Recent estimates indicate that there are roughly 300 billion barrels of known petroleum reserves. Given worldwide consumption of just under 6 billion barrels annually, this equals roughly 50 years worth of petroleum.

Of course, we won't run out of petroleum that soon because as availability drops, the price will increase and demand will decrease.

But cutting back on petroleum consumption won't be easy. Where will the energy come from to make electricity, fuel for cars and planes, to make plastics, polymers, inks, detergents, paints, and a whole host of other materials that are currently derived from petroleum? Are we as a society willing to do without many of these amenities?

I suspect not. We will want alternatives.

Actually, we already know several possible fuel alternatives, but each one has its limitations, particularly for mobile transportation, such as planes or cars. Electric cars lack power and can't travel far. Natural gas does not possess the energy density of liquid fuels without hazardous high pressure tanks. Solar and fuel cells may be great for stationary power systems, but not for an airplane flying across the ocean at night!

On the other hand, biofuels, derived from renewable plant resources, are an excellent alternative of raw materials to replace petroleum.

Although ethanol is the best-known biofuel, the prime candidates are plant oils and fats because they have the same base chemical structure as petroleum. An obvious source of these oils and fats are common field crops such as corn and soybeans.

The upward blip in gas prices in the last few months has re-ignited talk about biofuels. In the years to come, farmers will hear a lot more talk about biofuels and how they could send crop prices skyrocketing.

For example, even if we used all the vegetable oils and plant oils that are now being produced to make fuels, we couldn't even satisfy 10 per cent of the current gasoline and diesel consumption.

But be warned. This is not the time to go out and increase your corn, soybean or oilseed acreage.

This type of massive technological shift will take several decades to accomplish, even if we launched a concentrated push to develop the technology and infrastructure today. Recognize it took almost half a century to develop the current petroleum economy. Shifting from an economy based on black gold to one that runs on green gold will be no less demanding, in a technological sense, than the space race. But the alternative is not very appealing, either!

Before we can develop an infrastructure that will see biofuels available at the local gas station, we will have to develop a whole new set of technologies. To do that, we will have to train large numbers of engineers and scientists and give them the time and funding to overcome all the technical difficulties that currently stand in the way.

Farmers should be in the forefront of those asking government to get on with this huge task immediately, because they have the most to gain and the most to lose.

Farmers will greatly profit if they can become owners of the technology created to develop biofuels. But if all they do is supply the raw material - the soybeans, canola or sunflower seeds - then they will remain stuck in the high-volume, low-margin raw materials commodity game.

But in developing biofuels, it may be possible to move the production and processing capability much closer to the farm.

If that happens, farm profits will go up. But if farmers don't capture the opportunity and instead allow the third or fourth producer down the line to do all the work, then that is the group that will profit in the new green gold economy.


Source:
Canadian Farm Manager newsletter, November 2000 p. 3, Canadian Farm Business Management Council