The Energy Report

Renewable energy sources are gaining ground in the energy sector, but perhaps one of the greatest hopes—especially in the transportation and diesel machinery industries—is biofuels. The ability to store a liquid as a combustible energy source is an often-overlooked advantage that biofuels have over electrical storage systems like lithium batteries. The commercial airline sector is certainly investing in a biofuels future, and mining companies are beginning to take advantage of biodiesel to power their gargantuan machinery.

However, EPA's first draft of its report, Biofuels and the Environment: The First Triennial Report to Congress,, which resulted from the 2007 governmental mandate to increase U.S. biofuel production to 36 billion gallons per year by 2022, finds biofuel production hasn't proven environmentally sound, particularly corn ethanol production. Water contamination through chemical runoff, natural habitat destruction and invasive species concerns are just a few of the major concerns put forth.

The Renewable Fuels Association responded, the "EPA's failure to provide this report in any context with the environmental degradation done by fossil fuel exploitation and use is irresponsibly misleading. Energy and environmental decisions do not exist in a vacuum."

Biofuels have been touted as one of the best alternatives to fossil fuels due to their similar combustible nature and compatibility with already existing combustion engines. The U.S. government even increased the standard ethanol levels in gasoline mixtures from 10%–15% for certain vehicles to reduce fossil fuel consumption. Will this new report make the government think twice about this decision? How will this affect biofuels investment? The EPA says this report is still in draft form and shouldn't be used for official analysis just yet, but its findings should show investors and policymakers what may be on the horizon for the U.S. biofuels market. Read the full report here.

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