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  1. Join Date
    Oct 2002
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    29,320
    #1
    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?


  2. Join Date
    Nov 2005
    Posts
    39,082
    #2
    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."
    Last edited by uls; December 8th, 2008 at 06:40 PM.

  3. Join Date
    Aug 2004
    Posts
    22,710
    #3
    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.

    Ang pagbalik ng comeback...

  4. Join Date
    Oct 2002
    Posts
    2,712
    #4
    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.
    Last edited by kinyo; December 9th, 2008 at 12:30 PM.

  5. Join Date
    Nov 2005
    Posts
    39,082
    #5
    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

  6. Join Date
    Oct 2002
    Posts
    29,320
    #6
    Quote Originally Posted by kinyo View Post
    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.

  7. Join Date
    Aug 2004
    Posts
    22,710
    #7
    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.

    Ang pagbalik ng comeback...

  8. Join Date
    Oct 2002
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    #8
    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.

  9. Join Date
    Nov 2005
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    39,082
    #9
    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.

  10. Join Date
    Oct 2002
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    29,320
    #10
    But with the slow economy, the rise in fuel demand in the US might just be holiday driving (shopping, vacation, etc).

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