Biodiesel and Ethanol Investing

Forbes reports that the Energy Information Administration (EIA) forecasts in its annual report that U.S. oil demand should grow only 1 million barrels per day, or 0.2 percent, over the next two decades. This comes as higher vehicle fuel standards and increased use of renewable fuels stifle petroleum consumption. EIA said this is the first time in more than 20 years the agency has projected virtually no growth in U.S. oil consumption, with the modest growth in demand for liquid fuels being met by biofuels instead. Total demand for marketed renewable fuels, including ethanol and biodiesel, is forecast to grow by 3.3 percent per year until 2030 due to the federal renewable fuel standard and state requirements for utilities to generate more of their electricity from renewable sources. Additionally, hybrid vehicle sales are expected to rise to 38 percent of new light duty vehicle sales in 2030 from 2 percent in 2007. Although falling crude prices may be tempting for consumer use, coal, oil, and natural gas will still meet 79 percent of total U.S. primary energy supply requirements in 2030, which is down from 85 percent in 2007. This forecast is good news for the biofuels industry and environmental conditions, demonstrating increasing awareness of the alternative energies available.