Biofuels Will Remain "Far More Expensive Than Petroleum-Based Fuels"

by Ship & Bunker News Team
Thursday June 21, 2012

Renewable marine fuels will remain "far more expensive than petroleum-based fuels" unless there is a "major technical breakthrough", a report by the RAND Corporation (RAND) has said.

The report, part of a four volume series of reports produced in conjunction with the U.S. Military, concluded that cutting fuel use is the "only effective choice" to reduce what the Pentagon spends on petroleum products.

It also emphasised that the future oil prices could not be predicted, with James Bartis, Senior Policy Researcher for RAND and author of the first volume, saying military planners were too often "afflicted with petroleum anxiety."

"They think prices are heading in only one direction: up. But history teaches us otherwise," Bartis said.

In a Testimony presented to the House Energy and Commerce Committee in Congress on Opportunities for Alternative Fuels Production in May last year, Bartis said it was "highly uncertain" whether large enough quantities of renewable oils from seeds and algae can "be affordably and cleanly produced within the United States or abroad."

He went on to state that "the problem lies in uncertainties regarding production potential and commercial viability, especially affordability and lifecycle greenhouse gas emissions."

According to Bartis, the U.S. Department of Defense is one of the world's biggest fuel consumers with a usage of about 340,000 barrels per day, or almost one-half of one percent—of global petroleum demand.

The RAND Corporation, headquartered in Santa Monica, California, U.S.A., is a nonprofit organization that says it helps improve policy and decision-making through research and analysis.