Jul 21 2008
The world biofuels industry issued a sharp rebuke to the Organization of Petroleum Exporting Countries (OPEC) and its president, Chakib Khelil, in the pages of the Financial Times. In a full page ad, the biofuel industries of Brazil (http://www.unica.com/), Canada (http://greenfuels.org/), Europe (http://www.ebio.org) and the United States (http://www.ethanolrfa.org/) took the oil cartel to task for outrageous, misleading, and unsubstantiated claims about the role of ethanol in world oil markets. The biofuel trade associations’ ad pointed out the very real competition biofuels is proving to be for oil producers.
“Efforts to obfuscate and mislead the public about biofuels will do nothing to alleviate the energy crisis gripping the world. We realize that biofuels may be reducing your windfall profits. But, perhaps, the time for OPEC to face some competition has finally arrived,” the groups wrote.
The groups –- the Canadian Renewable Fuels Association (CRFA), the European Bioethanol Fuel Associations, the Brazilian Sugarcane and Ethanol Industry Association (UNICA) and the US Renewable Fuels Association – were answering the charges by OPEC that ethanol was in part responsible for the soaring price of crude oil, a price that will fetch OPEC nations more than $1.2 trillion dollars this year alone.
“According to the International Energy Agency (http://www.oilmarketreport.org/), ‘biofuels have become a substantial part of faltering non-OPEC supply growth, contributing around 50% of incremental supply in the 2008-2013 period,’” the groups pointed out. “Without the growing production and use of biofuels worldwide, IEA calculates that more than one million barrels per day of new oil production would be required.”
Moreover, “The growing volume of biofuels in the global fuels market is helping to keep world oil and gasoline prices lower than OPEC may like. A recent Merrill Lynch analysis shows that biofuels keep world oil prices 15% lower than they otherwise would be.”
Indeed, the groups highlight the fact that gas prices in Brazil have not gone up in two years as a result of that nation’s increasing use of ethanol. In the US, gasoline prices would soar by $0.50 per gallon if ethanol were removed from the market.
Wild claims and the use of inflammatory language by OPEC and its leaders betray the very real threat biofuels poses to the cartel
The groups wrote that, “...for more than a generation, OPEC has held the world over a barrel. When it has suited the cartel, OPEC has forced the price of oil down, effectively killing off any alternatives that might prove competitive…As the world biofuels industry evolves, new feedstocks and technologies will usher in greater production and begin to supplant even larger volumes of petroleum. This movement toward diversified energy supplies, increased efficiency and greater competition is crucial to the sustainability of future generations, including those in OPEC nations.”
As the unsubstantiated criticisms of biofuels have been increasingly propagated by OPEC, big oil, big food processors, and others who view biofuels as a threat, the world industry is increasingly working together to prevent the misguided, profit-driven agenda of these interests from obscuring the truth about ethanol and biofuels.
Recently, these groups have written to the leaders of the United Nations (http://www.ethanolrfa.org/objects/documents/1734/letter_to_fao_director-general.pdf) and the G8 (http://www.ethanolrfa.org/objects/documents/1799/g8letter_fnl.pdf) to encourage a more measured, thoughtful approach to world’s energy, economic and environmental future, in which biofuels must play an important role.
The ad can be seen in the July 16 print edition of the Financial Times or viewed online at www.GoodFuels.org/opec.