuel economy.
2) To encourage people to take public transportation.
3) The additional revenue can be used to pay for alternative energy research.

1. Fuel prices already do that. And as we have a huge increase in tax once you move from economy cars to "luxury" cars with bigger motors, as well as a large increase in registration costs (amazing what's considered "luxury" nowadays by the LTO), this is just doubling the cost for people. I'd rather they lowered taxes for vehicular purchase and registration and tax the fuel alone... people who use more gasoline use the roads more, and they can take the cost for road maintenance out of the fuel.

I've always felt this should be the way to go. One person who uses his Honda Civic to go tens of thousands of kilometers every month for various "road tripping" reasons makes the Philippines more oil-dependent than a family that uses its SUV to go to the malls once a week. The person who actually uses more gas should pay more tax... not the other way around.

2. Of course, if we increase taxes on fuel... will we exempt public transport? They already get a tax cut on fuel... and yet they complain the loudest. If we, the private motorists pay, everyone should pay.

3. GH already mentioned the problems with this. I'd rather they put that money into our road infrastructure.