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5 Feb 18 2011 @ 10:55am by Matt Smith in Biofuels, Global Energy

Will Ferrell Is The Future!

Ok dudes, to complete a themed week, and to prove that two data points doth not a trend maketh, let’s complete the trifecta with a final post comparing commodities to ‘The Office’. So after looking at Dwight Schrute (natty), Michael Scott and David Brent (oil), let’s take a look at why….Will Ferrell is the future! (and so are renewable fuels).

Just as Will Ferrell is (potentially) set to be the future of ‘The Office’, renewable fuels are (potentially) set to be the future of Energyworld™. However, while TV shows can change their stars at the drop of a hat, there is a somewhat longer and more laborious transition for the dynamics of the energy landscape.   

As highlighted recently on the burrito, research reports from ‘big oil’ indicate the use of oil, coal, and natural gas are set to converge by 2030, each taking up approximately 26% of the world’s market share. At the same time, renewable fuels are set to grow to provide approximately 7% of the world’s energy. According to the EIA, renewable fuels in the US currently make up 1.6% of the energy used, with 13 billion gallons of ethanol produced last year.

A quick side note to let some pressure out of the tires (pun fully intended): Indycar racing has been using cars powered 100% by ethanol for the past four years. Eat your heart out, Ricky Bobby.

For better or for worse, ethanol is part of our future.  Not only has the government mandated a 36 billion gallon target by the EPA for 2022, but the EPA has recently approved the use of E-15 blended gasoline (15% ethanol) for cars that are as old as 2001 (previously they were only endorsing cars built after 2007). Essentially, the majority of cars and trucks on the road can now run on E-15. Which is better for the environment as burning ethanol produces less greenhouse gas emissions, but the downside is you need more of it, as ethanol contains less energy than gasoline (approx. 94,000 Btus versus 124, 000 Btus per gallon). And this is without even touching on the whole ‘food or fuel’ debate. Unfortunately, regardless of if you agree with ethanol use or not, it is here to stay.   

‘I drive a Dodge Stratus!’

My final point is that we must not forget that renewable fuels are still in the discovery phase; we do not know what technological advancement will lead us to over the next few decades. Despite such fuels as cellulosic ethanol and algae being unable to make any significant impact as yet, the big game changer may yet be just round the corner. And just as ‘The Office’ is set to inexplicably change due to the arrival of Mr Will Ferrell, the energy landscape is set to undergo just as big a transformation, as the world transitions – slowly but gradually – to renewable fuels.

5 Comments on this post:

  1. […] This post was mentioned on Twitter by Matt Lee, Energy Burrito. Energy Burrito said: 'The Office' Trilogy is complete out on the burrito, with 'Will Ferrell is the Future!' – […]

  2. Brzezinski says:

    thanks for the pie chart, but can’t get the pun

    plus, by gradual transformation to renewable fuels, do you predict any war?

  3. Matt Smith says:

    Hi Brzezinski – the pun was on ‘tires’ and ‘Indycar’ – not much media exposure to that in China I suspect!

    If you mean war re the Middle East – the transition to renewable fuels means less reliance on world oil – which means the impact of geo-political events will lessen the more self-sufficient we become.

    If you mean a war re ‘food vs. fuel’, I think the limited uproar despite the production of 13 billion gallons of ethanol a year in the US (= approx 40% of corn crop) highlights it has already been accepted (albeit grudgingly) somewhat.

  4. Brzezinski says:

    guess twas a good pun. still need to google indycar.

    So does gradual transition means that these days’ spike in nymex crude oil will turn out to be the last opportunity for traders to gain quickly from geo-political events?

    And by ‘the more self-sufficient we become’, who does ‘we’ stand for? I think it is no good for us chinese.

    I believe ‘food vs fuel’ war is totally accepted, as confirmed by a famous analyst in China, who magically predicted the iraq war would occur right on Mar 20, 2003 because the war would last for 15 days and there would be sandstorm on April 5. kinda beat rand corp. And a series of US Acts are aiming for this war

  5. Matt Smith says:

    Brzezinski – don’t worry about missing the puns; you rock.

    I think that NYMEX crude oil is going to have a risk premium built in for the next few weeks….especially considering there is a ‘day of rage’ for Saudi Arabia earmarked for March 11 – I don’t think anyone can rest easy until after then, especially if tensions escalate elsewhere in the Middle East. But from a fundamental perspective, NYMEX at $100 is not justified currently – harking back to the pun – it needs some air let out of its tires from there to be fairly valued. The ‘we’ stands for the US, not for China – sorry. Self-sufficiency is not an option for China – satiating your appetite for commodities is the main focus at the moment. Who is the famous analyst in China you speak of? – that’s pretty prophetic.

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