Biofuel has been around a long time. Cavemen burned logs in open fires, a prehistoric version of biomass.
Peat -- a naturally occurring substance from bogs -- has long been used to heat homes and produce electricity.
Then there's ethanol. It dates back to the 15th century, when the Scots began distilling it for human consumption.
In addition to fueling many a lively conversation at the local tavern, ethanol has also been used as a motor fuel. In 1826 Samuel Morey invented an engine that ran on ethanol and turpentine. In 1896 Henry Ford's first car ran on ethanol. His Model T ran on both ethanol and gasoline.
With such a long history, one wonders why ethanol has yet to gain full acceptance as a motor fuel.
Blame it on the marketplace -- which is both fickle and ruthless. Petroleum, coal and natural gas all exist in massive amounts and at relatively low prices.
The U.S. Energy Information Administration estimates the nation has about 2,543 trillion cubic feet of potential natural gas reserves. That is enough to meet the nation's natural gas needs for 100 years, according to the agency's Annual Energy Outlook 2011.
The same report estimates that recoverable U.S. coal reserves would meet the nation's needs for 119 years if no new reserves were found.
New technology -- and higher prices -- are also opening the door to developing previously discovered U.S. oil fields that had been uneconomic to put into production. The 200,000-square-mile Bakken oil field in North Dakota and Montana promises to boost U.S. oil reserves, reducing dependence on foreign oil.
About 49 percent of the oil the U.S. uses now comes from abroad. Half of that is from Canada, and the remainder is from Saudi Arabia, Nigeria and Venezuela, according to the EIA. If new offshore oil and Alaska reserves are allowed to come on line in addition to deposits such as the Bakken formation, the U.S. energy picture could shift significantly, proponents say.
Biofuels are promoted as an alternative to fossil fuels and a means of weaning the nation off foreign oil. In addition to ethanol, plants and organic materials are converted into biodiesel and biomass.
The problem is price. Rising oil prices make biofuels economically more feasible, but they also make development of new oil reserves more feasible. That means massive subsidies are needed for ethanol to be a part of the mix. A recent Oregon State University study estimated that on top of the $0.45 a gallon federal ethanol subsidy, state programs, subsidies and investments, total $1.05 to $1.38 per gallon.
The use of corn to make ethanol also drives up its price, putting pressure on other users such as cattle and poultry producers.
Cellulosic ethanol, made from grasses and wood, is promoted as the next big thing in biofuel. Although it shows promise, it is still not commercially feasible.
Other technologies are also in the works. Some could overtake ethanol and other biofuels as replacements for petroleum.
But the marketplace will remain the determining factor. Supply, demand, cost of extraction, technology, political uncertainty, currency fluctuations -- they create a matrix that is difficult for even the most sophisticated petroleum analysts to decipher. How many times have you heard dire predictions that $4 a gallon gasoline was here to stay, just as prices drop?
Against this backdrop, state and federal policy makers have tried to create a toehold for biofuels. They've used mandates, targets and subsidies, yet scientists still cannot produce fuels from organic matter at a price that can compete with fossil fuels. The U.S. military and airlines have gotten into the act, promoting and using biofuels in an effort to create demand.
Today's farmers navigate a dizzying array of options for crops and rotations, including many that are already profitable. With wheat near $6 a bushel, why would a farmer switch to biofuel crops?
It makes sense to grow them as rotation crops or to diversify a production portfolio, but most farmers would want to put a sharp pencil to any new opportunities before committing to growing biofuel crops.
That is the prudent thing.