Biofuels: Is it a bubble?

Filed under Green Energy, by Stephen Baker on April 20

I guess I shouldn’t be too surprised. If you look at the promise of biofuels, it seems too good to be true, at least in the short term. The idea is to turn plants like sawgrass into fuel, which would consume carbon dioxide and replace oil in the economy. What’s not to like?

And now, John Carey reports in BW that biofuels are likely to come on more slowly and at greater cost than projected. And the winners in the industry are much more likely to be the deep-pocketed giants like Archers Daniel Midland and Royal Dutch Shell than the constellation of venture-backed start-ups that has sprung up. (Here’s the rundown on the various biofuels.)

In technology, the mantra is that things take longer than predicted to gestate—but can create bigger impact than predicted when they finally grow up. I think this is the case in mobile telephony (a technology I had a role in hyping a decade ago). Could that be the case with biofuels?