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in microbial, chemical, and genetic engineering research, in particular, could lead to technological advances necessary to reduce the cost of biobased industrial products. Near-term strategies may be dominated by fermentation of sugars through microbial processes for production of commodity chemicals. In the long run, similar processes may be used for large-scale conversion of biomass to liquid fuel. In the future, novel chemicals and materials that cannot be produced from petroleum may be directly extracted from plants. Today only a small fraction of available biomass is used to produce biobased chemicals due to their high conversion costs. The long-term growth of biobased industrial products will depend on the development of cost-competitive technologies and access to diverse markets.

There remains an open question as to the size of petroleum reserves and the future cost of petroleum products. Current oil reserves are substantial, and exploration continues to open new petroleum supplies for the world market (e.g., Caspian Sea). Experts estimate that two-thirds of the world's proven reserves are located in a single geographic region, the Persian Gulf, and that this area will continue to serve as a dominant source for oil exports (USDOE, 1998). Some geologists report that oil reserves could be depleted within 20 years (Kerr, 1998). According to the American Petroleum Institute, there were approximately 43 years of reserves remaining as of 1997 (API, 1997), an increase from the 34 years prevailing before the first Organization of Petroleum Exporting Countries crisis in 1973. While this committee believes there is a need to make a transition to greater use of renewable materials as oil and other fossil fuels are gradually depleted, the committee cannot predict with any accuracy the availability and cost of future supplies of petroleum.

Biobased products have the potential to improve the sustainability of natural resources, environmental quality, and national security while competing economically. Agricultural and forest crops may serve as alternative feedstocks to fossil fuels in order to moderate price and supply disruptions in international petroleum markets and help diversify feedstock sources that support the nation's industrial base. Biobased products may be more environmentally friendly because they are produced by less polluting analogous processes than in the petrochemical industry. Some rural areas should be well positioned to support regional processing facilities dependent on locally grown crops. As a renewable energy source, biomass does not contribute to carbon dioxide in the atmosphere in contrast to fossil fuels. The committee believes that these benefits of biobased products are real. However, these and other benefits listed below have not, in most cases, undergone a rigorous analysis to demonstrate their validity: