I've been seeing a lot of articles about alternative fuels lately. One of these alternatives, biodiesel fuel, is made from vegetable oil and can run all kinds of things, including automotive engines.
Many people, when they first learn about the biodiesel option, think to themselves, "Gee -- how wonderful! Here's a cleaner option that we can also grow domestically." But later, if they read up on the topic, they'll come across a commonly cited drawback: Biodiesel fuel poses a potential problem for our vital food industry.
What's the problem? Well, think back to your first economics class and the concept of supply and demand. The traditional supply and demand for commodities such as corn, soybeans, rapeseed, and flaxseed has been relatively stable. Food companies such as Kellogg
Enter biodiesel. All of a sudden, there's a potentially massive new demand for certain commodities. Demand surges, but supply can't surge overnight, so the result is an increase in price. This increase first hits food producers such as those I listed above, but they can't absorb it without eventually passing it on to us customers. So while biodiesel may be good for our cars and the environment, it may not be great for our bellies and wallets.
I was happy to read a counterargument to the one above, though, in QSR, the trade magazine of the quick-serve, or fast-food, industry. It seems that some companies are making lemonade from lemons: "McDonald's
In such scenarios, money gets saved, too, as kitchens don't have to pay to have used grease and oil removed from the premises. It's a win-win-win situation. Perhaps we'll see Burger King
If you're a follower of environmental news and/or the food or fuel industries, keep an eye out for developments in this realm. They promise to change the status quo in many arenas, perhaps for the better.
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Longtime Fool contributor Selena Maranjian owns shares of Intuitive Surgical and McDonald's. The Motley Fool has an environmentally friendly disclosure policy.
