Tweet

Apr 23, 2008 3:19 PM

Rapid development of advanced biofuels is the key to reducing reliance on oil and global food prices, and ongoing advances in industrial biotechnology are helping achieve that goal. Brent Erickson, executive vice-president of the Biotechnology Industry Organization’s Industrial & Environmental Section says: "A newly released economic analysis shows that oil prices and speculative investments by hedge funds in agricultural commodity futures are playing the largest role in driving up food costs."

A new study recently released by the Agricultural & Food Policy Center at Texas A&M University demonstrates that higher energy costs and $100-per-barrel oil have had the most significant impact on food and grain prices by increasing the cost of production. It also shows that speculative investment activities have increased price volatility within grain markets, raising prices for food. Due to these factors, the analysis concludes, relaxing the new Renewable Fuel Standard and reducing production of biofuels would not lower grain prices.

The study is available at: www.afpc.tamu.edu/pubs/2/515/RR-08-01.pdf

The 2007 Renewable Fuel Standard caps conventional ethanol production at 15 billion gallons and requires the production and use of 21 billion gallons of advanced biofuels by 2022. The combined total of 36 billion gallons will amount to about 20 percent of US transportation fuel needs. Next-generation biofuel technologies that use cellulosic feedstocks are currently being commercialized.

On April 18, Department of Energy Secretary Samuel Bodman announced selection of pilot projects for increasing production of advanced biofuels from paper pulp, switch grass and corn residue. The small-scale biorefinery projects will develop and test new conversion technologies that can be scaled up for increased production.

"These pilot projects will utilize the newest advances in biotechnology and help to make large-scale production of biofuel from non-food sources a near-term reality," Erickson said. "With these three projects, there are now 29 advanced biofuel refineries planned or under construction. This continuing research and development is vital to meeting the Renewable Fuel Standard’s challenge for bringing increased amounts of advanced biofuels to American consumers over the next 15 years, which will help reduce the reliance on oil that is now, ironically, affecting food prices."