Energy Power Alternatives
The Downside of Biodiesel
The green movement is developing renewable sources of energy that are creating new markets. One of them is biodiesel. Industries will soon be affected positively or negatively by this emerging energy source depending on where they fall in the supply chain. The author warns: Business must fend for itself and prepare for the changing business environment that will produce winners and losers. Do you want to be a winner?
Opponents point out that biodiesel can act as a solvent that can loosen up deposits and clog up gas station fuel filters. In addition they argue that biodiesel can break down rubber components.
Since most fuel pumps, fuel lines and pump seals are made of rubber, opponents warn gas stations that are considering biodiesel as an alternative offering to petroleum-based that they will need to first replace their rubber components with a synthetic rubber. Not only do gas station owners incur additional costs to convert to biodiesel, but consumers can be penalized. Car warranties for petroleum-based usage may be nullified if consumers convert to biodiesel fuel.
On one hand, the United States government provides incentives and tax credits for producers and users of renewable and alternative fuel. Thus, producers, suppliers, and retailers of biodiesel can benefit handsomely. On the other hand, the U.S. Department of Energy (DOE) is drafting policies that will mandate private fleets and government vehicles replace their petroleum fuel-based vehicles with biodiesel-ready vehicles. Furthermore, although there are good number of biodiesel producers in some states (e.g., northern central states), other states do not have enough supply to benefit from government incentives.
This implies that the mandate is unfair and does not realistically consider the impact it will have on states that are not in a position to compete and convert to biodiesel. With congressional leadership favoring the acceleration of greener energy in a way that clearly benefits their constituents and lobbyists, undoubtedly there will be winners and losers.
What the biofuel discussion points to is the urgency for businesses to begin planning NOW for the inevitability of a green energy world in order to protect themselves from rising energy costs and clean-energy regulations, policies, and taxes. Will your business be prepared to compete in a changing, greener business environment?
Bottom line? - Stop Profit Leaks. Apply this information to improve your profitability, reengineer business models, and strengthen or gain competitive advantage in the marketplace. And apply the free Fiscal Test at http://fiscaldoctor.com/fiscaltest.html
From Gary W Patterson, http://www.FiscalDoctor.com Copyright 2008
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I never thought about those issues with biodiesel before. I thought the only setback would be less food because food growers would be producing crops for gas guzzling vehicles.
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I never thought about those issues with biodiesel before. I thought the only setback would be less food because food growers would be producing crops for gas guzzling vehicles.
