[Fwd: [biofuel] VW presents new synthetic fuel strategy]

[Bill Stewart]

At 02:54 PM 10/26/2001 -0500, Harmon Seaver wrote:
>        Biodiesel is being sold in the US as we speak for anywhere from $.99
>to $2.50 a gallon, depending upon whether it's made from waste or virgin
>vegetable oil. Given the economies of scale working here, once they build
>up a larger presence, those prices will drop. And, if I'm not mistaken,
>much of Europe is already mandating that all diesel be sold with at least
>20% biodiesel.
>         You might also look at Brazil which fuels a large portion of it's
>vehicles with ethanol already.
>           VW's new fuel will be even cheaper.

Making biodiesel from virgin oil scales well, since you can use
non-food-grade oils, but there's still a substantial ecological effect
of converting land from non-farming or food-farming to energy-farming.
Waste vegetable oil has a much different scaling ability -
until you get most fast-food french-fry leftovers used for fuel oil,
it scales up really well, but after that it hits the wall.

Ethanol has similar problems - you need to grow a lot of sugary or starchy 
crops,
which not only displace food crops (having similar land needs),
but at least in third-world countries tend to be grown by
slash-and-burn agriculture, which rapidly destroys land, usually rainforest.

On the other hand, for an area that doesn't have oil,
the tradeoff between wasting farmland for energy crops and
using it for export crops to buy energy from outside could go either way.
Of course, when the "area" has government boundaries defining it,
especially in the third world, there tends to be a huge amount of
social policy and/or corruption distorting the market prices.
But sometimes you can exploit other governments' corrupt social policies,
e.g. grow cocaine or opium and buy oil or food or toys with the profits.