A Call to Action in Renewable Energy

July 27, 2010 - PRLog -- Most of us that have been in biodiesel, or renewable energy of any kind, remember the “times of plenty” that existed just a few years ago as our industry first emerged publically. Financing for projects was readily available, oil had reached historic highs, feedstocks were cost competitive, and all the politicians were espousing their support for this new industry.  Life was good.  Now we are in a turbulent industry, however, trying to navigate through a difficult recession - with two political parties that are openly hostile to each other.   Just when we need them the most, our Congress is gridlocked.  As an industry, how do we make this renewable energy model work in this market?

The answer really is not difficult.  First, we define the industry.  Ethanol, biodiesel, wind, solar – all of us are in this together.  While none of us individually are the complete solution, all of us together are the answer.  We are not mutually exclusive.  We are friends and we should navigate together.  Second, although it is very likely to occur, we must not rely on high oil prices for our success.   The majority of the world’s oil is governed by countries whose wealth is totally reliant on oil.  They have the ability to manipulate prices. OPEC is not the friend of alternative fuels.  Our death is their gain.   Third, we recognize that politicians most often do what is expedient or responsive to special interest.  . As we do our part at the polls to change the status quo, we must live in this real world of policy uncertainty.  

Finally, we have to understand that in order for alternative fuels to be a successful mainstream industry, our products must be ones that people want.  Our products are good solutions to the problems.  It is our duty to ensure that everyone understands our products and why they are good.   We must also ensure that people see the control currently exerted by “big oil” in this country.  “Oil” did not get to be “big oil” overnight.  They have had subsidies and tax breaks for years.   Those subsidies started when their industry was young, and that are still here when their industry is the mammoth we see today.  

In the short term, our alternative fuels industries unequivocally need subsidies and support.  But, as we make those arguments to our elected officials, let us never forget that the tax credits and subsidies we seek are mere “scraps on the table.”  For decades, the vast majority of these subsidies have gone to the oil and gas industry.   As the very large campaign contributors, these incumbent industries are likely to continue to get the lion’s share of these subsidies- until the voters simply demand differently. Finally, as we talk about how to pay for alternative energy subsidies, let’s never forget how much money would be unleashed if just one or two of the oil and gas subsidies were eliminated.  

As an industry, we must understand that in the long term, it is in our best interest to wean ourselves off of any reliance on subsidies, tax credits, and the political uncertainty associated with them.  In the short term, while we are in this new growth phase, it is a time to focus on cost reductions and cost competitive technologies. We need to think in the long term rather than simply reacting to every crisis.   Those that enter our industry must wholehearted believe that alternative fuels are the right answer to energy problems.  

We must all realize that when we pull up to the gas pump, the price we pay for gas or diesel fuel does not even begin to reflect the true costs of those fuels.  A 2007 estimate put the true costs at about $480 per barrel, or about $10.50 per gallon.  It is more likely about $25 per gallon today.  And, that does not factor in the lives that are lost trying to secure this commodity.  All of us must fully understand the national security issue, the economic issue, the environmental issue – and we must continue to spread the message.    Finally, we all must write, call and continue to demand action from our elected officials and we must hold them accountable.  As an industry, when we fail to do these things, we have nobody but ourselves to blame.

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About Lee Enterprises: Lee Enterprises (www.lee-enterprises.com) is a biodiesel consulting firm specializing in project management, feasibility studies, business plans, and assistance with planning, market analysis, site evaluation, feedstock selection and procurement, process technology, evaluation, offtake distribution, financing, capital budgeting, and contract negotiations (for feedstock, off-take, transportation, construction, site purchase/lease, and plant management). They also own National Business Brokerage, Inc., (www.natbusbro.com) a full service business brokerage firm specializing in the buying and selling of biodiesel plants. Lee Enterprises, 1503 East Kiehl Ave., Sherwood, AR 72120. (501) 833-8511. www.lee-enterprises.com