Politics of Alternative fuels

Vinod Khosla (a well known invester in IT firms and alternative energy) argues[19] that the political interests of environmental advocates, agricultural businesses, energy security advocates (such as ex-CIA director James Woolsey) and automakers, are all aligned for the increased production of ethanol. He pointed out that from 2003 to 2006, ethanol fuel in Brazil has replaced 40% of its gasoline consumption while flex fuel vehicles went from 3% of car sales to 70%. Brazilian ethanol, which is produced using sugarcane, reduces green house gases by 60-80% (20% for corn produced ethanol). Khosla also says that ethanol is about 10% cheaper per given distance. There are currently ethanol subsidies in the United States but they are all blender’s credits, meaning the oil refineries receive the subsidies rather than the farmers. There are indirect subsidies due to subsidising farmers to produce corn. Vinod says after one of his presentations in Davos, a Senior Saudi oil official came up to him and threatened: “If biofuels start to take off we will drop the price of oil.”[20] Since then, Vinod has come up with a new recommendation that oil should be taxed if it drops below $40.00/barrel in order to counter price manipulation.

Ex-CIA director James Woolsey and U.S. Senator Richard Lugar are also vocal proponents of ethanol.[21]

In 2005, Sweden announced plans to end its dependence on fossil fuels by the year 2020.[22]