This week, Biofuels Digest and BIO launched the quarterly Bioenergy Business Outlook Survey. Results from the first quarter of 2012 showed that industry optimism remained high earlier in the year, even though companies still reported difficulty in raising the capital needed for ongoing research and development and construction of demonstration and commercial biorefineries. Now that the petroleum refiners have launched a multi-million dollar pr campaign against the biofuel industry, it will be interesting to take the temperature of business confidence within the industry.
The bioenergy industry has good reason to remain confident. Despite the petroleum refiners’ months-long anti-biofuel campaign, voters’ support for developing biofuels remains constant. A voter opinion poll conducted at the end of May and released at the BIO International Convention shows that two-thirds of Americans support development of biofuels and bioenergy as a way to reduce both dependence on foreign oil and pollution, with 60 percent of voters rating those as very important issues for the country. Voter support for biofuels reaches 75 percent among Democrats and 67 percent among Independents; even among Republicans, support reaches 49 percent, with only 45 percent opposed. That level of support is unchanged since last Fall, even though petroleum refiners have spent millions over the past six months on lawsuits and a pr campaign to discredit biofuels.
BIO’s poll also asked biotech industry executives about the business climate in the United States. Two-thirds of respondents reported difficulty raising venture capital and private investment over the past two years. The most often stated explanation was that investors are avoiding risk. But when asked about upcoming challenges over the next five to ten years, respondents ranked the lack of access to capital as second most pressing. The biggest looming challenge for the industry, according to biotech industry executives, is partisan gridlock in Washington.
New technologies are inherently risky investments. In the wake of the recent economic downturn and the potential for another recession, investors are looking for safe places to park their money, which means that investment in new technologies could suffer. But innovation is necessary for renewed economic growth, and the potential for biofuels to reduce pollution and increase energy security is still widely recognized by voters. Stable federal policies that support innovation and renewed economic growth can have a tremendous impact on the willingness of private investors to back biofuel technology. Since the petroleum refiners’ pr campaign has failed to impress voters to date, one could speculate that the true aim is to undermine investor and industry confidence by promoting the appearance of policy stability.
The confidence of business executives and customers within the bioenergy industry can also impact investor confidence. I encourage everyone to take part in the Bioenergy Business Outlook Survey.
Filed under: Biofuels & Climate Change, Environmental & Industrial, 2011 Bioenergy Business Outlook Survey, 2012 BIO International Convention, Bioenergy Business Outlook Survey, biofuel, Biofuel Technology, biofuels, Biofuels Digest, biotech industry, Biotechnology Industry, Industry Analysis, renewable fuel standard