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Energy sources other than petroleum and natural gas have lost the pizzazz they enjoyed a few years ago, mainly because domestic production of fossil fuels is sharply increasing. But the development of “alternative” or “renewable” fuels should not be summarily discouraged. If we’re to accelerate U.S. economic growth to 4% annually, we not only need all the energy we can produce but also we need time to get alternative-fuel technology up to snuff. These thoughts came to mind as I read an interesting piece in The Wall Street Journal headlined “Throw a Log on the Refinery.” It seems that a company named KiOR Inc. is opening a plant in Mississippi to make gasoline from wood chips. This plant, the article says, is the first in the United States “to make large quantities of renewable fuel from a source that isn’t food” — meaning corn, now used to make ethanol. The article says another company is building a refinery in Iowa that will use the inedible parts of corn plants to make ethanol. But the American Petroleum Institute is pursuing legal action that, if it wins, could radically modify the effect of the 2007 law that mandates rising amounts of renewable fuels to be blended into gasoline sold to U.S. consumers. The problem, from the petroleum industry’s viewpoint, is that there isn’t enough ethanol being produced, so refiners are paying fines for not buying renewable fuel that doesn’t exist. This regulatory snafu ought to be fixed, though not by eliminating the renewable-fuel requirement. While experts now forecast the United States will become the world’s largest oil producer by 2020, the mandate bolsters efforts such as KiOR’s to develop and perfect alternative energy sources — and it prolongs the time we can benefit from increased domestic fossil-fuel production. One of the things I’m grateful for this Thanksgiving is America’s can-do spirit. Though it is frequently frustrated in Washington, D.C., it thrives in the private sector. KiOR is a good example of it, and its story on its corporate Web page is worth reading. Thank you, visionaries and entrepreneurs, for all that you’ve done, are doing and will do!
2012 Economic Growth Fellow
John Prestbo is retired as editor and executive director of Dow Jones Indexes. Previously he was markets editor at The Wall Street Journal. He has co-authored or edited several books over the past 30 years. The most recent is “The Market’s Measure: An Illustrated History of America Told Through the Dow Jones Industrial Average,” published in 1999 by Dow Jones Indexes. His column, Indexed Investor, appears on the highly regarded “MarketWatch” business and finance website. He received his bachelor's and master's degrees from Northwestern University.Full Bio
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