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The rollback of a $1/gallon federal tax credit on biofuels threatens to sink many small biodiesel producers across the country.  (Source: Alibaba)
Without the $1/gallon federal tax credit, the biodiesel industry no longer appears commercially viable

While most are hoping that the U.S. can transition to electric vehicles and vehicles running on sustainable biofuels, this last year has made it clear that the process will be no walk in the park.  Recent studies showed that, in their current form, hydrogen cars emit more carbon over their lifecycle than gas cars.  And early consumer electric vehicles, like the BMW Mini E, while low emissions, have suffered from a variety of temperature related woes.

Now the biofuels sector has become the latest green transportation field to suffer disappointment in 2009.  The year started off rocky with the European Union in March unveiling import-killing tariffs on biodiesel and other biofuel.  Then, as the U.S. recovered from the recession, diesel prices dropped 18 percent off their highs, making it harder to justify the high costs of biodiesel.

Now another nail has been placed in the commercial biofuel industry' coffin -- the government $1/gallon federal tax credit will expire this Friday.  And for many businesses in the industry, it may be the last; amid a frustrating market, many biodiesel makers across the U.S. say they will likely call it quits and cease production when the credit ends.

The largest biodiesel refinery, located in Houston, Tex. has already shut down.  Another large refinery, located in Hoquiam, Wash. has been shut down as well, following a December explosion. 

However, it's not just big businesses that are cutting biofuel production and jobs.  Small businesses are also suffering.  Dwight Francis of Valliant, Okla. launched a new biodiesel venture earlier this year when the local timber economy tanked.  He was producing 12,000 gallons of biodiesel fuel per week by mid-year, and his business was viable, thanks to the $1/gallon tax credit.  Now with the credit gone, he says he's shutting down the promising startup.

He bemoans, "By the time you buy the feedstock and the chemicals to produce the fuel, you have more money in it than you get for the fuel without the tax credit.  We won't be producing any without the tax credit."

Congress and the U.S. Environmental Protections Agency have set the ambitious benchmark of producing 36 billion gallons of home-grown biofuel a year by 2022, reducing dependence on volatile foreign oil.  The prospects of achieving that goal now look bleak, according to government officials.  States Robert McCormick, principal engineer at the Department of Energy's National Renewable Energy Laboratory, "You could say the entire biofuels industry has had a rough year."

Despite these setbacks both optimism and debate on biofuels remains high.  Many liken the departure from traditional gas combustion to EVs, fuel cell vehicles, and biofuel vehicles to be similar to other past modern technological breakthroughs such as the computer, internet, airplane, and railroad.  These past innovations only reached consumers thanks to massive subsidies and investment of both money and land from the U.S. federal government.  Many argue that similar investments are needed to allow the alternative energy transportation industry to reach viability.  The real question, many say, is which candidate(s) is/are best to invest in (EVs, fuel cells, and/or biofuels) and when and how much should be invested.


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RE: just goes to show
By mcnabney on 1/4/2010 12:05:01 PM , Rating: -1
I am just going to assume that you only have a fifth grade education after reading that posting. Otherwise you would know that CO2 sources that originate from atmospheric CO2 are not related to the problem. All that carbon that is in you and in your food was pulled out of the air by a plant some time in the recent past. That is called the carbon cycle and almost all life on earth depends on it. The problem is the release of sequestered carbon (in the form of fossil fuels) which tip the balance in the carbon cycle. That is why atmospheric CO2 is way up and the oceans are becoming more acidic. Whether that is a problem we should worry about is up to our elected officials.


RE: just goes to show
By corduroygt on 1/4/2010 12:10:15 PM , Rating: 4
I don't know how much education you had, but obviously you didn't study or failed the topic of sarcasm.


RE: just goes to show
By therealnickdanger on 1/4/2010 1:01:05 PM , Rating: 2
Me fail English? That's unpossible!


RE: just goes to show
By Schrag4 on 1/4/2010 2:26:15 PM , Rating: 5
quote:
All that carbon that is in you and in your food was pulled out of the air by a plant some time in the recent past. That is called the carbon cycle...


All that carbon that's released when we drive our ICE cards or burn coal to generate electricity was pulled out of the air by a plant some time in the distant past. If I'm not mistaken, carbon levels used to be many times what they are today, long before humans were ever around. We're not coming up with 'new' carbon these days...


RE: just goes to show
By Cerin218 on 1/5/2010 10:52:54 AM , Rating: 2
What?! Energy is not created or destroyed, it only changes form? Who follows that kind of thinking?


RE: just goes to show
By rcc on 1/4/2010 5:06:04 PM , Rating: 3
quote:
Whether that is a problem we should worry about is up to our elected officials.


NO!@!!!!! Absoflippin'lutely not. You people just don't get it. We worry about it and tell the GD politians what to do about it, no the other way round. This is classis sheep stuff.... lead me, guide me, tell me what color undies to wear.

Bleech.


RE: just goes to show
By rcc on 1/4/2010 5:06:57 PM , Rating: 2
no=not

sorry, I was frothing at that point.


RE: just goes to show
By rcc on 1/5/2010 3:53:15 PM , Rating: 2
eek, ok classis = classic

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