Declining economy hits renewable fuels

Hit by the double whammy of declining energy prices and frozen credit markets, renewable fuel businesses are struggling to survive, industry experts told the U.S. House of Representatives Small Business Committee March 4.

“Until recently the biofuel industry had been a small business success story, revitalizing rural economies while reducing our dependence on foreign sources of oil,” said committee chair Rep. Nydia Velázquez, D-N.Y. “Now, these enterprises are struggling to stay afloat, finding themselves locked out of the capital they need, while demand for their product dwindles.”

Entrepreneurs in fuels such as ethanol and biodiesel told the committee that, with a shortage of venture capital and banks unwilling to issue loans, the development of a new generation of biofuels is at risk. Potential new fuels include cellulosic ethanol, generated from materials such as recycled waste paper, rice hulls and switch grasses. Energy experts say that these fuels could compete with imported oil while also reducing the environmental impacts of current biofuels, according to a House of Representatives press release.

“A fully developed renewable fuels industry offers the potential to grow our energy sources here at home,” Velázquez said. “However, the current economic conditions are blocking the kind of investments we need to produce the fuels of the future.”

—Alan Bailey