Crude oil, biofuels to become more integrated

07 May 2008 20:24  [Source: ICIS news]

NEW YORK (ICIS news)--Crude oil and biofuels will grow more integrated in the future due to continued demand for ethanol as an octane booster in gasoline, a consultant said on Wednesday.

Ethanol can be used as a stand-alone fuel, but it can play an even larger role in the motor fuel market if it is blended in gasoline, said Frederick Potter, vice-president of Hart Energy Consulting.

In 2007, the US blended ethanol in 47% of its gasoline, and that figure will jump to as much as 70% in 2008, the consultant said during a biofuels event in New York.

Biofuels will meet a large share of global motor fuel demand in the next decade, and Brazil will find itself in a privileged position in that market, he said.

“Brazil could possibly reduce the amount of ethanol it uses as a stand-alone fuel and export that material to countries using the biofuel as an octane booster,” he said.

Brazil blends ethanol in gasoline at 25%, but it also uses the biofuel as a stand-alone fuel in its booming flexible-fuel vehicle (FFV) fleet.

Potter dismissed the notion that increased biofuels consumption will minimise the role of crude oil in the motor fuel market.

Despite its aggressive biofuels programme, US demand for imported crude oil will continue to rise in the coming years, he said.

“US dependence on imported oil will grow to 70% by 2015-2020,” he said.

Potter expects Brazil and the US to develop close energy ties in the future.

Brazil could even become a major supplier of crude oil to the US with the recent oil discoveries made in the country, he said.

However, the consultant said it is unlikely that the US will eliminate its import tariff on Brazilian ethanol any time soon.

For more on ethanol visit ICIS chemical intelligence

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By: William Lemos
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