For the first time in about two years, the price of a barrel of Blent crude has risen to over $ 2 again. Since both the material and the energy use paths of biomass are influenced by the price development of the dominant raw material oil, I would like to address some of the relationships between renewable biomass and fossil oil in today's article. For example, how closely are oil prices and bioenergy prices linked?
The short-term reasons for breaking the $ 100 mark are primarily the unstable situation in Egypt, which has unsettled the markets and caused the price of crude oil to rise. But also statements from the past week about the possible Overestimation of Saudi Arabia's largest oil exporter's oil reserves (LINK) Some market participants are unsettled by up to 40% and can lead to a rise in the price of oil.
Medium-term reasons for an increase in the price of crude oil are still the increasing demand for crude oil due to the rapidly growing economies of China and India or the difficult discussions about the topic of "peak oil", i.e. when the maximum global production of crude oil will be reached global production will decrease.
Effects of the oil price on the usage paths for biomass
Petroleum has been created from biomass through geological processes. So there is at least a thematic connection between the two raw materials. Also market economy there are direct correlations, since renewable biomass is used, among other things, to replace products from finite petroleum.
Expensive oil makes alternative raw materials more competitive. This means that the high oil price is particularly beneficial for products that are intended to replace products whose manufacturing costs are significantly influenced by the oil price. In the energetic usage paths, all regenerative energies can be mentioned here. However, bioenergy benefits particularly from a high oil price, since it can be used for the production of electricity, heat and fuel and thus covers the entire range of uses of crude oil.
A high crude oil price is also conducive to the development of products from renewable raw materials for the material usage paths of biomass. All kind of Bioplastics or lubricants based on biomass can catch up with the cost advantage of their fossil counterparts more quickly due to a high crude oil price and thus achieve marketability.
Coupling the oil price and the price for bioenergy sources?
I was interested in whether there is a direct connection between fossil and renewable energy sources. I only found some information for a direct link between the market price of crude oil and the prices for bioenergy sources for the solid bioenergy sources.
So the pricing for wood chips, Wood pellets or wood briquettes depending on the crude oil price up to 20%. The following graphic by CARMEN eV is also interesting and shows the longstanding competitiveness of bioenergy sources for heat generation:
I have not found any relevant information for the liquid bioenergy sources, but I came across an interesting study. According to this study by Deutsche Bank (2005), biofuels become fully competitive from an oil price of $ 100 / barrel. This was communicated by the author of the study Josef Auer, who mainly sees the state of the art in the production of biodiesel and bioethanol as existing weak points in the industry.
The study has now been written 6 years ago and the biofuels sector has become technologically mature and more efficient. A good example is that optimized manufacturing processes of the biofuel manufacturer Verbio AG, which combines bioethanol and biogas production. The average oil price at the time of the study was just under $ 60.
How much biomass is needed to produce the amount of energy one liter of crude oil?
I found this question interesting because it enables statements to be made about how ecologically a kilowatt hour of the relevant energy source can be transported over longer distances or how much storage space is required for its storage. For planning a boiler or CHP plant these factors are often just as important as the market price and the security of supply of the energy source.
Comparing the energy densities of petroleum and biomass is also exciting because the comparison shows how much the energy content actually increases during the millions of years of petroleum production. Here is a graph comparing fossil fuels and some regenerative bioenergy carriers:
The increase in energy density between fresh wood and petroleum that is millions of years old is therefore not much more than a factor of 2-3. Since bioenergy should primarily be used as a decentralized energy source near the growth location and does not have to be transported intercontinental, there are all considerations regarding the need for storage space when planning your own system are important.