Biofuels cure to rising oil prices

“The gradual move away from oil has begun. Over the next 15 to 20 years, we may see biofuels providing a full 25 percent of the world’s energy needs,” says Alexander Muller, assistant director-general of FAO’s sustainable development department. “Ministries of energy and agriculture must quickly find new ways of collaborating to exploit the potential presented by biofuels and biodiesel,” says Peter Kegode, a sugar industry and ethanol specialist in Kenya. This, he adds, is an opportunity to address the poverty experienced by maize and sugar producers in the country. The surge in price of crude oil beyond US$70 per barrel is responsible for renewed global interest in alternative energy sources. “The disruption of the Nigerian crude oil supplies, the nuclear standoff between Iran and the US and the high demand for energy to support China’s industrial growth have exacerbated the crisis,” said Kegode. This is a clear indication that the renewable energy options for biofuels and biodiesel will be driven by agribusiness and increased production of agricultural raw materials to support the increasing global energy demand. “Locally, we have seen venture capital investment companies, including Actis positioning themselves to tap into the biofuel supply chain,” said Kegode. Kenya is poised to tap into the biofuel supply chain using commodities such as sugarcane, maize and sorghum. It is important, says Kegode, that producers position themselves by forming energy companies that can negotiate better prices and enhanced compensation from their investments. Factors pushing for such a momentous change in the world energy market include environmental constraints such as increased global warming and the Kyoto Protocol’s curbs on emissions of carbon dioxide and other greenhouse gases as well as a growing perception by governments of the risks of dependence on oil. The Kyoto Protocol, which is mainly responsible for addressing reduction of carbon emissions and preservation of the environmental balance, will determine alternative energy options that are friendly to the environment and can be sustainably harnessed. “Oil costing more than US$70 a barrel makes bio-energy potentially more competitive,” Muller said. ‘ The East African.

May 2006
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