Last month, I wrote that instead of a 20 cents/pound subsidy for
biofuels, I would rather see a 20 cents/pound subsidy go to
farmers.
2009 was a very tough year for biodiesel. Robert Rapier wrote, at The Oil Drum: “The wheels came off the biodiesel wagon.”
How disastrous was 2009?
Per the National Biodiesel Board (NBB), here are the statistics from the past 6 years of biodiesel production:
2004: 25 million gallons
2005: 75 million gallons
2006: 250 million gallons
2007: 450 million gallons
2008: 700 million gallons
2009: 300-350 million gallons (estimate)
The NBB also reports that domestic biodiesel capacity is now operating at only 15%. There have been a number of stories in the past few days covering these developments.
That’s a bad start to 2010, after a “rough year” for the entire biofuel industry.
this is unfortunate, it could have been a worthwhile endeavor for hawaii in creating a new industry…is it still achievable?
Hi Noel:
Here is a simple way to look at the economics. A barrel of oil weighs 286 pounds, at $80 per barrel each pound of oil is worth 28 cents. Say a farmer needs to grow four pounds of stuff to get one pound of liquid, then that farmer can get no more than 7 cents per pound to grow that stuff. No sense, lose money. Say, the farmer needs four times that amount or 28 cents per pound for the stuff. Then, the price signal to encourage that would be $320 per barrel oil. That would not happen for a very long time. Although it feels expensive, oil is actually very cheap for the energy content it possess.
Aloha
Richard