Better catalysts aren't the only route to cheaper biofuels. Evogene, an Israeli company, has used genetics to produce a line of castor beans that can grow during Brazil's dry season, when fields are otherwise fallow, and says the pressed oil can be used directly for fuel, according to Biofuels-news.com. Biofuels-News.com.
Afeyan thinks it will take several years, but biofuels could eventually deliver nearly 10% of our energy needs. Doesn't sound like a lot, but in the oilpatch supply and demand are finely balanced. Getting 10% of supplies from technologies that cost under $2.50/gallon could have a profound impact on prices.
Afeyan thinks the growth of new middle class economies in places like India, Brazil, and Africa will offset this new supply, but shale oil has already produced a relative energy glut in the United States, with natural gas prices that remain below $4/mcf and a "spread" between our oil prices and world prices that remains in place despite a rush to export.
There are many forms of renewable energy, and the costs of all of them decline all the time. Whether solar energy, wind energy, and biofuels are currently cheaper than fossil fuel competition is an open question. Fact is, they're getting cheaper, and more plentiful. The cost of efficiency, doing more with less, is even lower.What happens in the oilpatch when owners of reserves start to think that what's in the ground is worth less than what they are currently pumping? It's inconceivable, but as we've seen throughout economic history what seems inconceivable has a habit of coming to pass. At the time of publication the author had no position in any of the stocks mentioned. Follow @DanaBlankenhor This article was written by an independent contributor, separate from TheStreet's regular news coverage.
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