Biofuel: February 2008 Archives
In our earlier blog entry we
suggested that there are two directions for the burgeoning biofuel industry to
take (see Whither Biofuels, December 13, 2007). These two directions are not mutually exclusive - given the right
circumstances, either or both of these directions could be taken. One direction
involves the creation of liquid fuels from various forms of plant material - specifically, products such as ethanol or biodiesel that can be used to power
vehicles. The other direction involves the production of solid fuels that can
be used as an energy source to compete with the likes of coal. In this entry,
we focus on the Canadian Prairies and consider what these two paths mean for
land use and biofuels policy in this region.
Continue reading From Bread Basket to...Fuel Tank?.
Whenever crop prices rise
analysts are often asked to predict how long the rise will last. Making price
forecasts involves looking at past trends, current drivers and commodity price
cycles. Commodity price cycles typically follow the pattern of long periods of
low prices with short price peaks in between the price troughs. Strong prices
are short-lived because high prices encourage investment, which increases
production, resulting in an oversupply and subsequent price decline. Is this
current price peak just another blip in the commodity cycle or has something
changed? I would argue these high prices might last longer because of three
factors in particular: (1) growing economies in China and India; (2) Hubbert's
Peak, and; (3) U.S. biofuel policy.
Continue reading Will the boom last?....Maybe..
