World crude prices are threatening the global economy is the call from the International Energy Agency’s Chief Economist, Fatih Birol. In response, the Global Renewable Fuels Alliance (GRFA) is calling for the G20 to enact agressive biofuels policies that will reduce reliance on crude oil. Those hit hardest, says GRFA, are underdeveloped countries because at the slightest rise in oil prices, the impact on the balance of trade is devastating.
This past week, Birol warned that the global economy could be hit with another recession triggered by rising crude oil prices. Historically, high oil prices have preceded every global recession since the early 70’s. And dare we forget 2008 when the U.S. economy collapsed and many consumers have yet to feel relief from the recession.
GRFA says that world biofuels production is contributing over one million barrels of oil equivalent to global energy supplies and expects this to increase 3 percent this year without any major policy changes.
“We must do more to encourage the development of alternatives to crude oil such as ethanol and biodiesel,” said Bliss Baker, GRFA spokesperson. “The IEA has stated that by 2050, biofuels could produce 27% of the world’s transport fuels.”
The question people should be asking is will an increase in biofuels help to reduce oil prices? OPEC has publicly stated that “energy efficiency policies along with the use of biofuel will put more downward pressure on oil consumption worldwide.”
The only way to know for sure? Produce more biofuels.