Big oil makes moves in the biofuels business

A recent article by Jennifer Kho from RenewableEnergyWorld.com describes big oil's recent foray into biofuels. After years of unsuccessful and eventually aborted attempts to bring renewables into a successful oil business model, it seems that big oil companies are settling on bio-fuel production and perhaps distribution, which meshes more easily with existing oil competitive advantages.

Although the sums devoted to biofuels pale in comparison to its oil business (representing 1.3 % of Exxon Mobil's after-tax profits by one calculation), analysts believe that the impact will be significant. With restricted access to capital, big oil is rescuing many firms from going under. This also means that big oil is becoming involved at the asset-acquisition rather than research and development level. This makes these powerful firms more beholden to the biofuel industry as a whole.

Reading this article, I was struck by just how important a force big oil could become in the renewables sector. Their massive infrastructure and lobbying clout could provide the push necessary to scale up the technology in a way that no other is capable. But at the same time, I felt some trepidation that big oil monopoly on biofuels would cloud out many viable renewable energy alternatives and reign in more of the same.

Would it be better if oil stayed out of the renewables business altogether?