There are some bent upon underlining that “The Day” is almost around the corner. And this is an old, rather well known position. Many a times in history we have been told it had almost arrived, and yet such is human ingenuity that at every possible juncture this eventuality gets deferred on one pretext or the other.

And then there are others, too passionately believing the world still have enough resources. Issues are on ground — not beneath — they continue to argue. And this scribe remains an ardent believer of this theory.

And then the grand, old man of the energy world, Ahmed Zaki Yamani, has another interesting theory to put forward. He has been subtly reminding the world that coal did not end; the coal era came to an end, leading apparently to the deduction that oil will not end; the oil era will come to an end.

And indeed there are reasons for this theory too. Besides geology, geo-politics, the global realpolitik is bound to play a significantly important role in bringing the oil era to an earlier demise, if at all possible. After all, not every one seems happy with the fact that most of the available resources are located in a region that is at best unstable, if not hostile, to the major consuming centers of the world. It was perhaps in this context that good, old, Dick Cheney once lamented: “The problem is that the Good Lord didn’t see fit to put oil and gas reserves in places where there are more democratic governments.”

Indeed, no matter how one looks at the entire debate, the very issue of world running out of fossil fuel is not an issue of “if” but “when” — one has to concede. Alternatives are the need of the hour — every one concedes. And this is rather imperative for the very survival of this crude-driven civilization of ours.

The world needs alternatives. If this is not achieved, it will prove to be catastrophic, one can’t deny. The IEA has been saying for sometime now that in order to meet the growing energy demands of the world, and in case alternatives are not found, the world would need to find and develop four new Saudi Arabias. In the current scenario that doesn’t seem plausible.

And indeed it is the transportation sector that has to take a lead. If some real changes in global consumption patterns are to come, it has to come from this sector. Transportation is responsible for almost 70 percent of the global energy consumption.

And at the World Biofuels Market (WBM) conference, held at World Trade Centre, Rotterdam, 22-24 March, sentiments were bullish, with most agreeing that the bio-fuels market was about to turn the corner.

The use of ethanol as a transportation fuel is scheduled to increase worldwide, it was underlined in bold print. Governments are getting serious on bio-fuels. The Energy Independence and Security Act of 2007 in the US, which mandates the use of 36 billion gallons of renewable fuels by 2022, is definitely proving to be a boon to bio-fuel consumption in the all important transportation sector.

In the meantime, the image of the sector is improving too. Bio-fuels have received a lot of criticism in recent past, both from academics and environmental activists. Production of ethanol and bio-diesel has contributed to food price rises that have caused riots in parts of Africa and the Middle East, a few years back, some felt. When the food prices were surging, fingers were pointing at the bio-fuels too. The heavily subsidized production of ethanol by corn farmers in the US has particularly been receiving flak. For a combination of reasons, from political to commercial, the world seems determined now to promote alternatives. Global powers do not want to remain addicted forever to the Middle East oil.

Things are in for a change!

Newer avenues are being tapped. Technological innovations are breaking new frontiers. Work is on to develop second generation bio-fuels, based on non-food raw materials, such as urban or agricultural waste. Low-cost cellulose sugars, from agricultural residues, are of particular attention. A report on the World Biofuels Market conference referring to the subject says, “The name of the game is low-cost sugars, or affordable syngas, that competes with natural gas.”

In view of the governmental support to the sector, analysts see worldwide demand for bio-fuels growing over the next ten years. According to the “Global Biofuels Outlook 2010-2020”, a report by US consultancy Hart Energy, global demand for bio-fuels will reach 250 billion liters in 2020, as against 95 billion liters in 2010.

The International Energy Agency (IEA) now says that global bio-fuel consumption can increase in a sustainable way — from 55 million tons of oil equivalent (Mtoe) today to 750 Mtoe in 2050. And this means that the global share of bio-fuel in transport fuel would grow from 2 percent today to 27 percent in 2050.

Now this is significant, indicating a major change in the global energy mix of tomorrow.

However, the issue here is sustainability.

And whereas the market suffered from oversupply until recently, analysts are now expecting strong demand growth for the rest of the decade, particularly for ethanol. Indeed, the main question that is starting to worry market players is where the necessary supplies will come from in the coming years. There is only one country that could possibly fill the gap: Brazil. But what if Brazil won’t be able to deliver?

Of the major producers of low cost cellulose sugars, the Hart report underlines that India is short and Pakistan is iffy. Australia on the other hand is underwater; Hawaii has gone condo, while the Philippines and Thailand are small.

And thus for the time being, Ethanol derived from Brazilian sugarcane appears to offer the best hope. Brazil is already the world’s top exporter of ethanol and Hart thinks the country will further strengthen its leading position in the coming years, as its production capacity continues to expand. By 2020, Brazil will be in position to export a minimum of 13.2 billion liters to the world market, as against 5 billion liters now.

And this also brings to fore the issue of dependence and independence. While the world seems desperate to reduce its dependence on the Middle Eastern fossil fuel, especially in view of geo-political considerations, how the dependence on Brazil would help changing the overall landscape is another question. And this may haunt the practitioners of realpolitik for decades, one could say with some insight indeed. After all it takes decades, if not centuries to get hindsight on the impacts of decisions taking at this moment.