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Figure 2: Real Crude Oil Prices (1996 dollars), 1869-1997



Figure 5: Bio-Oil Production Cost Versus Capacity (Free Feedstock)

Liquid fuels (in particular methanol and petroleum) can also be produced from gasification products via processes that are currently employed on natural gas (Anon, 1979; Solantausta et al, 1994). The cost of manufacturing methanol from a large-scale wood gasification/methanol plant would, based on New Zealand work from the late 1970s (Anon, 1979), be currently of the order of US$18/GJ. While methanol could be used in its own right as a liquid transport fuel, it can also be converted catalytically into gasoline (Isaak & Hoffman, 1983). That would add US$18/GJ (or US$362/tonne) to the methanol cost, should it be required. This cost may be contrasted with the current cost of premium grade petrol (tax excluded) of some US35c/litre (IEA, 2000a), or equivalently US$7.7/GJ. Similarly, this may be contrasted with the international price for bulk methanol from natural gas, which currently ranges between US$200 and US$270 a tonne ( That is, biomass methanol is at least a third more expensive than methanol from natural gas or, on a dollars/GJ of energy basis, more than twice as costly as petroleum derived gasoline.

8 The 15 percent figure is based on data on the 1998 primary energy supply taken from International Energy Agency statistics whereas a 2001 report summarizing the current role of biomass in the energy-economies of 12 European countries ( gives the figure of 18 percent.

9 A recent report summarizing the current role of biomass in the energy-economies of 12 European countries ‘Strategies for the Development of Biomass as an Energy-Carrier in Europe’ ( gives the figure.

10 These subsidies should be considered in the light of hidden subsidies given to fossil fuels. For example a recent report of the USA General Accounting Office (GAO, 2000), shows that the petroleum industry has received over US$150 billion in tax breaks in the past 32 years alone. Foreign investment tax credits are estimated to cost the Treasury a further US$7 billion/yr. This compares with about $11 billion paid to the ethanol industry since 1979.

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