Monday, April 20, 2009

Biofuels - Did the Consumer Know or Ask?

One of marketing's various roles is to enable the target consumer to be educated about what the product or service provides and why it will help alleviate their pain. Similarly, marketing is a tool to create perceptions that at times are contentious. Biofuels is an interesting sector where new data and numbers will require either consumer education or perception building on the part of manufacturers and retailers to clarify information that is "contentious". This is going to be an interesting sector to watch that has delivered consumer innovation to alleviate the pain, or has it? You be the judge.

"[International Council for Science] ... supports some controversial findings published in 2007 by Paul Crutzen of the Max Planck Institute for Chemistry in Mainz, Germany. Dr Crutzen concluded that most analyses had underestimated the importance to global warming of a gas called nitrous oxide (N2O) by a factor of between three and five. The amount of this gas released by farming biofuel crops such as maize and rape probably negates by itself any advantage offered by reduced emissions of CO2."

States the article in the Economist article "Biofools" here. Currently, on average up to 10% Ethanol produced from corn is included in petrol sold in the USA. A few statistics on Ethanol that are helpful in alleviating misconceptions in an article at the CATO Institute "Ethanol Makes Gasoline, Costlier, Dirtier" here.

Yet, as published on the Wall Street Journal Blogs "E-corn-omics: Ethanol vs. Gasoline vs. Food" here:

"... for now the CBO (Congressional Budget Office) is leaning toward ethanol’s corner. Based on research from the Argonne National Laboratory, the CBO says U.S. corn ethanol, as currently produced, amounts to a 20% reduction in lifecycle greenhouse-gas emissions compared with gasoline."

The above data and political decisions may be in contention but the true impact of producing biofuels brings the issue closer to home when one considers its water consumption, see an excellent article in the Economist "Sin Aqua Non" here. It states:

"... climate change has persuaded western governments to subsidise biofuels, which could prove as big a disaster for water as they already have been for food. At the moment, about 2% of irrigated water is used to grow crops for energy, or 44km3. But if all the national plans and policies to increase biofuels were to be implemented, reckons the UN, they would require an extra 180km3 of water."

Does the intelligent "community" of consumers of energy know the depth of impact caused by biofuels? Or do the "crowds" of consumers hurl and herd themselves at what some said should be done? See my discussions on debunking the myth of wisdom of the crowds among these blogs.

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