By Roger Jeal
Biofuels made from crops and other organic material are in the news and not all the publicity is favourable.
They form part of the armoury of alternative, renewable fuels to help fight climate change, energy shortages and rising fuel prices. However, they are often now said to be less ‘green’ than was thought and their production can contribute to food shortages and rising food prices.
It’s a business news story with so many angles for so many readers/viewers/ listeners and is likely to keep many of you busy for many years. It reminds us that so many developments involve unexpected side-effects, surprise spin-offs, difficult trade-offs, broader impacts and unintended consequences, especially for particular groups of people, industries, regions or countries. They can cause fierce competition, new problems, painful shortages and tough challenges.
Few developments are 100% good or 100% bad for everyone. It depends! There is a cost to everything, even something that generally seems like a good idea. There are usually winners and losers from any particular news and a big part of our job is to investigate this.
When you are looking for a story to write with a different angle on some news development, just think broadly about who and what might be affected, both directly and indirectly, and ‘follow your nose’.
To help you explain properly in your stories, here is a really good question and answer session on biofuels from the website of the British Guardian newspaper.
Reuters has just held one of its periodic summits with top business leaders, investors and regulators and this time it was largely about biofuels. Here below is a Reuters story about this which surveys the current situation and was published on Monday, January 28, 2008.
Bloom comes off biofuels
By Alden Bentley, Commodities Editor, Reuters America
John Rice, head of ethanol production at Archer Daniels Midland predicted a gloomy outlook for the industry, saying that ethanol companies were growing cautious and construction of new plants would slow.
At the same time, the head of the German renewable fuels association declared Germany's biodiesel industry in a 'state of collapse'.
Stories highlighting the hurdles facing ethanol and biodiesel became a theme at the Reuters Global Agriculture and Biofuel Summit and it seems the bloom is coming off the biofuels rose.
After two years of dramatic growth, the challenges are building. Consumers are worried about environmental impact, profit outlook is tough, and there is scepticism about whether cellulosic technology (to make ethanol from switch grass and wood pulp) will be ready to supplant corn as the main ethanol feedstock in the US.
Jeff Broin, the chief executive of the top U.S. ethanol company POET, told Reuters that POET plans to increase production by at least 25 percent by the end of the year. And an executive at Marathon Oil said that the explosive growth in capacity should curtail profit margins for distilling ethanol through 2010.
Informa Economics summed it up for readers, revealing that the U.S. corn-based ethanol expansion is headed for a cooling off period over the next 18 months until demand catches up with supply.
The 44 spot stories, analyses and factboxes from the two-day Summit got wide play in newspapers, on the web and in analyst notes and a story on next generation biofuels was used by the Guardian and on the University of Illinois website.
Several websites carried an interview with the chairman of the Malaysia Palm Oil Board, Sabri Ahmad, who said that Malaysia would likely introduce palm oil-blended diesel in the local market this year to save the domestic biofuel industry, which has been hit by soaring feedstock prices.
A columnist at Folha de S. Paulo, Brazil's largest newspaper, highlighted comments by the chairman of the U.S. House Agriculture Committee, Collin Peterson that tax credits and tariffs on ethanol would have to be maintained.
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You can find details of these Reuters summits here and stories from a number of past summits here.
An Islamic Banking and Finance Summit begins on February 4 and a Regulation Summit on February 5.
Here are some other Reuters stories on aspects of the biofuels story. The first is about biofuel protectionism. The next is about France reviewing biofuel use due to environmental worries and the final one about biofuel investments being seen as a good bet given the high price of crude oil.
If they are a good bet, that could be good news for the companies taking on the risk of such investments and for their share prices. But will the credit crunch make it harder to find the money to invest? One business story is connected to another, giving you plenty of ideas and angles for new stories! Think of the potential consequences and “What might happen next?” Get ahead of the story everyone else is writing.
Our Standards: The Thomson Reuters Trust Principles.
