Thursday, September 21, 2006

So what is Branson actually up to ?

I ask the question as something doesn't seem to quite add up. Maybe its Bill Clinton being there, but I have the feeling things are not as the simplistic headlines would leave us to believe.

Branson was musing about buying a refinery for his airline a few months ago.

Now this is a subject I know a little about as an Engineer working in the oil industry. I have to say I'm lost as to what commercial advantage Branson would have in building an integrated oil company. Maybe that's the same conclusion he's come to when going the alternative and bio-fuel route.

So is he dressing something up he was going to do anyway ?

Biofuels are a bit of fun ( The last series of the West Wing had biofuels about right if you remember- if you don't watch it to see American pork barrel politics being depicted with a little sympathy). (Update - see this BBC article on Biofuels before you just assume they are a good idea .)

My design project as an undergraduate was to design part of a plant for converting biomass to fuel that could be used to power aircraft, and I can tell you there are some natural limitations on the size of the plant, but also you'd need to plant almost the whole UK to provide the energy needs of the country - so what will we eat ? Where will the cows live ?

If hydrocarbon prices stay up then perhaps this will make sense. Perhaps Richard Branson has been thinking about a possible supply crunch in the next ten years. Hydrocarbon fuels are hard to substitute for one application - air travel. Maybe he's looking after his investment.

A company Virgin Fuels (so solar powers not on the cards eh ? A clue to whats going on perhaps) is being brought into existence. Maybe it will develop a lot of valuable intellectual property and Mr Branson will get a return even greater than the publicity he's generating and will continue to milk for the next ten years.

Still nothing wrong with that. Good luck Richard and I hope your as smart as I think you may just be. Make money and good ideas at the same time and you'll be doing us all a favour.

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