2006 Miami Conference

Reports

REGIONAL ENERGY SECURITY: THE POTENTIAL OF BIOFUELS
WEDNESDAY, DECEMBER 6, 2006
10:00-12:30 PM

See the Potential of Biofuels Proceedings from the Regional Energy Security Panel at 2006 Miami Conference Report by Florida International University Here.

Moderators: George Philippidis, Applied Research Center, FIU and Edward Glab, Florida International University

Discussants: Julio Arroyo, Asociacion Azucarera de El Salvador; Jorge Arrizurieta, Akerman Senterfitt; Paul Dickerson, US Department of Energy; Matt McManus, U.S. Department of State; Johanna Mendelson-Forman, CSIS; Patrick Patel, Angostura; Moises Starkman, Government of Honduras; David Stewart, Citrus Energy LLC; Raphael Jaen Williamson, Chevron; Mark Yancey, BBI International

The Context:
Most Caribbean Basin countries are heavily dependent on imported gasoline and diesel for fuel. As oil prices escalate and fuel availability diminishes, local economies are hit hard. Ethanol and bio-diesel from home-grown crops represent sustainable fuel alternatives that can provide energy and economic security through diversification, domestically-controlled production, job creation in agriculture, and regional trade. There are reservations regarding if government subsidies will be required to develop the industry and if countries have the production capacity to achieve economies of scale.

The Challenges:

Is the region willing and able to embrace applicable fuel technologies and attract financing and private investment to develop competitive bio-fuel markets in the region?
What are the policy and regulatory barriers that need to be overcome?
How can bio-fuel trade be facilitated given gasoline versus ethanol prices?
How easily can biofuels be integrated into the current energy infrastructure?

Points and comments brought up in the session:

Regulatory reform to harmonize tariffs and technical standards
- Transparency
- Stability of contracts
- Intellectual property protection for technology transfer
- Attract foreign investment
US Government fully supports development and encourages regional ethanol market
Job creation is a driver for governments to encourage development of ethanol markets
- Help to address immigration pressures
There is no single solution or technology, must be adapted to local infrastructure and needs
- True of ethanol and biodiesel
Technology and capital are available; decisions will be made and should be based on economics
Private sector already taking lead in development of ethanol and biodiesel and this should be encouraged (Brazil, US, El Salvador, Honduras)
Urgent need for energy conservation measures across the region; will stretch supplies of all fuel
Investment decisions must be made on a careful project-by-project basis, but this would be made easier by the development of a single regional market.
Must focus on HOW we can most efficiently, economically, and in environmentally friendly ways develop alternative fuels market, not WHETHER we should do it.
Create a new market by expanding the portfolio of transportation fuels.
It is clear that region is embracing and encouraging development of alternative fuels market
Focus on disadvantaged raw materials to remove upward pressure on edible crop prices and manage water resources.

Questions and Answers:

In the cases of sugar cane for ethanol and palm oil for biodiesel, the region can further enhance opportunities by seeking ton obtain carbon credits for their plantations of these crops. Whether cultivated lands such as these are eligible for carbon credits is still being negotiated. Honduras has been looking into such possibilities and it may be useful for other countries in the region to
also investigate.
There are concerns that the expanding biofuels market will drive the prices of corn, sugar cane and other raw materials up. This can affect other sectors such as agriculture and livestock production. These consequences need to be considered since food prices can increase as a result.

Recommendations made:

While the regional emphasis has been on ethanol from sugar cane, palm oil biodiesel production also hold much potential especially in terms of moving towards energy self sufficiency. More discussion and research is required to determine if this can be an opportunity.
Regional governments must commit to biofuels development projects and increase the incentives to investors to get into the sector. CCAA can play a pivotal role in partnering regional biofuels interests with US investors and technology providers.