Back in February, BP Plc (BP) and UC Berkeley proposed a deal that could provide $500 million for research aimed at using genetic engineering to increase biofuel yields. The partnership was hailed by BP Group Chief Executive John Browne as “creat[ing] the discipline of energy biosciences.” Now, protestors on the famously liberal campus, largely from the anti-GMO camp, are stepping up their efforts. Though eight months have passed since the high-profile announcement, no agreement has been signed to actually bring the Energy Biosciences Institute into being.
In a demonstration last week, protestors carried a mocked-up Trojan horse and railed against the environmental effects of biofuel production and general corporate control of research at the university. Leading the protest was a professor, Miguel Altieri, who is a long-time critic of agribusiness as an unsustainable practice. It’s easy to dismiss these small-scale activist efforts, but the protest reveals the schism within the green movement and among green consumers over the agricultural production of biofuel.
Genetically engineering crops to be better suited for fuel production is a central thrust of much biofuel research and development. It’s seen as a smart way to increase fuel yields per acre. While this is a welcome development among most energy tech investors, the environmental movement has a long and contentious history of fighting genetically engineered plants and the agribusinesses that want to use them. This type of conflict highlights the fragility of the coalition that is serious about stopping global climate change, and could dilute the enthusiasm of green consumers.
Global climate change and the end of cheap oil are the main drivers for energy tech investments. Among alternative energy investments, biofuels have received more than their fair share of funding. Most of the demand, however, is the result of government mandates on the use of ethanol. At this point, U.S. consumers don’t actually buy much ethanol. If biofuels are going to truly replace gasoline, consumers are going to have to purchase the stuff, which means biofuels are going to have to compete in the marketplace against gasoline.
Who would pay a premium to fill up with ethanol? Presumably the same green consumer who shops at Whole Foods (WFMI) and is willing to pay a premium to know that they are doing a good thing. And that’s why the Berkeley protestors, and those like them, matter. Biofuel crops, and not just corn used for ethanol, are produced using the same techniques as regular food crops. That means the use of pesticides, genetic engineering, and monocropping that some consumers have reacted against in favor of organic products.
If the very means of producing biofuels is not sustainable, or doesn’t seem sustainable to the target market, biofuels’ green halo could get erased. The appearance of strong opposition to biofuel production, even if limited in size, is bad news for those interested in the consumer markets.
Remember that the opposition to genetically modified foods has kept almost all GMO crops out of Europe and Japan, and stalled their widespread introduction — excluding corn and soy — in the U.S. as well.
Environmentalists and energy tech investors have been strange bedfellows in building momentum that “something must be done” to change our world’s path. But now that action is a given and the specific avenues of change must be decided, cracks are developing in the coalition. The question is who’s going to end up sleeping on the couch.