High Crude Oil Prices Boost Alternative Fuels’ Price Competitiveness

John Davis

The Energy Management Institute has released a report that shows alternative fuels are much more cost effective… by nearly 30 percent… than they were just three years ago. The New York-based institute touts itself as higher learning for energy professionals such as oil companies, utilities, and transportation fleets. It found that biodiesel was 29.2% more cost effective than a few years ago while ethanol was 17.4 %. Natural gas (41.4%), electricity (36%), and propane (21.3%) helped alternatives to oil average a 29% cost effectiveness increase.


“We crunched a lot of data for this one,” said J. Scott Susich, Editor of EMI’s Alternative Fuels Index publication. “It’s not enough to look at prices from three years ago and compare them to recent values. We looked at the relationship between the cost of each fuel and the amount of energy one could buy on a BTU equivalent basis, and compared those values to their gasoline and diesel counterparts in each market. Next we had to look at the trends of those relationships to determine whether the results were atypical or part of a sustained pattern. In each case the data showed a continuing trend toward competitiveness,” Susich continued.

Now, whether alternative fuels can continue their cost-competitive march remains to be seen. EMI’s numbers are based on crude oil prices more than doubling during the time period studied to hit nearly $75 a barrel. Today’s oil prices are seen closer to $53 a barrel.

Biodiesel, Ethanol, News, Price, Propane