Newsweek: Green subsidies aren't working

This is a surprise from Newsweek. Some recent examples of green subsidy: Fisker Automotive will receive a $529 million subsidy from the US government to build hybrid cars for the US market in California. This follows a previous subsidy award of $465 million to Tesla Motors to build electric cars. Both awards were made on the recommendation of former vice-president Al Gore. Don’t get me wrong, I’m an electric car fan, I drive one myself. But such projects should succeed or fail on their own merit and without public funds in my opinion.

https://i0.wp.com/www.blogcdn.com/green.autoblog.com/media/2007/11/peel-p50-1.jpg?resize=300%2C207

The Dark Side of Green

Gaming the global-warming fight.

By Stefan Theil | NEWSWEEK

Published Oct 24, 2009

Excerpts from the magazine issue dated Nov 2, 2009

Climate change is the greatest new public-spending project in decades. Each year as much as $100 billion is spent by governments and consumers around the world on green subsidies designed to encourage wind, solar, and other -renewable-energy markets. The goals are worthy: reduce emissions, promote new sources of energy, and help create jobs in a growing industry.

Yet this epic effort of lawmaking and spending has, naturally, also created an epic scramble for subsidies and regulatory favors. Witness the 1,150 lobbying groups that spent more than $20 million to lobby the U.S. Congress as it was writing the Clean Energy bill (which would create a $60 billion annual market for emission permits by 2012). Government has often had a hand in jump–starting a new -industry—both the computer chip and the Internet got their start in American defense research. But it’s hard to think of any non-military industry that has been so completely and utterly driven by regulation and subsidies from the start.

It’s a genetic defect that not only guarantees great waste, but opens the door to manipulation and often demonstrably contravenes the objectives that climate policy is supposed to achieve. Thanks to effective lobbying by American and European farmers, the more cost–efficient and environmentally effective Brazilian sugar-cane ethanol is locked out of U.S. and EU markets. Even within Europe, most countries have their own “technical standard” for biofuels to better keep out competing products—even if they are cheaper or produce a greater cut in emissions. Because the subsidies are tied to feedstocks, there is zero incentive to develop better technology.

Both the International Energy Agency and the Organization for Economic Cooperation and Development have asked Germany to end its ludicrous solar subsidies that will total $115.5 billion by 2013.

Read the article The Dark Side of Green at newsweek.com

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October 26, 2009 9:32 am

You need electricity to run them. How are you going to get it, out of windmills?
We must remember that during this same year, there were found two big oil deposits, one in from of Rio de Janeriro, Brazil and another in the US Gulf.
There is a lot of oil and NG in the world, then why such an hysterical, new aged, droggie and nervous desperation for making big toys for dumb daddy?

October 26, 2009 9:36 am

This is our present and future if AGW takes hold by way of legislation:
Subsidies for products that can’t sustain a profit (even after normal start up costs), and special taxes to prop up these non-self-sustaining products (read products with no real profits)
Enron style inside dealing and manipulation of carbon credits
Political corruption at the national level as ever more economic decisions are made in the political arena (yes, I know it’s already happening)
The rich and well connected (clients of Al Gore) finangle special deals from government that make them more rich and poerful (and thus well connected) while the little guy is pushed into a secondary role (like in third world countries)
Pushing up the costs of self-sustaining energy supplies like oil, coal, and even natural gas (even though America has a glut of natural gas)
It’s a recipe for the death of democracy and the birth of plutocracy.
The stakes are that high.

Dan Lee
October 26, 2009 9:49 am

The US & EU need to re-think their Brazil strategy. Bring in their ethanol along with the flex-fuel autos they’re making, and we’ll dramatically reduce our dependency on the middle-east almost overnight.
That would also free up the 1/3 of US crop production that goes to our own ethanol, and put it back to being used for food.

Peter Dunford
October 26, 2009 9:52 am

Interesting photo choice, those little cars have two stroke petrol engines.

Henry chance
October 26, 2009 9:53 am

Wind energy is very high in subsidy. Joe Romm suggested separate banks for favored lending. The loans would be to favored energy only. They would not be based on profits or earnings but on the product.

Vincent
October 26, 2009 9:54 am

So called renewables can’t provided a competetive source of energy, and if they could do so they would not need to be subsided. The article points out one interesting fact – if the government subsidises something, it stiffles inovation, resulting in ever higher subsidies. The corporations, being clients of the government, no longer function as efficient allocators of capital, but become synonymous with government waste. Therefore we are sleepwalking into a Soviet style command economy with predictable results.
The article failed to point out the other obvious flaw however, namely that so called renewables represents an attempt to return to energy sources that have already been abandoned by our forefathers because they are no damn good. The reason is not hard to find – energy density of wind is so low as to render it wholly unsuitable for an energy intensive economy.
The Spanish experience was mentioned, but they failed also to mention the follow on study that resulted in 2.2 real jobs lost for every “green” job. This should not be surprising to anyone at all familiar with the Broken window fallacy.
It was the nineteenth century French economist Bastiat who came up with this interesting little parable. The story is best paraphrased by Hazlitt: “A young hoodlum, say, heaves a brick through the window of a baker’s shop. The shopkeeper runs out furious, but the boy is gone. A crowd gathers, and begins to stare with quiet satisfaction at the gaping hole in the window and the shattered glass over the bread and pies. After a while the crowd feels the need for philosophic reflection. And several of its members are almost certain to remind each other or the baker that, after all, the misfortune has its bright side. It will make business for some glazier. As they begin to think of this they elaborate upon it. How much does a new plate glass window cost? Two hundred and fifty dollars? That will be quite a sun. After all, if windows were never broken, what would happen to the glass business? Then, of course, the thing is endless. The glazier will have $250 more to spend with other merchants, and these in turn will have $250 more to spend with still other merchants, and so ad infinitum. The smashed window will go on providing money and employment in ever-widening circles. The logical conclusion from all this would be, if the crowd drew it, that the little hoodlum who threw the brick, far from being a public menace, was a public benefactor.
Bastiat knew that the fallacy came about because the crowd only reason upon what they can see, not on what is unseen. ” That the shopkeeper would have otherwise visited the tailor to buy a new suite. The glazier’s gain of business, in short, is merely the tailor’s loss of business. No new “employment” has been added. The people in the crowd were thinking only of two parties to the transaction, the baker and the glazier. They had forgotten the potential third party involved, the tailor. They forgot him precisely because he will not now enter the scene.”
The fallacy of the broken window is so well known that it is amazing that anybody still commits this error. Yet this is exactly what is happening with the claim that subsidies will create new “green” jobs, because the money that is used to create them can no longer be invested in real jobs. This must be so because society has a fixed amount of labour, land and capital that it can draw upon to meet production. Any form of subsidy is a claim on these inputs, and hence is effectively to “break windows and replace them.”
That is why the Spanish lost more real jobs than “green” ones, and the same will happen in every other country that attempts to direct production in this manner.

Robert M.
October 26, 2009 10:15 am

Dan Lee,
The US has enough food for its needs. It is not our job to feed everyone on the planet. If there is a food shortage somewhere else, it is not caused by us using OUR resources to meet OUR needs. We will gladly sell our food to anyone who can pay. I have never heard anyone complain about OPEC and their failure to produce enough oil for the world. With OPECs failure to produce enough cheap oil to fill our vehicles, why should we not make ethanol out of our surplus? Why is only the US blamed? I say let them eat their oil.

Indiana Bones
October 26, 2009 10:20 am

As with all well thought exercises, now that Climate Change appears to have been slain – new challenges must be created. Thus an about face by struggling MSM newsrag Newsweek. The purpose in this next phase will be to tarnish the idea of alternative energy. It’s proponents, the antithesis of greens, will argue for continued fossil fuel agendas.
What will be studiously avoided is mention of the $700B annual payments Americans make to foreign oil interests. Or the destablizing effect of having to defend foreign oil interests. Or the national security jeopardy resulting from reliance on foreign oil interests.
There are reasonable questions about the way funds have been spent. While Tesla has proven through successful investment, start-upand production phased development of the world’s best passenger electric vehicle – you might ask what has Fisker done. Or why ethanol should remain subsidized. All issues that should be addressed.
What cannot be obfuscated is the losing proposition that is long term foreign oil imports. Domestic energy production and electrification of transport are two first steps in the logical goal of energy independence.

October 26, 2009 10:34 am

Dan Lee (09:49:08) wrote:
“The US & EU need to re-think their Brazil strategy. Bring in their ethanol along with the flex-fuel autos they’re making, and we’ll dramatically reduce our dependency on the middle-east almost overnight.
That would also free up the 1/3 of US crop production that goes to our own ethanol, and put it back to being used for food.”
Dan, your comment does not hold up to close inspection:
Brazillian ethanol works for Brazil because it is limited mostly to Brazil, where the number of cars per capita is much lower than the U.S. . The wholesale exportation of Brazillian ethanol would drive up the price of food in Brazil by converting food producing land into ethanal acreage (and have ripple effects the world over), and being that I’m a reasonable conservationist, put even more development pressure on the Brazillian, Amazon rain forest.
Ethanol is one of those alternative energy ideas that don’t pan out in practice (even though sugercane is the one crop that will produce more energy output than it takes in energy inputs).
What we really need to decrease Middle East oil dependence is full exploration & production of offshore oil deposits off American shores. Notice I said “decrease”, we will never be totally independent of Middle East oil, but America sure can decrease this dependence and world dependence on Middle East oil by creating oil sources in other parts of the world, particularly the United States, so the Middle Eastern oil just one important source of oil among many sources.
And to throw in: Nucleat power also needs to be considered. New, advanced technology in nuclear power has made it safer and easier. If France can get 70% of its electrical power from nuclear, America can at least increase its percentage (doubtful we’d ever get close to 70%).
And there are more advanced technologies on the horizon that could contribute — but won’t get the investment if we are stuck on the current crop of “green” technolgies.

October 26, 2009 10:37 am

Domestic energy production and electrification of transport are two first steps in the logical goal of energy independence.
And drilling your vast oil reserves.

wws
October 26, 2009 10:51 am

There’s something wicked inside of me, I can’t explain it. But when I see pictures like the one at the head of this article I find myself seized by an almost uncontrollable urge to get get me a Hummer and squash all of them, wtihout mercy.

October 26, 2009 10:55 am

Do the “lemmings running” it’s a good excercise. All your troubles will end after running. Believe me!

John Egan
October 26, 2009 10:57 am

Of course, construction of the the transcontinental railroad –
Was also one giant boondoggle of a subsidy.
So ain’t nuttin’ new.

October 26, 2009 10:57 am


Government has often had a hand in jump–starting a new -industry—both the computer chip and …

I would remind our writer at Newsweak that TI holds the patent for the microcircuit and an early calculator (arguably a computer of sorts) and it was _not_ the product of a government ‘jump start’ grant.
That patent can (could at one time anyway) be inspected/seen just inside the doors of the corporate offices locacted in the North Building at the TI campus at US-75 and I-635 in Dallas … on one encounter with Jerry Merriman (listed on the patent) years ago now he personally described the experience of getting the first prototytpes operating (including the meticulous removing of ‘shorts’ that hadn’t etched completely away on the “integrated circuits” that were on the fabricated wafers).
Patent:
http://smithsonianchips.si.edu/patents/3819921.htm
More info, early calculators:
http://www.xnumber.com/history_pages/history6.htm
.
.
.

October 26, 2009 10:58 am

The complete and utter economic devastation that could/would be caused by continuing this farcical agenda is starting to make itself evident.
It is perhaps pertinent here to highlight the financial exploits of Al Gore, but that is just trivial to what is really going on. There are many that are exploiting the AGW agenda to their immediate advantage and equally as many who are going to come crashing down to the detriment of all of us.
Already we have seen the demise of a large wind turbine company in the UK. Many similar enterprises are to follow in the coming years, why?, because wind power, wave power, electric whatever’s, orbital reflectors/other weirdnesses or geothermal power are not viable answers to the perceived and/or mythical problem until they are proved to be so (economically, practically or even morally).
I am not saying that these options are not viable in the long term as an answer to future energy needs. Some are certainly interesting and need support. My personal favorites here would be geothermal, improved nuclear technology and the continued use of known and yet to be discovered carbon reserves.
No I do not believe that trace amounts of CO2 are causing any discernible change in anything except increased plant growth. My interest lies squarely with the survival of our own species and as natures own invention we have as much right to dominate and exist as did the dinosaurs. We have only ruled for a tiny fraction of the period the dinosaurs did but we are perhaps the first beings that are able to understand (sort of) the nature of the universe. These other green beings would have us going back to living in caves and waiting for, well nothing really. Whats the point then?

TJA
October 26, 2009 10:59 am

“Green Jobs” that always reminds me of the great line from that song “Put another log on the fire”
It goes “Ain’t I gonna take you fishin’ someday?”
How we are going to get economic growth out of higher priced energy is simply beyond me.

ShrNfr
October 26, 2009 11:12 am

Raw political pork. No more, no less. And yes, I own a NEV.

Terryskinner
October 26, 2009 11:15 am

To my mind political agreement with ‘climate change’ is neither sinister nor hard to understand. It is popular amongst democratic politicians because they think there are votes in it. Not only that but there are entire organisations who will campaign for and donate to them if they are opposed by a non-believer or a party of non-believers.
This is why all major parties in the UK accept the need to combat ‘climate change’. They see it as an opportunity (we’re greener than you are) and a threat to them if they do or say anything else.
Public Opinion polls showing greater and greater scepticism on the subject, i.e. there are likely to be votes on the other side, are the only thing that will turn this around. Blogs like this, scientific dissent and above all lots and lots of cold weather is what will change perceptions.

October 26, 2009 11:16 am

James F. Evans, Adolpho Giurfa:
Having read The Prize by Daniel Yergin, (for which he won a Pulitzer Prize for Literature), the US will not easily (nor soon) adopt a strategy to drill for oil in the US.
Yergin makes a compelling case that oil has too much value strategically, in a war, to be imported where such imports can be cut off. Japan learned this lesson the hard way. Leaving our known oil deposits in the ground – where nobody can blow them up – is a wise strategy in a world growing ever more aggressive and war-like.
I advocate for using Picken’s Plan – produce natural gas for vehicular use, and wind and solar power to reduce natural gas power plant fuel consumption.

R Pearse
October 26, 2009 11:24 am

Fisker. Have they ever made production cars? I see that they now say they can build one for $39k, provided the government kicks in a $7,500 subsidy (in addition to its loan to build its works). Isn’t that really a $46,500 car? The car it is building will be assembled in Finland and sold for about $80k. I don’t see the general population being able to afford these.
And what is Tesla building that I can buy for the same price as a Jeep Patriot?

rbateman
October 26, 2009 11:31 am

For land freight, the railroad is far more fuel-efficient than semis.
Much renovation needs to be done for rail (old lines).

rbateman
October 26, 2009 11:33 am

We are NOT going to get any economic growth OR recovery out of higher ‘Green priced’ energy. It’s a pyramid scheme with to top tier making off with the goods.

October 26, 2009 11:49 am

The good news about stimulus in economy is that it works on the contrary sense EVER, ask any economist.

John Galt
October 26, 2009 11:52 am

We have a great example here of the “command” model of economics v. the free market model. The free market always outperforms the command economy except for some short-term periods.
When the government chooses to subsidize a company or technology, they are artificially selecting a winner. Those companies have less incentive to be competitive and other, better technology has a lesser chance of emerging.
Just say no.

hotrod
October 26, 2009 11:53 am

Dan Lee (09:49:08) :
The US & EU need to re-think their Brazil strategy. Bring in their ethanol along with the flex-fuel autos they’re making, and we’ll dramatically reduce our dependency on the middle-east almost overnight.
That would also free up the 1/3 of US crop production that goes to our own ethanol, and put it back to being used for food.

The corn used for ethanol production is not sweet corn used for human food consumption, it is field corn which is grown as an industrial commodity. The waste product of ethanol from corn is dried distillers grain and solubles which has higher nutrition value than the corn it came from thanks to the enhancement due to the yeasts who turn the fermentable sugars and starch content into ethanol. The DDG&S is then used as a high quality feed supplement for live stock.
Ethanol from corn is only an interim step, like the biplane was an interim step in the development of commercial air transportation. We are rapidly moving toward cellulose and algae based ethanol production. Ethanol from corn will continue as a niche product due to the high quality livestock feed it produces and the increased market value of the corn it creates, but only in local markets where Corn is the dominant agricultural crop anyway. It will not and was never intended to be a total displacement fuel for oil, it is just one of many incremental moves to a more diversified transportation fuel system.
Use of ethanol as a gasoline blending agent directly increases our fuel supply and reduces our petroleum fuel imports. If the goal of reducing oil imports is to reduce dependence on foreign sources it makes no sense to substitute another foreign energy supplier for the middle east by making Brazil a critical supplier.
The reason ethanol fell out of use was a combination of ultra cheap local oil production (while we were still producing most of our own oil), and Prohibition which shut down domestic ethanol production in the 1920’s. When prohibition ended gasoline was so entrenched that ethanol was never able to re-establish itself as a motor fuel because it was more valuable as a distilled spirit due to the onerous taxation on ethanol. It was not until the late 1970’s after the Arab oil embargo that that issue resolved it self both through price hikes in foreign oil and changes in regulations about fuel ethanol production which set procedures for fuel ethanol production. At that time ethanol absolutely needed subsidies in order to develop and mature production methods. It is only the last few years that production processes have matured sufficiently for it to become competitive.
If all direct and indirect subsidies to oil were removed ethanol would be economically competitive without any subsidies. As it is it can compete heads up when oil reaches the cost levels we saw during the recent oil price spike.
Unfortunately right now, the subsidies go not to the farmer or the producer of the ethanol, but to the “blender” which is the oil companies with only rare exceptions. In effect the blenders tax credit subsidizes ethanol’s primary competition in the fuel market the oil refiners and blenders, so ethanol subsidies are in fact oil subsidies as currently setup.
Larry

Josh
October 26, 2009 12:02 pm

Why has Cannabis Hemp been ignored as a biofuel? Hemp grows quickly and abundantly in a variety of climates with minimal care (it is a weed afterall). Why use corn for fuel when we could be harvesting millions of acres of Hemp for fuel? The continued demonization of Cannabis is ridiculous. I’m not talking about Cannabis for smoking, I’m talking about industrial Cannabis Hemp. It’s an amazing resource that we’re not utilizing, and of course numerous corporations oppose Hemp and lobby intensely against it. Using Hemp for fuel could help alleviate our dependence on foreign oil and end the use of our food crops for fuel. The Greens would like it too since Hemp is a renewable resource. Is there any reason why we shouldn’t use Cannabis Hemp for biofuel?

BernardP
October 26, 2009 12:11 pm

Global Warming Hysteric Sharon Begley is a Newsweek journalist. Most others Newsweek writers are postulating the Truth of AGW, with the exception of George Will, and to a lesser degree, of Robert Samuelson. As a Newsweek subscriber, I find this constant undertone increasingly annoying.
Newsweek, which is a subsidiary of the Washington Post Company, has an obvious pro-AGW editorial policy
The day Newsweek reverses itself on Global Warming, then we will know a Mainsteam Media tipping point has occured.

Robert Wood
October 26, 2009 12:12 pm

Dan Lee (09:49:08) :
The US isn’t dependant on Saudi Oil. The biggest oil source for the US is Canada, then MExico, I think.

Lennart Bilen
October 26, 2009 12:16 pm

Isn’t the promotion of ethanol a curious choice if limiting the CO2 emissions is a desirable goal.
Half the weight of the sugar molecule gets up in the air as CO2 when sugar gets fermented into ethanol.
Hic, who are we kidding?
Or is it just the revenooers that are on our trail?

Scott B
October 26, 2009 12:25 pm

Robert M. (10:15:45) :
“We will gladly sell our food to anyone who can pay. I have never heard anyone complain about OPEC and their failure to produce enough oil for the world.”
To be fair, the US complains about this all the time. We complain and work things over behind the scenes to get them to increase the amount of oil being sent which lowers the price.
Here’s the Clinton admin: http://www.nytimes.com/2000/03/27/world/opec-oil-increase-likely-to-fall-short-of-clinton-s-target.html
Here’s Bush: http://www.cnn.com/2004/ALLPOLITICS/03/31/whitehouse.opec/index.html

Chris C.
October 26, 2009 12:29 pm

The transcontinental railroads in the U.S. were indeed built with massive subsidies (free land for the railroad companies). However, the U.S. Government still owned the rest of the land, which was suddenly worth much, much more than before the railroad was built. Up until the end of the 19th century, the single largest source of revenue for the government was the sale of land.
I don’t see that sort of payoff for the taxpayers in the current “green” energy subsidies.

Stoic
October 26, 2009 12:30 pm

Terryskinner (11:15:44) :<>
Although, sadly, the Science Museum poll has been corrupted, it is still running. Ignoring the possibility of ballot stuffing, the scores have been ticking up since 14.00 GMT at the rate of over 6:1 sceptic.
Regards
S

Ack
October 26, 2009 12:32 pm

I love what Tesla is attempting, however why subsidize something only the rich can afford?

Stephen Brown
October 26, 2009 12:33 pm

More on the Peel cars featured in the leading illustration can be found here:-
http://homepage.ntlworld.com/andy.carter/
They are allegedly the smallest cars ever produced commercially.

Zeke the Sneak
October 26, 2009 12:37 pm

If we want to retain personal autonomy in where we travel, we must not allow the gov’t to mandate all electric cars.
This will only result in control, high prices, rationing and in being jammed all together aboard public transportation.
“The American Recovery and Reinvestment Act included more than $80 billion in clean energy investments that will jump-start our economy and build the clean energy jobs of tomorrow:
$11 billion for a bigger, better, and smarter grid that will move renewable energy from the rural places it is produced to the cities where it is mostly used, as well as for 40 million smart meters to be deployed in American homes.”
whitehouse.gov

hotrod
October 26, 2009 12:41 pm

Lennart Bilen (12:16:49) :
Isn’t the promotion of ethanol a curious choice if limiting the CO2 emissions is a desirable goal.
Half the weight of the sugar molecule gets up in the air as CO2 when sugar gets fermented into ethanol.

Many ethanol producers are capturing that CO2 and selling it as a commercial co-product to CO2 users like green houses (increase crop yield) and dry ice and carbonated drink producers.
It is CO2 neutral in that the feed source used to make the ethanol recaptures an equivalent amount of CO2 during the next growing season.
Many of the folks who support fuel ethanol could care less about CO2 anyway as it is a harmless trace gas and necessary to plant growth. We support ethanol for other reasons like a diversified transportation fuel source, and its high fuel quality.
It like biodiesel is also the only practical way to store solar energy for indefinite periods of time in a readily transportable and usable form.
Larry

David S
October 26, 2009 12:47 pm

Anthony may I ask a few questions about your electric car?
Do you recharge it from a standard 120 volt 15 amp outlet?
How far can it go on a charge?
What is the top speed?
Do you know how much it weighs ?
Thank you
Dave

October 26, 2009 1:04 pm

Pink ones would do much better.
BTW: Did you know that “Amazing Grace” was written
by a slave trader?
)))((((((
(*)…(-)
….U….
..[___]..

October 26, 2009 1:05 pm

I will post my calculations again, demonstrating that electric cars are less efficient and more polluting than diesels.
Engine type Efficiency Miles per gallon equivalent (100% = 120 mpg)
Petrol 22% 27
Diesel 37% 45
Battery 31% 37
Hydrogen 22% 27
Basically, you don’t have to store the energy from a diesel engine – it goes straight to the wheels. All an electric car does, is transfer the pollution from the city to the countryside (where the power station is).
If you had 100% of your electrical power generated by nuclear power, electric cars would make a great deal more sense. And please do not think that windelecs (wind turbines) can do the job – if you rely on them, you would only get to work for one week in every three.
We would also have to triple the number of power stations, to cope with electrical demand for transport systems. Greenies will not mention this, for some reason. Their Green agenda is based upon smoke, mirrors and downright lies.
.
Notes:
Petrol car assumes 10% losses for refining, 2% losses on transport from depot to station, and 75% petrol engine losses (25% efficient engine, which is average).
Diesel car assumes 5% losses for refining, 2% losses on transport from depot to station, and 60% diesel engine losses (40% efficient engine, which is average).
Battery car assumes 55% power station losses in generating electricity, 5% transmission losses to the socket, 20% battery losses, 10% electric motor losses.
Hydrogen car assumes 35% in reforming losses, 10% compression, 5 % transportation, 50% fuel cell, and 10% electric motor losses.
Petrol and diesel efficiencies assume European cars, not American gas-guzzling dinosaurs.
Transmission system losses assumed same. In practice, electric engine transmission systems are probably simpler and more efficient.
Analysis of fuel cells.
http://www.efcf.com/reports/E04.pdf
Energy consumption:
http://www.berr.gov.uk/files/file11250.pdf
And PLEASE, PLEASE, PLEASE. Windmills grind grain into flour. Windelecs generate electricity.
.

Phillip Bratby
October 26, 2009 1:10 pm
L Bowser
October 26, 2009 1:10 pm

I believe the top supplier of US Oil is… the US. Then followed by Canada, Mexico, Saudi Arabia and Venezuela. In that order I think. Statistically, there is not a big difference between Mexico and Saudi Arabia. For the year Mexico usually wins. On a month by month basis it may differ. Of course, this is only if you are talking about crude imports used for distillates produced by US refineries. However, I believe that if you count the 15% of distillates we import (from Europe mainly), then Saudi Arabia moves ahead of Mexico on a permanent basis. This statistic will never be reported by the US government because we only look at sourcing for crude oil we import for our own refineries and not the sourcing of crude oil for distillates we import.
In terms of working behind the scenes with the Saudi’s, this is simply not going to happen as much going forward. First, they are near their maximum output when the world in not in a recession, and will not be able to control the world price like what they did for the last two decades unless they start developing some of their other large oil fields. Second, there is a practical aspect to this from their side. They don’t really need any more oil money than what they are making now. It covers far more of their govenment expenses than what they planned for (Their government plans on ~$50/barrel oil.)

Finker
October 26, 2009 1:14 pm

hotrod (11:53:57)
Thanks for the insight on this corn to biofuel situation. Very neccesary knowledge on this issue that seems to be ignored no matter which side of the AGW debate one happens to view from.
Josh (12:02:26)
Brilliant observations. We can blame the Cotton Growers lobby (circa 1920) for the sad state of hemp in North America today. It is a wonder-plant and could solve so many problems if just given a chance. And what Greenie would rally against weed… man?

October 26, 2009 1:15 pm

And this is Jeremy Clarkeson from TopGear test driving the Peel P50. Just the card for Greenies – especially if there is a juggernaut (big-rig) doing 70mph behind.

.

October 26, 2009 1:17 pm

Larry, (hotrod), ethanol from corn is a net energy consumer – not producer. California’s Air Resources Board and federal EPA both concur.
Also, for anyone in the Los Angeles area, a good presentation on cellulosic ethanol is scheduled for tomorrow night in Long Beach. The meeting announcement is below, I can provide meeting location/time to anyone if you send me an email at the address above (click my name).
“BlueFire Ethanol Fuels, Inc. has completed the arrangement of the major commitments necessary to proceed with final development of its first commercial facility, which will be sited in Lancaster, California. BlueFire Ethanol, Inc., a Nevada corporation developing cellulose-to-ethanol plants in North America, is actively cooperating with JGC Corporation in developing projects in Japan and Southeast Asia. JGC licensed the ARKENOL technology from BlueFire’s licensor and has built two pilot plants for themselves and the government of Japan (NEDO). The latest one just completed four years of operation on Japanese waste wood, rice straw and waste biomass.
The Japanese government is cautiously moving forward on opening the fuel-ethanol market previously closed to all but the beverage industry. JGC Corp.’s Izumi pilot plant can be seen on the Bluefire webpage. They are cooperatively participating in BlueFire’s development of a 2.5 million gallons/year commercial facility in Lancaster, California .
Unlike other biofuel producers, BlueFire uses acid hydrolysis, which requires less energy. BlueFire does not need either high temperatures or high pressure to make their process work. That means the equipment used is less costly as well. The uniformity of the biomass is less important because they do not need specific, appropriate enzymes. Often one enzyme will work for corn, not rice or tree leaves. Sulfuric acid works equally well on all starches and the binding lignin found in plant matter.
Acid hydrolysis does require dry biomass. That green trash picked up by sanitation trucks often runs about 40-percent water, but once a commercial scale BlueFire plant is running, it will create enough hot air exhaust to be able to do its own drying, essentially for free. The process would also allow complete reclaiming of steam by adding a condenser system at the exhaust end. This is particularly useful in dry areas like southern California. Water use is a touchy issue among ethanol makers and critics. The BlueFire process requires about five gallons of water per gallon of ethanol, and much of the water could and should be reclaimed and re-used.
The BlueFire process uses a continuous fermentation process on their sugars, producing ethanol in about six hours, much faster than many existing ethanol plants that can take up to three days. The process also saves on storage and energy costs. Finally, unlike ethanol from corn or sugar, the biomass BlueFire wants to use is green refuse, which has no other long-term human use.
The speaker, John Cuzens, is BlueFire Ethanol’s Chief Technology Officer and Senior Vice President. He has held this office since the company’s inception in March 2006. Mr. Cuzens was a Director from March 2006 until his resignation from the Board in July 2007. Prior to this, he was Director of Projects at Wahlco Inc. from 2004 to June 2006. He was employed by Applied Utility Systems Inc. from 2001 to 2004 and Hydrogen Burner Technology form 1997 to 2001. He was with ARK Energy and Arkenol from 1991 to 1997 and is the co-inventor on seven of Arkenol’s eight U.S. Patents for the conversion of cellulosic materials into fermentable sugar products, using a modified strong acid hydrolysis process. Mr. Cuzens has a B.S. Chemical Engineering degree from the University of California at Berkeley .”

October 26, 2009 1:32 pm

.
Sorry, I should have also pointed out Jeremy Clarkeson’s classic piss-take of the BBC’s AGW-Greenie culture. Scroll to 7:40 minutes on this clip.

This is a classic satire of why the BBC has no money left to make decent programmes – but the same will be true of all industry, if we let the Greenies control government. According to the Times, UK industry alone faces a £370 billion bill to keep the Greenies happy.
http://business.timesonline.co.uk/tol/business/economics/article6888941.ece
But that claim should be rephrased. Industry will just pass the bill onto us. So this is our bill, and if we don’t pay then all our industry goes tits-up, and the nation is sunk without trace.
Thanks, Greenies.
.

Allan M
October 26, 2009 1:34 pm

What on earth are those hideous, coloured Cyclopsian frogs in the photo?
OK, I know really. I wouldn’t like to be in any sort of serious prang (accident) in one of them, though. Instant mince meat.

SandyInDerby
October 26, 2009 1:41 pm

Completely OT but something interesting is happening at the Science Museum at the moment.
http://www.sciencemuseum.org.uk/proveit.aspx

L Bowser
October 26, 2009 1:48 pm

I agree with what Ralph says in terms of efficiency losses. The problem is criteria selection. People who make their decisions based primarily on economics worry about efficiency. This is not what a Green does. Greens and AGWs are concerned primarily with atmospheric emissions, and in turn emission reductions and mitigation. By leaving the biggest part of the greens argument out of the equation, which is CCS (as imaginary as it may be at this point), there is a value criteria disconnect in the argument. With a 100% electric vehicle, 100% of the CO2 is theoretically sequestrable. When you add sequestration into the picture, where a Green/AGW is not primarily concerned about efficiency, but rather CO2 emissions, the ranking then becomes Electic, Fuel Cell, Diesel and then Petrol (gasoline).
To further emphasize my point that Greens are more about emissions control and not efficiency, the US could easily increase the efficiency of the entire gasoline fleet on the road today. Simply remove the catalytic converter and add the lead back into the gasoline. This simple fix would increase efficiency by 5-10%. Of course it would also contribute to increased smog, ozone, CO emissions and lead in the ground water. But hey, the efficiency is better (he says tongue in cheek.)
The primary point here is its easier to monitor, police and mitigate 1000 smoke stacks than 150 million tail pipes belching out CO, CO2, NOx and SOx.

JamesG
October 26, 2009 1:50 pm

Well there is a difference between a loan and a subsidy. But more importantly Tesla and Fisker only asked for these loans to get some sort of parity with the GM, Chrysler subsidies/loans. So you have it backwards. Without these loans Tesla and Fisker would have been severely disadvantaged by the government largesse funding gas-guzzlers or plugin hybrids. There probably will be a big demand for practical leccy cars though, which will likely drop in price substantially as more folk buy because leccy tech always does.
If anyone does cost comparisons they shouldn’t forget to allow for the fact that the base load at night is mostly wasted energy. Electric cars charging can use up that previously unused energy which is hugely significant for comparing real costs. And yes, there is enough spare base load to change up everyones cars – it’s been studied.

Adam Gallon
October 26, 2009 1:52 pm

Re Allan M
The Cyclopsian frogs also featured on Top Gear.
The Greens will be fitting, as they’re two-stroke engined Peel Type 50s. (The yellow one looks particularly smokey)
Jeremy Clarkson drove one around the interior of the BBC, even going up in a lift in it.
Whilst being exceptionally small, it does lack reverse gear (So no sales to Italy!)
Brazil’s bio-ethanol industry is basically a work-fare programme, employing otherwise jobless & thus starving & homeless men.

hotrod
October 26, 2009 1:53 pm

Roger Sowell (13:17:54) :
Larry, (hotrod), ethanol from corn is a net energy consumer – not producer. California’s Air Resources Board and federal EPA both concur.
Care to site the sources?
There is just as much bogus science in the net energy calculations of biofuels as there are in the global warming debate. In many cases they are not counting co-products and including energy expenditures for infrastructure that they ignore when calculating net energy yield for petroleum. Pimentel is the Michael Mann of the green energy studies. He is the only researcher that consistently finds negative values and continues to turn out crap studies based on out of date research and flawed accounting and assumptions.
Current technology ethanol from corn has a positive energy balance with proper accounting methods.
http://www.usda.gov/oce/reports/energy/aer-814.pdf
Larry

JamesG
October 26, 2009 1:55 pm

Josh
I don’t know if you knew this or not but one of Henry Ford’s earlier cars ran on methanol made from hemp.

hunter
October 26, 2009 2:11 pm

Windmill is the perfect name for an idiotic technology.

October 26, 2009 2:15 pm


Josh (12:02:26) :
Why has h emp been ignored as a biofuel? H emp grows quickly and …

Kudzu; you forgot Kudzu (WHICH I think probably outgrows h emp) –
– except for … uh … ‘medicinal’ (or … wait-for-it … TAX) purposes …
.
.
.

Ed Scott
October 26, 2009 2:19 pm

Where is Algore when you need him?
No “clean energy” bill signing for China.
Who remembers the post-war Messerschmitt? A three-wheel car that appeared to be a tandem-seat aircraft cockpit on wheels.
————————————————————-
Amazing Pictures, Pollution in China
http://www.chinahush.com/2009/10/21/amazing-pictures-pollution-in-china/
“At the junction of Ningxia province and Inner Mongolia province, I saw a tall chimney puffing out golden smoke covering the blue sky, large tracts of the grassland have become industrial waste dumps; unbearable foul smell made people want to cough; Surging industrial sewage flowed into the Yellow River…”
– Lu Guang

Roger Kelley
October 26, 2009 2:25 pm

Coincidentally, someone sent me a photo today of a Smartcar crushed between two trucks – it´s now about two feet long – not sure what happened to the person inside, but there is an ambulance in the pic. as well, so it´s anyone´s guess.
How, do I go about getting the pic. to you?

Simon
October 26, 2009 2:33 pm

Simon says..
anyone remember the Cat in the Hat?

Dave Wendt
October 26, 2009 2:45 pm

Corporations and businesses are driven by economic realism. They understand that, if they take their capital and profits and invest them in R&D,design, or new equipment and make all the right choices, they can expect to earn perhaps 10% on their money, maybe 25% briefly, if they come up with the hot next new thing. If, however, they invest $10,000, $100,000, or maybe a million or two in the political class, they can reap grants, subsidies, and contracts worth millions, hundreds of millions, or billions with little of the nasty uncertainty that accompanies regular investment. In the modern world it’s a no-brainer decision.
The only really effective way to limit government corruption is to strictly limit it’s power and scope of control. The former Soviet Union is the crowning example. Since the State controlled everything corruption was endemic and pervasive. The smallest petty bureaucratic action couldn’t be accomplished without a bribe changing hands. The wise old white guys who were our Founding Fathers realized this and, guided by the work of Montesquieu and philosophers back to Plato and Aristotle, strove mightily to craft within our Constitution a governmental structure whose primary purpose was to protect the People from the Government. But even they realized it would take profound dedication and diligence on the part of the People to maintain what they provided.
Unfortunately, that dedication and diligence has only been evinced quite sporadically, while the tyrannical impulse it was meant to guard against has been relentless. From Lincoln, to Teddy Roosevelt, to Wilson, FDR, LBJ, Nixon, Carter, Clinton, Bush, and now the One, government power has grown inexorably, while Liberty and Freedom have been slivered away like a pumpkin pie on a Thanksgiving sideboard, until we find ourselves in the present moment, perched on the precipice like flock of lemmings, staring into the abyss of a future ruled by a global government composed of self righteous nannystate bureaucrats.
If the present trends are any indication, that world will be so tightly controlled that we will have to raise our hands like first-graders for permission to go to the toilet and it would be ironic justice if the single sheet of TP we are granted to complete our business was made from recycled copies of our Constitution, that most precious gift those dead old white guys gave to all of humanity, so that we can do literally, what we have been doing to it figuratively all these years.
As I’ve watched the events of recent years unfold, I’m often filled with an overwhelming sense of shame since I can honestly say I saw this coming more than 40 years ago and while I’ve often taken the occasion to rise and rail against the looming tide, I’ve never had the courage to fight it with anything like the full commitment that it merited. I fear our legacy in the future will be to be an epithet on the lips of all those who will be forced to inhabit the world we are about to bequeath them. Not because of anything that occurs with the climate, but because we were willing to surrender human freedom to convenience, indifference, and acceptance of the manipulations of tyrannical hucksters. Our ignominy will be richly deserved.

ShrNfr
October 26, 2009 2:52 pm

@JamesG didn’t Obama run on hemp too for a while?

Ed Scott
October 26, 2009 2:56 pm

Dr. Bob Carter discusses the IPCC’s science of deceit.
————————————————————-
The science of deceit
by Bob Carter
October 26, 2009
http://www.quadrant.org.au/blogs/doomed-planet/2009/10/alarmism-contra-science
Science is about simplicity
A well-accepted aphorism about science, in the context of difference of opinion between two points of view, is “Madam, you are entitled to your own interpretation, but not to your own facts”.
The world stoker of the fires of global warming alarmism, the United Nations Intergovernmental Panel on Climate Change (IPCC), cleverly suborns this dictum in two ways.
First, the IPCC accepts advice from influential groups of scientists who treat the data that underpins their published climate interpretations (collected, of course, using public research funds) as their own private property, and refuse to release it to other scientists.

October 26, 2009 2:59 pm

Hotrod said
“If all direct and indirect subsidies to oil …”
I would ask what subsidies in particular are being referred to?
I only ask because it is a standard argument in the discussion as to why other energy sources cannot compete, so I am wondering what these subsides are.

October 26, 2009 3:11 pm

hotrod,
ARB’s website for bio-ethanol is shown below. Scroll down to see the Staff Report and Appendices.
And yes, they do give credit to corn refineries for DDGS and energy exports, but refuse to do the same for co-products from oil refineries. Oil refineries produce and sell approximately 15 percent of the products into non-fuel uses, such as asphalt, lubricants, and petrochemical feedstocks. Ethanol from corn looks even worse if proper accounting is done.
http://www.arb.ca.gov/fuels/lcfs/lcfs.htm
I also wrote on ARB’s analysis here:
http://sowellslawblog.blogspot.com/2009/03/ab-32-and-low-carbon-fuel-standard.html

tallbloke
October 26, 2009 3:23 pm

Robert M. (10:15:45) :
Why is only the US blamed? I say let them eat their oil.

That should be a tasty main dish after an entree of depleted uranium and phosphorus.

Stephen Brown
October 26, 2009 3:27 pm

I refer to Kate’s contribution and the article she cited.
An extract .. “Green taxes already make up 7 per cent of the Government’s tax take.”
Imagine how popular a political party would be if they stated that they would REDUCE each person’s tax burden by 7% without any detriment to existing services whatsoever!

tallbloke
October 26, 2009 3:30 pm

Dave Wendt (14:45:29) :
Cracking post sir!

tallbloke
October 26, 2009 3:34 pm

JamesG (13:55:31) :
Josh
I don’t know if you knew this or not but one of Henry Ford’s earlier cars ran on methanol made from hemp.

And Herr Diesel was all for running french military submarines on palm kernel oil until he was found floating face down in the English Channnel…

007
October 26, 2009 3:37 pm

What’s truly amazing is that the US Dept of Energy rejected a debt guarantee for USU, the only US owned processor of nuclear fuel. The centrifuge they are building would enrich nuclear fuel using approx 80% less energy than the current technology. It’s baffling!
USU has major long term contracts with domestic utilities to deliver nuclear fuel but if they don’t finish the new facility they will not be able to compete.
USU is not asking for a grant, but a guarantee of debt used to finish this project. Assuming it goes well, there would be now cost to tax payers. Without the guarantee there is virtually no way they will be able to issue the debt in the current market to finish the project.
Energy independence??? Not from the people who are irrationally against nuclear.

Josh
October 26, 2009 3:37 pm

JamesG (13:55:31) :
Josh
I don’t know if you knew this or not but one of Henry Ford’s earlier cars ran on methanol made from hemp.
I did know Ford used hemp-derived fuel for his early cars. As I understand, the petroleum industry lobbied intensely and ran a smear campaign against biofuels in the early 20th Century. Amazing how history changed due to petroleum becoming the dominant fuel.
ShrNfr, Obama has always run strictly on B.S.

H.R.
October 26, 2009 4:00 pm

Dave Wendt (14:45:29) :
SPOT ON (sadly). Excellent post!

Indiana Bones
October 26, 2009 4:07 pm

hotrod (11:53:57) :
Dan Lee (09:49:08) :
The US & EU need to re-think their Brazil strategy. Bring in their ethanol along with the flex-fuel autos they’re making, and we’ll dramatically reduce our dependency on the middle-east almost overnight.
That would also free up the 1/3 of US crop production that goes to our own ethanol, and put it back to being used for food.
The corn used for ethanol production is not sweet corn used for human food consumption, it is field corn which is grown as an industrial commodity.

And the Dept. of Ag, says the US produced fully 50% of the world’s corn supply. Yet only 13% of that is used for human consumption as in corn chips, flour, breads etc. The vast majority of corn crops go to grow beef and other livestock.
Which suggests, if you want more corn chips – maybe cut down on the Fat Burgers. Or not.

October 26, 2009 4:08 pm


Josh (15:37:42) :
JamesG (13:55:31) :
Josh
I don’t know if you knew this or not but one of Henry Ford’s earlier cars ran on methanol made from hemp.
I did know Ford used hemp-derived fuel for his early cars. As I understand, the petroleum industry lobbied intensely and ran a smear campaign against biofuels in the early 20th Century

I’d be highly; I say HIGHLY surprised if either of you two (because at this point I’m not sure who posted what) could provide ANY supporting primary evidence or documentation on this …
.
.

October 26, 2009 4:12 pm


JamesG (13:50:12) :

If anyone does cost comparisons they shouldn’t forget to allow for the fact that the base load at night is mostly wasted energy. Electric cars charging can use up that previously unused energy which is hugely significant for comparing real costs. And yes, there is enough spare base load to change up everyones cars – it’s been studied.

Well, there ya go; we need a cite. (A link to an article or that ‘study’ as it were …)
.
.

Jack Barnes
October 26, 2009 4:23 pm

According to this quote from the Climate Chief, we have to give up Steaks now, to save the world… This green movement is going to run smack into BBQ crowd, and get eaten if you ask me… here is the quote.
“…People will need to turn vegetarian if the world is to conquer climate change, according to a leading authority on global warming.
In an interview with The Times, Lord Stern of Brentford said: “Meat is a wasteful use of water and creates a lot of greenhouse gases. It puts enormous pressure on the world’s resources. A vegetarian diet is better.”
Direct emissions of methane from cows and pigs is a significant source of greenhouse gases. Methane is 23 times more powerful than carbon dioxide as a global warming gas….”
http://www.timesonline.co.uk/tol/news/environment/article6891362.ece

Kevin Kilty
October 26, 2009 4:23 pm

_Jim (10:57:33) :
Government has often had a hand in jump–starting a new -industry—both the computer chip and …
I would remind our writer at Newsweak that TI holds the patent for the microcircuit and an early calculator (arguably a computer of sorts) and it was _not_ the product of a government ‘jump start’ grant.

In fact, since TI was a spin-off of SSC, Seismograph Services Corp., perhaps the oil industry jump-started the microchip. Maybe profits generated in one industry jump start others!
Just a thought….

October 26, 2009 4:36 pm

Climate chief Lord Stern: give up meat to save the planet
http://www.timesonline.co.uk/tol/news/environment/article6891362.ece

George E. Smith
October 26, 2009 4:36 pm

Asf ar as I am concerned, both of these “automobile” deals are giant scams on the American Taxpayer. Talk about corporate welfare; these two scams take the cake; and I can’t decide which of the two is worse; they are both impractical pipe dreams of people who have more political clout, than common sense.
If either of them believed in their product concept; they should be able to sell it to astute investors. The fact that they are unable to do that is testimony to the stupidity of both.
I once was a co-founder of a start-up high tech company in Si-valley. Our initial business plan called for $750,000 of initial funding. Venture capitalists wanted to give us $1meg, so we could get going faster; and they only wanted 80% of the company stock for their $meg, leaving the eight founders, family and friends with 20%. We said thanks; but no thanks; so we cut the budget in half and reached into our own pockets, along with family and close friends. Our little startup on $375K opened on April 1 1970, and we shipped $80,000 in product starting with a $10 shipment in early July 1970.
Our first full year; 1971 we shipped $1.4 meg, followed by $14meg, and $26 meg in 1972, and 73. Around then we finally let some venture capital into our thing. Before we were finished, our little venture was the largest (shipping dollars) LED company in the world. We eventually sold it off to a giant conglomerate; after suffering some reverses due in part to lousy advice and guidance from some of our outside directors; who were supposed to be astute business people. But yes we did make the critical choices based on their lousy guidance; that prevented it from becoming one of the big success stories.
I get a little furious; when I see some scam artist con the US tax payers out of a half billion dollars to fund their pipedream play things. But it does point the interested student as to why Si-valley is full of people with their hands out for other people’s money; and they aare not against fleecing the taxpayer.
The goose that laid the golden eggs, was killed off years ago; and the cockroaches now feed on its carcass.

Kum Dollison
October 26, 2009 4:37 pm

Agree with everything Hotrod said.
BTW, about that “Cheap” Brazilian Ethanol. It’s selling at the Port (Brazilian) for $3.25 Gallon.
Corn Ethanol, on the other hand, was selling on the CBOT, today, for $1.97 Gallon. That’s Without any subsidies to farmers, or blenders.
A gallon of ethanol will take my flexfuel Impala about 20 miles. It has embedded in it about 35,000 btus of fossil fuels. It, also, did not require 200,000 Young Americans to go to foreign lands and put their lives on the line. It did not require the 5th Fleet to be stationed at the Port of New Orleans, nor sending money to foreign despots who would just turn around and give some of it to terrorists bent on killing my family.
BTW, Mexico is way down the list of suppliers, now. Their production is plunging so rapidly, that many people think they will no longer be exporting petroleum in 2 years. We are getting a lot of oil from Russia, now, though.

George E. Smith
October 26, 2009 4:54 pm

Well actually, what Jack Kilby got his patent for was hardly an integrated circuit; but call it microcircuit if you will; an assemblage of transistors in wafer form that hadn’t been broken up, and were externally soldered together with little jumper wires.
It was Bob Noyce at Fairchild; who actually formed all of the circuitry directly on the Si wafer; using the “planar” process that was the invention of Jean Hoerni; another one of the Fairchild fabulous seven, that included Gordon Moore of Moores’s law.
Both Noyce and Kilby are credited with “inventing” the IC; but only Kilby got a Nobel for it since Nobel prizes are not awarded posthumously.
Of course most of the fabulous seven, and some other Fairchild greats eventually jumped ship and founded Intel in 1969.
I worked at Fairchild for Victor Grinich, who was the only EE among the fabulous seven, that really got Silicon Valley off and running. (well Hp and Varian got other aspects of it rolling); but it is to the Fairchild seven; who were basically turned out by William Shockley; who told them if they thought their silly planar process was a great way to make a transistor; they should go out and try it themselves; They did !
As to the Micro-Processor which also bears Kilby’s name, along with someone at Intel; there was a guy by the name of Gary Boone, who worked at TI and had more than a lot of input tot he design of the first real microprocessor and has patents to prove it. I actually hired him into our LED company, where he designed an even more revolutionary programmable microproceesor chip that we used to make hand held calculators.
But bottom line is that government subsidies had essentially nothing to do with all that great innovation; it was very bright scientists and engineers, and a lot of entrepeneurial spirit.

Britannic no-see-um
October 26, 2009 4:56 pm

Glad I still have my 53 Morris with original A series OHV 805cc. Might even take the head off for the first time one of these years and give it a decoke.

hotrod
October 26, 2009 4:57 pm

Climate Heretic (14:59:19) :
Hotrod said
“If all direct and indirect subsidies to oil …”
I would ask what subsidies in particular are being referred to?

There are a host of hidden subsidies to oil, the classic example is the blenders tax credit I mentioned above, that subsidy is usually pointed to as a subsidy to ethanol but in reality it usually goes in the pocket of the oil refinery for the privilege of using a high octane blending agent they did not produce which allows them to blend in lower octane gasoline fractions they normally could not use without further processing because they would not meet minimum gasoline standards.
The other big one is of course the indirect defense costs our Military expends to protect access to off shore suppliers. It is not a simple answer, unfortunately the web page that I found which neatly summarized some of those costs is now a dead link so I will have to dig that info up again.

Roger Sowell (15:11:16) :
hotrod,
ARB’s website for bio-ethanol is shown below. Scroll down to see the Staff Report and Appendices.

Thanks I will take a look at them!
Larry

October 26, 2009 5:07 pm

I’m a big fan of renewable energy, but what I can’t understand is the need for such huge subsidies. The reason I’m a big fan is because the feedstocks are free (which means income can be focused on amortizing capital costs), and it keeps the sellers of other forms of energy honest.
We are going to need massive amounts of cheap energy if we are going to solve the major issues we face, population growth, pollution, poverty, and progress as a whole as well.
I don’t foresee us ever going over to 100% creation of energy from renewables, but they have their place.
Wind has gone from ~50c per KW/hr to ~5c per KW/Hr over the last 30 years, Geothermal almost the same in 12 years, and most of the technological improvements to come will likely favour renewables in terms of making energy cheaper.
The major stumbling blocks to more renewables is cheap storage and planning permits. Cheap storage has an advantage that will pay for itself in the long run, that being never having another brown or blackout, and the seperation of the need for energy from the production of it, which should lead to a downward homogenisation of the price paid for electricity, so even if there were no renewables, it is a desirable outcome to aim for.
If we could get Lithium-Air batteries or a hybrid of a nuclear battery with coventional tech that doesn’t scare us out of our wits, then battery powered cars become a reality.
It’s going to need a lot of money, but if we refocused the money we’re wasting on subsidies and all the climate change shenanigans ($100bn a year globally?), then it’s doable.

George E. Smith
October 26, 2009 5:21 pm

“”” hotrod (13:53:18) :
Roger Sowell (13:17:54) :
Larry, (hotrod), ethanol from corn is a net energy consumer – not producer. California’s Air Resources Board and federal EPA both concur.
Care to site the sources?
There is just as much bogus science in the net energy calculations of biofuels as there are in the global warming debate. In many cases they are not counting co-products and including energy expenditures for infrastructure that they ignore when calculating net energy yield for petroleum. Pimentel is the Michael Mann of the green energy studies. He is the only researcher that consistently finds negative values and continues to turn out crap studies based on out of date research and flawed accounting and assumptions.
Current technology ethanol from corn has a positive energy balance with proper accounting methods.
http://www.usda.gov/oce/reports/energy/aer-814.pdf
Larry “””
Well Larry, there are good tests of your thesis. If you recall, we actually started with nothing but free renewable clean green energy; spending most of our waking hours clambering around in fig trees to gather the green renewable (solar) energy.
Then we realized that the little monkeys were a lot more adept than we were and could get out to the ends of the smaller branches where the really good fruit was. So we let the monkeys gather the figs, and then we killed their little A**** and ate them; much more efficient way to get energy. We noticed that a lot of critters on the ground got a hell of a lot bigger than us, by eating cellulosic solar energy; AKA grass; which we couldn’t process.
So we got down out of the trees and figured out how to kill the bigger grass eaters; which essentially allowed us to eat grass too.
But it wasn’t until we tamed fire, and discovered stored chemical energy; that our numbers started growing exponentially to today’s 6+ billions.
But what you have to keep in mind is that this whole system was built by bootstrapping itself from its own energy outputs. There was no government subsidy generated from other energy sources; because there were no other energy sources, than the ones we exploited.
So we already know that the present energy system exists, and grew itself without inflationary input from some non-earthly subsidy.
So to prove that your free green renewable clean alternative energies are also energy positive; I suggest a pilot program to exploit your favorite candidate; using absolutely no carbon bearing fossil fuel or other polluting energy inputs. That means every single thing and person involved in the enterprise, and their families have to be supported and fuelled, from the OUTPUTs of your favorite clean green free renewable alternative energy; without any subsidies from the system that bootstrapped itself to success.
Onl;y if you can do that and end up with salable energy left over after running your sytem; will you be able to claim that you did the accounting properly, and that there really is a net gain in available energy supplies.
The sun spend 4+ billion years transporting solar energy to be stored on earth for our use. If you think that the present shipment rate from the sun is fast enough for our needs; then have at it, and prove it can run itself from its own energy output.
The latest SciAM magazine, has a paper promotoing a scheme to provide 100% of ALL of the entire world’s energy need in all forms for all uses from free clean green renewable alternative energy sources (solar). They say it would use about 1% of the entire earth surface to gather that much energy from the sun. I believe that that 1% figure is about the same as the total amount of the earth surface, that humans have so far adapted for all of their existence, and all of their endeavors.
Oh and they are going to do this by 2030, using only technology that already exists; so that should be a perfect demonstration of a renewable self bootstrapping replacement for our usage of the sun’s 4.5 billion years of energy shipments to planet earth.
Have at it; if you want to try your hand at something useful.

October 26, 2009 5:32 pm

Scott, thanks for the link:
Amazing Pictures, Pollution in China
http://www.chinahush.com/2009/10/21/amazing-pictures-pollution-in-china/
Anybody who thinks China is going to give a [snip] about carbon dioxide,
please raise your hand.

hotrod
October 26, 2009 5:32 pm

Here is a easy to understand flow chart of the energy inputs based on research done by Argonne National Laboratories in about 1995.
As you can see they computed it took an input of 1.23 million BTU of fossil fuel to deliver 1 million BTU to the consumers fuel tank as gasoline, and it took an input of only 0.74 million BTU to deliver the same fuel energy as fuel ethanol to the consumer.
Only about 17% of that energy input is in the form of petroleum based energy, the majority is from natural gas, electric and coal. Ethanol provides a gateway to convert difficult to use power like coal to a transportation fuel.
The hidden clinker in many studies that show ethanol as a negative energy balance fuel is to include obsolete data like 1960’s vintage crop yields, conversion efficiencies, and fertilizer uses, or to quietly slip the solar energy captured in the ethanol as one of the energy inputs, as if you had to pay for that energy twice once to create the farming environment to grow the fuel and then again as if it was a direct energy input to the ethanol production process.
Note that both of them include the output of co-products.
http://www.ethanolmt.org/images/argonnestudy.pdf
The gasoline energy cost of .74 out for 1.00 in, has not changed much but ethanol has improved substantially since the mid 1990’s as efforts are made to reduce energy inputs, through heat recovery, using the DDGS wet so no drying energy is required, and burning corn waste in the plant. Some plants are able to generate surplus electricity which they sell back to the grid, or use co-generation such as bio-gas from cow manure to free them from natural gas energy inputs.
Larry

Alvin
October 26, 2009 5:32 pm

Josh posted at (12:02:26) :
Why has Cannabis Hemp been ignored as a biofuel?

Dude, give it a rest.

October 26, 2009 5:35 pm

Off topic: Are you kidding me, “Climate chief Lord Stern: give up meat to save the planet”
This is insane, but goes to show how far AGW proponents are willing to go in controlling people’s behavior.
It’s a recipe for “soilent green” results where the rich eat steak and the middle class and those below don’t even eat hamburger (Al Bore will definitely continue eating meat).
As the article reports: “People will need to consider turning vegetarian if the world is to conquer climate change, according to a leading authority on global warming.”
“In an interview with The Times, Lord Stern of Brentford said: ‘Meat is a wasteful use of water and creates a lot of greenhouse gases. It puts enormous pressure on the world’s resources. A vegetarian diet is better.'”
http://www.timesonline.co.uk/tol/news/environment/article6891362.ece#
From my cold dead hand will you pry my corn fed prime rib steak.
The lunacy seems to be unending.
But this passes the limit — Man-made global warmers are teaming up with PETA.
This claim likely will be the one that turns the stomach of Joe Six-pack against this steaming pile of garbage.
As if the attempt to set up “one world government” with taxing, redistributing of wealth, and enforcement power was bad enough, this Copenhagen treaty has in it, as Lord Mockton (not all Lords are bad) has pointed out.
“No meat”, say’s my Lord.
Answer: Go to hell you SOB!!

JimB
October 26, 2009 5:42 pm

“Kum Dollison:
Corn Ethanol, on the other hand, was selling on the CBOT, today, for $1.97 Gallon. That’s Without any subsidies to farmers, or blenders.”
No subsidies?…since when?

Corn ethanol subsidies totaled $7.0 billion in 2006 for 4.9 billion gallons of ethanol. That’s $1.45 per gallon of ethanol (and $2.21 per gal of gas replaced).
Where did those subsidies come from:
1. 51¢ per gallon federal blenders credit for $2.5 billion = your tax dollars.
2. $0.9 billion in corn subsidies for ethanol corn = your tax dollars.
3. $3.6 billion extra paid at the pump.”
http://zfacts.com/p/63.html
That was the first of many hits on Google…
JimB

GP
October 26, 2009 5:48 pm

One thing that has always puzzled me about the ‘New Green Jobs’ is what they are for. Or more specifically what do the taxpayers think they are for?
If they are ‘new’ in the sense of new to ‘green’ but shifted from somewhere else one has to assume that the people promoting the benefits of this as an economic strategy are being economical with their announced truth.
If those in authority actually think they are indeed new jobs AND that there will be a net increase in jobs due to the change to ‘green’ methods then what they are saying is either that the standard of living for the people in those jobs will fall compared to now so that the net costs are the same for the same energy output … or energy is going to cost a lot more. A whole lot more and for the entire consumable energy generation and distribution system. And that assums that demand remains stable.
If the planning is for increased demand with much lower carbon output then one can only assume that even more costs will accrue – which seems counter intuitive to the increase in demand on a per capita basis so perhaps it all hinges on migration.
Obama’s statement about the potential for coal fired power stations to be bankrupted out of business may have been intended to pursuade people that a like could be drawn and all would be well with prices once coal was eliminated whereas the reality seems to be somewhat different if all of the new ‘jobs’ are to be sustainable.
So if the retail cost of electricity quadruples and perhaps becomes an unreliable source, how much travelling will people undertake in their electric only cars ? Will the massive investment required in an infrastructure to service the anticipated demand ever be recovered?
Just think what the children and grandchildren are going to have to pay to keep warm and eat cooked food. For that reason alone I don’t understand why more people have not shouted out about the clear fiction implied in the ‘green jobs’ story. Perhaps the education system has been ‘improved’ more than we think.

Ron de Haan
October 26, 2009 5:53 pm

I am against any subsidies. Anthony is right. If an entrepreneur wants to make a business, he or she should do it without a Government Cushion of free money = taxpayers money.
Both car producers, Tesla and Fisker are building very expensive cars.
Not entirely correct because Tesla is also working on a more affordable family car but even at half the price of the Tesla Roadster, still is an expensive set of wheels.
Not many Americans can afford such vehicles.
Those who can afford one, don’t really need a subsidized product because they have sufficient cash!
So why this subsidy?
This looks like “Spreading the Wealth” in the wrong direction.
I think It has everything to do with the “Old Boys” Network of Algore .
These Old Boys meet at birthdays, charity parties and sit inns.
This has more to do with Big AL’s ego and less with Polar Bears, melting icecaps and rising sea levels because that’s something Al talks about a lot but he does not certainly does not believe a single word he says.
Always watch what people do and what they say.
It’s an indicator how dependable and trustworthy they are.
Or how stupid:
Some days ago I read about one of his “Green friends” who drives an electric car and bought a wind mill to charge his batteries.
Unfortunately there were two problems.
1. Charging time, it took him three days for a refill.
2. Lack of wind, for which he was warned by some of his friends.
In order to continue his farce he now charges his car via the grid.
His wind mill is now turning day and night, wind or no wind since he spins the bldes from the grid as well.

October 26, 2009 5:56 pm

Tax subsidies are market-inefficient Goreboggles, like pouring fertilizers on a concrete pavement while praying to Gaia for a bountiful crop of Goreblurries. When only some very expensive Goreweeds start growing, blame the problem on insufficient rain due to global Gorebaloney, root out those withered Goredenier Goreweeds, add more tax fertilizer, and pray for a Goremicle. When will taxpayers wise up to this Goreidocy, get Gorewise and dump the Goremats in the Gorewhitse and Gorecongross?

Ed Scott
October 26, 2009 6:33 pm

George E. Smith (16:54:39)
George, did you know Dave Baker, who split off from Fairchild and designed the Utilogic series for Signetics?

Kum Dollison
October 26, 2009 7:13 pm

JimB, I wonder what the first 10 hits would be if I “googled” Global Warming, or Climate Change?
The Blenders’ credit USED TO BE $0.51/gal. NOW it’s $0.46 gallon. That’s just to show you that you have to be careful what you pick up when you start “googling.”
Now, about that $1.97: Yes, that is BEFORE it’s blended, thus, before the Blenders’ credit is Applied. We used to provide Billions/Yr ($9 Billion in 2006, I think it was) in payments to farmers to subsidize overproduction. Now, we don’t pay any of those. The 0.9 was, I assume, “disaster” payments, etc.
Okay, that $1.97 was from unsubsidized corn, and had not been subsidized to the blender. That was a totally unsubsidized product being sold by an American Company on the open market. Now, here’s the neat part, the only reason ethanol is that high is because we have the latest corn harvest in history. We’re, quite possibly looking at $1.70 Ethanol in three or four weeks. Which is quite competitive with $2.05 unleaded at wholesale.
As for price at the pump, The Univ of Iowa published a study last year that estimated the presence of ethanol in the marketplace saved Americans approx. $0.35 Gallon at the Pump.

Kum Dollison
October 26, 2009 7:17 pm

Oops, it was Iowa State. Here’s the study:
http://www.card.iastate.edu/publications/DBS/PDFFiles/08wp467.pdf

October 26, 2009 7:25 pm

hotrod,
“There are a host of hidden subsidies to oil, . . .
The other big one is of course the indirect defense costs”

Would you also be willing to mention the NOT hidden direct costs to oil companies, the billions upon billions of dollars forced upon them to comply with burdensome regulations? Lead phase-out, sulfur elimination, SOx and NOx reduction, PM10 reduction, benzene reduction, oxygenate additions, vapor pressure adjustments, just to mention a few. Also increased octane requirements over the years?
And where are the so-called benefits to the oil companies of receiving the “hidden subsidies?” Their profitability is nothing spectacular – in fact, it is quite ordinary. If one really wanted to enter a highly profitable business, go into making and selling liquor.
Oh wait. That is what you are advocating! Ethanol.

October 26, 2009 7:33 pm

George E. Smith (17:21:38) :
Well said, sir, well said. You understand thermodynamics.
Oil refineries have been entirely self-sufficient in energy for decades, with many of them also generating all their own electric power – no connection to the grid. And they had and still have plenty of product to sell, at very low prices, for a satisfactory return on investment.
Let’s see any ethanol plant do THAT.

Kum Dollison
October 26, 2009 7:34 pm

George E. Smith,
As for your proposition: It would be very easy to run the whole operation w/o outside energy. But it wouldn’t make sense. Let me explain. For every gallon of ethanol you get about 6 lbs of distillers grains. Distillers grains contain about 8,400 btus/lb. You could burn 70% of the distillers grains and provide enough energy to fuel the entire process. Farming, producing the fertilizer, and distilling the alcohol.
However, the distillers grains are much more valuable than nat gas. It would be silly. That being said, many refineries are getting away from fossil fuels, and going to ag waste (corn cobs,) wood waste, municipal solid waste, landfill gas, etc. Google Chippewa Valley Ethanol, Corn Plus, Poet – to name a few.
Oh, the really neat news on “Bluefire Ethanol.” California drug their feet, and made them jump through so many hoops that they are doing their second refinery in Fulton, Ms instead of California. Yea, California.

Kum Dollison
October 26, 2009 7:41 pm

Oh, oil refineries don’t use natural gas? Well, I learned something, today.
Some outfit (pretty well-known outfit, it seems) traced back all of the direct subsidies in the last decade. It seems the oil companies received about $79 Billion (mostly for projects out of the country,) while the biofuels companies got something less than $25 Billion.

October 26, 2009 7:50 pm


Kevin Kilty (16:23:51) :
In fact, since TI was a spin-off of SSC, Seismograph Services Corp., perhaps the oil industry jump-started the microchip.

Then are in full agreement that ‘government’ (ala Algore and ‘directed invention of the internet’) has little to do with the assertions of the Newsweak writer re: ‘the computer chip’ (sic)?
His words, after all, were: “Government has often had a hand in jump–starting a new -industry—both the computer chip and …”
I think we can now conclude this is patently false.
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Roger Knights
October 26, 2009 8:00 pm

“Did you know that “Amazing Grace” was written
by a slave trader?”

After he was born again and abandoned his trade.

October 26, 2009 8:28 pm


George E. Smith (16:54:39) :
Well actually, what Jack Kilby got his patent for was hardly an integrated circuit; but call it microcircuit if you will; an assemblage of transistors in wafer form that hadn’t been broken up, and were externally soldered together with little jumper wires.
It was Bob Noyce at Fairchild; who actually formed all of the circuitry directly on the Si wafer; using the “planar” process that was the invention of Jean Hoerni; another one of the Fairchild fabulous seven, that included Gordon Moore of Moores’s law.
Both Noyce and Kilby are credited with “inventing” the IC; but only Kilby got a Nobel for it since Nobel prizes are not awarded posthumously.

You are aware that TI and Fairchild cross-licensed their inventions?
I thought so …
And, there is more to Kilby’s integrated circuit patent ‘than an assemblage of transistors in wafer form that hadn’t been broken up’ (a process called ‘dicing’, George), in fact, Kilby’s patent shows that bias and load resistors were ‘fabricated’ in the substrate; this is hardly “an assemblage of transistors” but rather would qualify was monolithic IC technology.
Reference: http://www-inst.eecs.berkeley.edu/~ee40/su04/publications/3138743.pdf
THEN there is the process itself … also described in the patent; no small feat in itself CONSIDERING the slightest impurities (from processing agents, washes, etchants etc) can render active area of the semiconductor wafer/crystal inert!!!!
You also might have missed the fact Kilby is listed on TI’s “Cal-Tech” calculator patent developed in the 60’s. This was quite an accomplishment in that day and age. This calculator was introduced by Canon in April of 1970 and sold in Japan for $395. In February of 1971, Canon introduced the “Pocketronic” in the USA with a retail price of $345.
Copy of patent for TI “Cal-Tech” calculator (1st prototype circa 1967):
http://www.spingal.plus.com/micro/3819921.pdf
BTW, why are you quibbling with me when your beef should be (FMP) with the Newsweak writer on subjects much bigger?
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Roger Knights
October 26, 2009 8:36 pm

Brazil drivers ditch biofuel where prices rising
Reuters, Wednesday October 21 2009 by Peter Murphy
SAO PAULO, Oct 21 (Reuters) – Some Brazilian motorists who fuel their cars solely on cane-based ethanol are switching back to gasoline as high sugar prices now make the biofuel more costly in some states.
Brazil is a pioneer in biofuel with its millions of flex-fuel cars that can run solely on ethanol or gasoline, or any mixture of both. Usually cheaper than gasoline, drivers needed no persuasion to switch when flex-fuel arrived in 2003.
But as mills use cane to produce more sugar in response to a world deficit that pushed prices to near their highest in three decades, prices for ethanol, made using the same cane, have leapt up to 50 percent in places in just a few months.
“(Drivers) have gone back to gasoline,” said Paulo Mizutani, head of the sugar and ethanol division at Cosan, Brazil’s top producer of the products. He said demand for ethanol in the center-south region fell to about 1.6 billion liters a month from 2 billion liters earlier this year.
“It could be like this until March when a new (cane) harvest starts,” he said, speaking to reporters at Brazil’s Sugar Dinner Week, an industry event held every other year in the world’s top sugar grower.
Only in states with higher levels of sales tax, has ethanol become comparatively more expensive. Price data from National Petroleum Agency (ANP) showed that ethanol in southern states Minas Gerais and Santa Catarina were at or above the threshold of 70 percent of gasoline prices above which it is effectively more costly than gasoline.
In Sao Paulo, it was around 60 percent and about 67 percent in neighbouring Rio de Janeiro, meaning it still offered better value for the money. A liter of ethanol in Sao Paulo city costs about 1.50 in Brazilian reais, equivalent to US$3.26 per gallon.
Ethanol’s lower energy concentration means a tank of the biofuel will do around 70 percent of the miles a tank of gasoline would permit, though it gives engines added zip.
Brazil began mass producing ethanol-only cars in the 1970s in response to the oil crisis, but when sugar prices later spiked, motorists were lumbered with higher fuel costs. Flex-fuel gets around this by allowing the driver to choose.
“Ecologically sound is a nice idea but no one will pay for it,” Mizutani said.
He held out little hope that Brazilians, who already pay comparatively high taxes on goods and services, would shell out more for ethanol despite its environmental selling points.
“Your car goes quicker. It is clean and renewable energy and it is Brazilian. I think the consumers should not only look at the economic side but at these aspects too.”

http://www.guardian.co.uk/business/feedarticle/8766157

October 26, 2009 8:49 pm


Kum Dollison (19:41:05) :
Oh, oil refineries don’t use natural gas? Well, I learned something, today.
Some outfit (pretty well-known outfit, it seems) traced back all of the direct subsidies in the last decade. It seems the oil companies received about $79 Billion …

These figures seem to flow pretty authoratatively from your finger tips … got a cite or source for those numbers?
References to ‘some outfit’ in ‘the last decade’ is obdurate and obscurring, like you were hiding something …
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October 26, 2009 9:00 pm

Kum Dollison
Yes, some oil refineries use natural gas these days, but not all. And it is ok if you want to learn something today. For many decades, natural gas was flared and not collected and piped to anyone, anywhere. Heating oil was used in homes, industry and power plants. Refineries burned oil along with gas produced from their processing operations.
Some high-conversion refineries produce an excess of gas, so have no need to purchase natural gas. They typically install cogeneration plants to consume the excess gas, and sell electricity.
So yes, oil refineries for many decades were entirely self-sufficient for their energy supplies – fuel, steam, and electric power. If not for burdensome environmental regulations, they could easily be self-sufficient again by not purchasing natural gas.

Kum Dollison
October 26, 2009 9:17 pm

No, Jim, it was a reputable deal. I’m just tired, and can’t remember the name of the organization, and I didn’t bookmark it. Check back afterwhile. I’ll see if I can remember it up.

Kum Dollison
October 26, 2009 9:28 pm

Here it is.
http://www.eli.org/pressdetail.cfm?ID=205
It was $70.2 Billion for oil, and coal. Most of it oil, and most of that for foreign production tax credit. (bet you never heard of that one, eh?)
Compared to $16.8 B for ethanol.
It was the environmental law institute.

hotrod
October 26, 2009 10:23 pm

George E. Smith (17:21:38) :
So to prove that your free green renewable clean alternative energies are also energy positive; I suggest a pilot program to exploit your favorite candidate; using absolutely no carbon bearing fossil fuel or other polluting energy inputs. That means every single thing and person involved in the enterprise, and their families have to be supported and fuelled, from the OUTPUTs of your favorite clean green free renewable alternative energy; without any subsidies from the system that bootstrapped itself to success.

You are trying to fit me into your preconceived notion of a greenweenie. I am not, I do not want to go back to a stone age existence and never advocated such a position. I am advocating the intelligent use of a high quality fuel, and sensible accounting of its fuel characteristics, rather than a game to sell a propaganda campaign that it is an inferior fuel.
I merely mentioned that it is dishonest accounting to add energy harvested by the plants for free from the sun unless you also include the solar energy that grew the plants that died and became coal deposits, and petroleum.
The oil company did not pay a penny for all that chemical potential energy stored in the oil deposit, and the farmer did not pay for the sun that fell on his field, and the power company did not pay for the gravitational potential energy in the rain that collects in his hydroelectric reservoir.
All any of those three did, was create an infrastructure that allows them to utilize energy stored by processes independent of man.
The fuel alcohol industry was alive and well, and self supporting prior to WWI. Henry Fords Model A was multi-fuel and would run on just about any fuel you could get in the tank except kerosene (there were farm tractors that would run on that however).
The fuel alcohol industry did not fail because it was not viable, it was intentionallly crushed by the effects of government intervention (prohibition/taxation), and market manipulations by the growing oil industry.
In the 1800’s it was viable as a fuel industry with alcohol and blends of alcohol with other fuels. Alcohol and camphor blends cost 1/2 what lard oil did and 1/3 the price of whale oil which were the alternative illumination fuels of the day. In 1861 the government instituted a $2.08/gallon tax on alcohol regardless if was used for fuel or spirit, to help pay for the civil war. As a result this government intervention crushed a fuel alcohol industry that prior to the tax was producing over 25 million gallons a year (in the mid 1800’s) using the technology of the day.
In 1906 Teddy Roosevelt lifted taxes on industrial alcohol, so again farmers could convert their perishable food crop excesses to a product that had market value and would keep in storage. That allowed Ford to produce the early Model A’s as dual fuel vehicles as you could get alcohol in nearly any town or settlement you drove through. In 1906 the recovering alcohol industry was selling about 10 million gallons a year.
At about that time Rockefeller started pushing gasoline as a motor fuel — it was a waste product from his production of fuel oil and kerosene which he was able to sell very cheaply as it had no other commercial use. By WWI the fuel alcohol industry was back to support the energy needs of the war, producing some 50 million gallons of alcohol a year.
Rockefeller then destroyed the alcohol industry by pushing Prohibition, donating some $1.4 – $4 million dollars to the temperance movement (worth something like $50 million in today’s dollars) and buying up the distilleries at bargain basement prices prior to prohibition, eventually these hostile take over tactics destroyed the fuel alcohol industry.
From 1919 when prohibition was passed until 1933 ethanol production stopped.
During that time, gasoline had become the dominant motor fuel with a dedicated delivery structure. Autos were no longer dual fuel designs and the market essentially disappeared for alcohol as a fuel (although the U.S. Navy used high proof ethanol for its torpedoes).
As you can see your hypothetical experiment has already been done and fuel alcohol was economically viable without government intervention.
Today fuel ethanol from state of the art plants is comparable in cost to regular gasoline but has the fuel qualities of a premium high octane (105 octane in E85 blends) fuel. It is a bargain if used to its potential in properly designed engines (ie high compression or turbocharged) It can achieve fuel net energy per mile numbers better than gasoline even in conventional engines.

Would you also be willing to mention the NOT hidden direct costs to oil companies, the billions upon billions of dollars forced upon them to comply with burdensome regulations? Lead phase-out, sulfur elimination, SOx and NOx reduction, PM10 reduction, benzene reduction, oxygenate additions, vapor pressure adjustments, just to mention a few. Also increased octane requirements over the years?

Yes I agree the EPA sucks and most of its regulations are onerous, but ethanol has the same sort of pollution, vapor pressure and regulation issues to face. They have to meet fuel standards just like the gasoline producers and have to meet local emissions and environmental impact regulations for its plants.
Interestingly enough fuel ethanol blending is one way the oil producers meet low sulfur, and benzene limits as it contains essentially zero sulfur or benzene, if blended with a gasoline that is not quite in spec, it raises the fuel octane, reduces the sulfur content, and lowers combustion emissions.
By the way octane limits have decreased not increased in recent years. In 1967 the pump premium at the gas station I worked at was 103 octane, today you cannot buy over 91 octane at normal commercial outlets in Colorado as a DOT approved fuel unless you pay almost $6-$8 dollars a gallon for racing unleaded. In the early 1960’s and late 1950’s octane requirements increased but it was due to the high compression ratios used in the engines of that period that forced the improvement in the fuel. The fuel of the day was comparable to our current regular gasoline at around 85 octane prior to the advent of the high compression engine.
It was not until the 1970’s and Carter’s efforts to encourage fuel on farms and other domestic production of fuel ethanol due to fuel shortages, that the industry had an opportunity to reform, as higher oil prices made it reasonably close in cost. It was widely used in the 1970’s to extend limited gasoline supplies due to the shortages caused by the oil embargo.
Fuel ethanol is an excellent fuel but has a few limitations, Gasoline is a pretty good fuel but has limitations, high ethanol blends with gasoline is spectacular fuel, allowing performance levels that cannot be achieved on conventional gasoline blends. Pure ethanol when used in optimized engines is capable of thermal efficiencies comparable to modern diesel engines (40% peak thermal efficiency has been achieved by MIT in a direct injection ethanol fueled engine).
We need both fuels to achieve energy independence and idiotic parochial quarrels that say gasoline only or alcohol only are missing the point. We need to use the best fuel blends we can come up with. High ethanol blends with gasoline are the cheapest, lowest emission, and highest octane (and performance) fuels we can economically produce. They allow very small displacement high performance engines to make stupid levels of power while running clean and cool.
They also have significant positive economic impacts on the U.S. Economy.
http://www.swri.edu/4org/d03/engres/spkeng/sprkign/pbeffimp.htm
http://web.mit.edu/newsoffice/2006/techtalk51-6.pdf
The sooner folks quit playing these silly us or them games the better off we all will be.
In terms of economics, it is much better for our economy to keep a large fraction of our transportation fuel energy production and the money it produces here in the country than sending it overseas. Ethanol producers return more tax revenue to the state and local government than is spent on these so called subsidies (which actually go to big oil not the ethanol producers in most cases).
http://waysandmeans.house.gov/hearings.asp?formmode=view&id=5797
http://www.ethanol.org/pdf/contentmgmt/Final2005IRFAeconimpactstudy.pdf
http://www.ethanol.org/pdf/contentmgmt/EconomicImpactofEthanolinSD.pdf
http://www.ethanol.org/pdf/contentmgmt/ethanol_and_the_local_community.pdf
Larry

LarryOldtimer
October 26, 2009 11:44 pm

What fuel(s) do the producers of ethanol use to distill the ethanol? Why, coal or natural gas, of course. Diesel for powering their farm equipment mostly.
Those skate boards with any sort of power train are nothing but death and maiming traps. Get a few more of them actually on our highways, and watch your car insurance jump sky-high. Whether you are fool enough to drive one or not.

Vincent
October 27, 2009 3:09 am

In order to ascertain the amount of greenhouse gas emissions (measured in kg CO2-eq) saved by ethanol production, we need to compare the life cycle of both ethanol and gasoline.
Step 1. The life cycle of gasoline production emits about 11.4kg CO2-eq per gallon of gasoline.
Step2. We calculate ethanol greenhouse contribution at the refinery stage. This depends on whether electricity is generated by coal or gas:
For gas, 2.88kg of CO2-eq are emitted for each gallon of gasoline displaced.
For coal, 5.12kg of CO2-eq are emitted for each gallon of gasoline displaced. Let’s take the average of 4 kg.
Step 3. We calculate the amount of greenhouse gases emitted at the agricultural stage. Assuming that corn will be planted after corn instead of after soyabean, then the release of nitrous oxide from fertilizer will release 4.8kg of CO2-eq per gallon of gasoline displaced.
So far then, for 11.4kg of CO2-eq emitted per gallon of gasoline we subtract 8.8kg emitted in the ethanol cycle, = 2.6kg of CO2-eq.
In other words, at the moment, we can save 2.64kg or 2.64 * 100/11.4 = 23%.
However!!! I emphasised that this is at the moment. But to increase domestic ethanol production greatly in the future, grasslands will have to be taken over by corn. The Chicago climate exchange assume that farmers who convert cropland to grassland will sequester 750 kg CO2-eq per acre per year.
If we reverse this then we need to factor in a debt of 5.3kg CO2-eq per gallon of gasoline displaced. The saving of 2.64kg becomes -2.66kg.
In other words, under this scenario, ethanol production would actually add more CO2-eq than saved. This needs to be borne in mind by all those who consider ethanol to be a magic bullet solution.

Kum Dollison
October 27, 2009 5:42 am

Vincent,
1) Most of us think that if all that were true it would be a feature, not a bug, and
2) Those numbers assume “deep plowing” (which is going away rapidly,) “Corn on Corn, instead of corn on beans, which is the norm, and corn on land that’s been in “Native” grasses for 15 years, or more, which is almost an impossibility. Also, most of these studies have ILUC in them, which basically posits that an acre of corn grown in the U.S. leads to an acre of Rain Forest Deforestation in Brazil which is absurd.

JamesG
October 27, 2009 6:01 am

_Jim
The DOE report is on the Pacific Northwest labs site http://www.pnl.gov. But here’s a summary so you don’t have to bother investigating or even reading too much:
http://green.autoblog.com/2006/12/14/electricity-grid-has-capacity-for-plug-in-hybrids/
“A new study for the Department of Energy has identified massive idle “off-peak” electricity production and transmission capacity in the existing electric power system. So much so in fact that it could power 84 percent of the 220 million vehicles in the U.S. if they were plug-in electric vehicles. The study, undertaken by researchers at DOE’s Pacific Northwest National Laboratory, is based on driving the 33 mile per day national average commute with drivers charging their vehicles up overnight.”
Regarding Henry Ford and hemp-based methanol, google is your friend. There are so many references it’s difficult to know which might suit you.

Vincent
October 27, 2009 6:34 am

Kum,
You can tweak the numbers any way you want, but the question I was posing parenthetically, was, is it worth it? But I could raise another question, is it even possible to achieve E80 blends as have been stated as a goal. Is there enough land available to grow that amount of corn, and what would be the effect on wildlife?
Somehow to me, the cure seems worse than the disease.

Richard M
October 27, 2009 6:45 am

i agree completely with Larry and Kum. Ethanol has gotten a bad rap. One might even think some of the funding for the FUD has come from big oil 😉
My opinion matches very, very closely with what Larry described so I won’t repeat it. I also support moving quickly to algae based bio-diesel and byproducts which would also reduce out dependence on foreign oil. Great way to capture and re-use CO2 as well by locating facilities near coal and NG power plants.
This has nothing to do with AGW and everything to do with making the energy market more competitive.

hotrod
October 27, 2009 7:31 am

LarryOldtimer (23:44:06) :
What fuel(s) do the producers of ethanol use to distill the ethanol? Why, coal or natural gas, of course. Diesel for powering their farm equipment mostly.

That is an assumption, but not a requirement. In a mature current technology fuel cycle there are other options.
Yes purely as a matter of economics many ethanol production plants get a large fraction of their process energy from electricity (coal @50%) or Natural gas as the infrastructure already exists. Some would say that is a good thing, as it is a convenient way to convert both coal and natural gas to a liquid transportation fuel so that the U.S. uses the fossil fuels it has in abundance for transportation fuels without having to build new industries to go coal to gasoline or natural gas to gasoline or build out a new infrastructure to use natural gas directly in vehicles that can only burn natural gas. (this assumes people are not concerned about CO2 which is the case of many on this blog).
However ! that is not an economic requirement. There is a whole new family of ethanol plants that are using other sources of process energy. There are plants under development that burn crop waste or wood chips and sawdust which otherwise would be a local waste stream, or other local fuels like municipal trash in fluidized bed boilers to generate their own steam and power. There are also plants under development that use methane produced by cow manure from adjacent feed lots to run biodigesters. The also sell the DDGS directly to that same feed lot with out drying, so you have two local industries setting up a symbiotic closed loop system where the waste product of the feed lot (manure) becomes an energy resource for both the ethanol plant and the feed lot, and the waste product of the ethanol plant (DDGS) becomes a food supplement for the cattle feeding operation. Excess DDGS can also be used as a soil ammendment by the growers of the ethanol feed stock. These plant designs can achieve near zero outside energy input, (in some cases they can sell excess electrical energy back into the grid, and use the grid as a fall back power source for peak power or temporary alternate power).
Likewise in a mature complex power system there is no legitimate reason that much of the farm energy now coming from diesel fuel could not be produced from bio-diesel, or ethanol fueled farm equipment.
The primary strength of ethanol production (from a net energy and energy self sufficiency point of view) is that it can be produced locally in almost any community, eliminating thousands of miles of product transport (fuel tankers, third world country oil production). The California report mentioned above includes the energy required to ship ethanol 1400 miles from the mid west in their calculations, when they can produce their own ethanol right in the state within a few miles of the point of use (every hear of Napa valley and the San Joaquin valley? ). This is the sort of dishonest energy accounting that blurs the picture of net energy return for people that do not look closely at the data.
Fuel ethanol is not a magic bullet but it certainly is a fuel as worthy of development as petroleum based transportation fuels. If combined intelligently with conventional petroleum fuels the combination is better than either by themselves.
Larry

George E. Smith
October 27, 2009 7:49 am

“”” Chris C. (12:29:31) :
The transcontinental railroads in the U.S. were indeed built with massive subsidies (free land for the railroad companies). However, the U.S. Government still owned the rest of the land, which was suddenly worth much, much more than before the railroad was built. Up until the end of the 19th century, the single largest source of revenue for the government was the sale of land.
I don’t see that sort of payoff for the taxpayers in the current “green” energy subsidies. “””
Now where on earth did you get the idea that the “government” somehow owned that land that was used by the railroad companies to build their railways. By what Constitutional authority would the US government be able to “sell” land it doesn’t even own. THE USA is a federation of 50 Sovereign States. I don’t see any authority for the feds to seize the land of sovereign states to sell to someone else.

George E. Smith
October 27, 2009 8:08 am

“”” hotrod (16:57:35) :
Climate Heretic (14:59:19) :
Hotrod said
“If all direct and indirect subsidies to oil …”
I would ask what subsidies in particular are being referred to?
There are a host of hidden subsidies to oil, the classic example is the blenders tax credit I mentioned above, that subsidy is usually pointed to as a subsidy to ethanol but in reality it usually goes in the pocket of the oil refinery for the privilege of using a high octane blending agent they did not produce which allows them to blend in lower octane gasoline fractions they normally could not use without further processing because they would not meet minimum gasoline standards.
The other big one is of course the indirect defense costs our Military expends to protect access to off shore suppliers. It is not a simple answer, unfortunately the web page that I found which neatly summarized some of those costs is now a dead link so I will have to dig that info up again. “””
Well the last time I checked on the US Constitution; the Defense of the United States was one of the two or three things that the Congress is authorised to lay and collect taxes to pay for; and providing for that defense is the very first thing the Congress is authorised to do out of a list of 17 things; and defense of the USA also means def3ense of interests of the USA, and its citizens and their interests. It was after all, Western world entrepeneurs who developed the oil resources in the middle east; not the dear folks who were sitting on it.

Ken S
October 27, 2009 8:15 am

JamesG (06:01:00) :
_Jim
The DOE report is on the Pacific Northwest labs site http://www.pnl.gov. But here’s a summary so you don’t have to bother investigating or even reading too much:
http://green.autoblog.com/2006/12/14/electricity-grid-has-capacity-for-plug-in-hybrids/
“A new study for the Department of Energy has identified massive idle “off-peak” electricity production and transmission capacity in the existing electric power system. So much so in fact that it could power 84 percent of the 220 million vehicles in the U.S. if they were plug-in electric vehicles. The study, undertaken by researchers at DOE’s Pacific Northwest National Laboratory, is based on driving the 33 mile per day national average commute with drivers charging their vehicles up overnight.”
JamesG, this is not what you said; you said it goes to waste! They are only talking about “unused capacity to generate”. When the demand is low (as at night) the power companies back off on produceing the power; fuel rods are adjusted in nuclear plants to produce less heat, less coal and gas is burnt in those plants and in hydro less water is fed to the turbines. What do you think? Do you assume that they produce many megawatts of unneeded power at night and that this unused power just goes into nowhere land? No, to produce this extra power requires an input of some type of energy, you never can get something for nothing as you infer.

wobble
October 27, 2009 8:26 am

“It was $70.2 Billion for oil, and coal. Most of it oil, and most of that for foreign production tax credit. (bet you never heard of that one, eh?)”
So the federal government allow US oil companies to compete internationally for business by NOT burdening them with production taxes on FOREIGN production and YOU call that a subsidy?
Try comparing apples to apples next time.

George E. Smith
October 27, 2009 8:44 am

“”” hotrod (22:23:30) :
George E. Smith (17:21:38) :
So to prove that your free green renewable clean alternative energies are also energy positive; I suggest a pilot program to exploit your favorite candidate; using absolutely no carbon bearing fossil fuel or other polluting energy inputs. That means every single thing and person involved in the enterprise, and their families have to be supported and fuelled, from the OUTPUTs of your favorite clean green free renewable alternative energy; without any subsidies from the system that bootstrapped itself to success.
You are trying to fit me into your preconceived notion of a greenweenie. I am not, I do not want to go back to a stone age existence and never advocated such a position. I am advocating the intelligent use of a high quality fuel, and sensible accounting of its fuel characteristics, rather than a game to sell a propaganda campaign that it is an inferior fuel.
I merely mentioned that it is dishonest accounting to add energy harvested by the plants for free from the sun unless you also include the solar energy that grew the plants that died and became coal deposits, and petroleum. “””
Hotrod, my comment was NOT directed at you personally; it was aimed at anyone who thinks he has an alternative energy solution to fossil fuels.
you had a lot of interesting information in your post; too much for me to address all of it in deatil.
I am interested in some aspect. This MIT high efficiency ethanol engine; does that efficiency figure include the Catalytic converters or whatever means MIT uses to reduce the emission of NOX from that engine to EPA mandated levels.
As for energy content; it is well known that the heat of combustion of any alcohol, is considerablky lower than that of the corresponding Alkyl hydrocarbon. In fact the heat of combustion of Ethanol is lower than that of Ethane, by about the same amount of energy you get from burning two atoms of Hydrogen to get H2O. I’m in total agreement that you can make more efficient IC engines by running the compression ratio up; which in turn raises the bearing loads on the engine; and greatly increases the burning of atmospheric nitrogen to form NOX.
Our California reformulated fuel now containing ethanol instead of MTBE, gives about 15% lower miles per gallon, that regular octane gasolines; as a result of replacing some of that ethane energy with useless water in the ethanol. And you get even less mileage with high octane Cal fuel, than with regular; largely due to the fact that the higher octane fuels are carbon rich; while the lower octane fuels are richer in hydrogen; which gives more combustion energy. Actually, you could (in principle) use a laser to heat the working fluid (air) in an engine; rather than a hydrocarbon fuel; and then you would have no carbon footprint; but that engine would still burn atmospheric nitrogen to make NOX
Major oil executives say the can (and they have) made ordinary gasolines that meet all of the California fuel emission standards; and containing NO mileage wasting water in the from of an oxygenated molecule like an alcohol or ether. Actually, the very old “water injection” technology from the 1940s and 50s, was a much better way to add water to a gasoline powered engine. The injected water, cooled the intake air, raising its density, which in turn raised the power output of the engine.
While very high compression engines do have higher thermal efficiency, than lower compression engines; they make a whole lot more NOX, and the bearing loads go way up compared to what you get with a lower compression supercharged engine (which unfortunately has lower thermal efficiency.
The standard American five bearing V-8 engine doesn’t have enough bearings to withstand the extreme bearing loads of very high compression ratios.
But if alcohol based solar energy is really as efficient as you claim; nothing that I say, will stop people from making their fortunes exploiting it; so more power to them. When fossil fuels are finally banned from the world; then we will find out how sustainable the alternatives are; well those of us that are left will.

hotrod
October 27, 2009 9:01 am

Now where on earth did you get the idea that the “government” somehow owned that land that was used by the railroad companies to build their railways. By what Constitutional authority would the US government be able to “sell” land it doesn’t even own. THE USA is a federation of 50 Sovereign States. I don’t see any authority for the feds to seize the land of sovereign states to sell to someone else.

http://www.coxrail.com/land-grants.htm
The first large land grants came about with the Pacific Railroad Act of 1862
see also land grant colleges and the township and range survey system. Most of the land in the western U.S. is still owned/administered by the Federal government, not by private owners.
Larry

Kum Dollison
October 27, 2009 10:09 am

No, Vincent, we can’t, nor should we even think about, supplying ALL of our transportation energy from “Corn.” It’s a BB, not a Bullet. But, it’s a danged good BB. We are pretty much held to 15 Billion Gallons of “Corn” ethanol/yr. That’s about 10% of our gasoline supply. We could, easily, move that up to 15%.
After that, we’ll be looking at “cellulosic” ethanol, batteries, biodiesel, maybe algal biodiesel, etc. Keep an eye on the Chevy Volt. That Serial battery, plug-in technology might be a true paradigm shift.
Look, we’re not going to “Run Out” of oil tomorrow. However, there are some really smart cookies that say oil is really going to get expensive within a couple of years. If they’re right we’re really, really, going to need a “Plan B.”
At present, the best thing we have going for us is that stuff that comprises 10% of the fuel in your gas tank “Right Now.”
And, your gas mileage has gone down by about 1.2 to 2.0% in California, depending on where you live; Not 15%. And, the ethanol in your tank is 1/2 of 1% water. Which, volume wise, is 1/2 of 1% of .10 or 0.0005.
The Brazilians run many of their cars off of 100% hydrous ethanol. We don’t sell hydrous for transportation fuel in the U.S.

October 27, 2009 11:21 am

hotrod,
California has a governor’s Executive Order that requires 40 percent of the fuel-ethanol to be produced in California, thus eliminating most of the transportation cost from the Mid-west.
Just one problem. No water. Corn requires LOTS of water.
Just another problem. Even if the water is obtained somehow, growing more corn in California, by necessity, displaces other crops. Thus, some type of food will not be produced as more corn is grown. Therefore, food prices will increase. Poor people will be disproportionally affected.
Natural gas vehicles are a far better solution than ethanol in the USA. No land required, no water required, and we have so much natural gas that the price is very cheap. More is discovered every day, from shale and tight sands. Food prices decrease, which is very good for the lower income segment of society.

hotrod
October 27, 2009 11:55 am

Just one problem. No water. Corn requires LOTS of water.
Just another problem. Even if the water is obtained somehow, growing more corn in California, by necessity, displaces other crops. Thus, some type of food will not be produced as more corn is grown. Therefore, food prices will increase. Poor people will be disproportionally affected.

They should have thought about that 30 years ago when it was obvious California was using more water than the Colorado river could provide. That is a self inflicted wound easily solved with desalination plants using both solar and nuclear energy.
That said, modern ethanol plants recycle large amounts of their water which is one of the reasons they are so much more efficient than they were just a few years ago.
Second who says the ethanol has to come from corn? The wine industry in Californian has product waste rich with ethanol, Coors beer produces something like 1.5 million gallons a year of fuel ethanol from its waste stream. The same can be done with waste streams from citrus fruit or other sugar and starch rich waste streams like bakery waste.
There are lots of other means to make ethanol, corn to ethanol is only viable in areas where there is already a large corn crop infrastructure like the midwest, and the soils and precipitation to support it. It would be idiotic to not tailor the local ethanol feed stocks to the local resources — like sea weed to ethanol perhaps, or algae to ethanol.
Let’s not put ourselves in a box here. France makes a lot of ethanol with sugar beets (which used to be a major sugar crop here in Colorado). Russian and Idaho will probably favor potatoes and potato waste products from the products they already produce.
Increased ethanol production does not necessarily require replacement of existing food crops.
http://www.technologyreview.com/business/23009/
You can make synthetic petroleum and ethanol from trash, or from crop residue like the left over clippings from mowing highway right of way, or as mentioned before using highly prolific plants like kudsu and plants like straw grass that will grow in crap soils that are not suitable for food crops.
Larry

hotrod
October 27, 2009 12:12 pm

Natural gas vehicles are a far better solution than ethanol in the USA. No land required, no water required, and we have so much natural gas that the price is very cheap.

That is just another sole source trap waiting to be sprung. Those vehicles can only run on that single fuel. If that natural gas is however converted to other fuel stocks that have wider application like gasoline or ethanol it can be stored and transported any where in the country very easy and you avoid all the risks associated with large LNG plants and transport like the Cleveland East Ohio Gas Explosion.
http://ech.cwru.edu/ech-cgi/article.pl?id=EOGCEAF
http://www.borderpowerplants.org/pdf_docs/01-24-04_LNG_SDUT.pdf
When I worked in emergency management LNG accidents were right at the top of the list for disasters that had the potential to level entire cities. A LNG tanker has an energy content similar to a moderate sized strategic missile nuclear warhead. Like BLEVE accidents on rail roads it represents a major hazard to entire communities. That risk will pose major problems for the development of a significant natural gas fueled transportation economy.
You also to produce a viable economy of transportation based on natural gas powered vehicles have to build out yet another fueling infrastructure, and build out a maintenance and production infrastructure for the specialty components that go into those fuel and engine control systems.
Natural gas powered vehicles do how ever make sense in restricted use vehicles like plant forklifts etc.
Larry

Indiana Bones
October 27, 2009 12:18 pm

Ron de Haan (17:53:32) :
Both car producers, Tesla and Fisker are building very expensive cars.
Not entirely correct because Tesla is also working on a more affordable family car but even at half the price of the Tesla Roadster, still is an expensive set of wheels.
Not many Americans can afford such vehicles.
Those who can afford one, don’t really need a subsidized product because they have sufficient cash! So why this subsidy?”

These are just the first EVs to market. More follow at far lower price points. One can ask why the subsidy for oil? Corn. Rural electrification? Telephone? Beef? The logical reason for taxpayer investment in the development of electric vehicles is simple:
Quit sending $700B annually overseas for foreign oil.

Indiana Bones
October 27, 2009 12:39 pm

Hotrod makes several good points. Natural gas is an excellent fuel for vertical applications like buses, heavy lifting and electric power plants. It also converts pretty well to other fuel stocks. And it is abundant domestically.
These guys are cracking forward with ethanol aimed at a target price of $1.00/gallon:
http://blogs.edmunds.com/greencaradvisor/2009/10/coskata-fires-up-cellulosic-ethanol-demonstration-plant-near-pittsburgh.html

October 27, 2009 1:18 pm

@indiana bones: USA does NOT send $700 Billion per year overseas for oil. That is a myth, and completely bogus. US imports approximately 60 percent of our oil, or roughly 9 million barrels per day. At current price of around $75 per barrel, that works out to only $250 billion per year. And much of that goes to friendly countries, e.g. Canada.
Besides, why are you so opposed to importing oil? Are you also opposed to importing automobiles? How about clothes? Electronic devices? Natural gas (from Canada)? Electric power (again from Canada)? Any special reason you single out imports of oil? Please explain.
It is well to consider that every barrel of imported oil leaves a barrel of US oil in the ground, where it can be used eventually when needed for a war – and that day will come. Most of the Navy’s ships burn oil, and the Army vehicles and Air Force planes burn gasoline, diesel, and military jet fuel – all derived from oil. (not overlooking the Naval aviators, nor the Marines – all are vital and all use some form of oil)
@hotrod: if any of those alternative sources you cite for ethanol are viable, let them step up and prove it. Potato peels and winery waste will hardly amount to sufficient volume to justify the effort. The water woes in California will not be solved by the methods you offer, as no nuclear power plants will ever be built here again – and with good reason. Desalination plants are being built, but the environmental delays require years. Plus your argument about recycling water in an ethanol plant misses the point – perhaps deliberately? Corn itself requires water for irrigation, and is not subject to recyling. That irrigation water is in very short supply in California, also other Western states.
Finally, corn itself is not a reliable feedstock – nor sugar beets – as recent events proved when a freeze ruined much of the sugar beet crop in the U.S.
http://sowellslawblog.blogspot.com/2009/09/mandatory-bio-fuels-very-bad-idea.html
Natural gas has a viable infrastructure already – pipelines crisscross the USA. Filling stations exist also. California has thousands of vehicles running on CNG or LNG, with more going on-road every day.
see http://energyguysmusings.blogspot.com/2009/08/natural-gas-pipelines-in-us.html
And your cite of an explosion in an LNG plant is very, very old. No LNG plants in the US have exploded. Yet, California refuses to allow an LNG import facility – it was built instead in Mexico on the Pacific coast.

Allan M
October 27, 2009 1:39 pm

paulhan (17:07:11) :
I’m a big fan of renewable energy, but what I can’t understand is the need for such huge subsidies. The reason I’m a big fan is because the feedstocks are free…
No they aren’t. You just haven’t identified the cost yet.
There is no such thing as a free lunch, or a working perpetual motion machine.

Allan M
October 27, 2009 1:42 pm

Indiana Bones (12:39:11) :
These guys are cracking forward with ethanol aimed at a target price of $1.00/gallon:
http://blogs.edmunds.com/greencaradvisor/2009/10/coskata-fires-up-cellulosic-ethanol-demonstration-plant-near-pittsburgh.html

Cellulosic ethanol has been on the edge of a breakthrough for decades now, and will be as long as the subsidies continue.

stumpy
October 27, 2009 11:37 pm

Just thought I would point out that the odd cars in the image are petrol powered, not electric and were developed in the 60’s. They have a 50cc moped engine and are light enough to pick up and move around – which you have to do as they have no reverse!

October 27, 2009 11:48 pm

I just returned from the BlueFire Ethanol presentation. A couple of general observations, and a more detailed comment later.
Their process is very complex, with many mechanical operations. The plant they are trying to build in Lancaster, California (near Los Angeles) is to consume 150 tonnes/day (bone-dry basis) of urban grass clippings and tree trimmings, and produce 4 million gallons per year denatured ethanol. This is a commercial demonstration plant, with full-scale plants designed to produce 55 million gallons per year. The plants will be energy self-sufficient by burning lignin to produce steam and electricity.
The capital cost is expected to be $400 to $550 million for a full-scale plant producing 55 million gallons per year.
They intend to build these all across the US, not just in California. Kum Dollison’s statement is erroneous in that regard.

beng
October 28, 2009 7:56 am

*******
Roger Sowell (13:18:46) :
Natural gas has a viable infrastructure already – pipelines crisscross the USA. Filling stations exist also. California has thousands of vehicles running on CNG or LNG, with more going on-road every day.
see http://energyguysmusings.blogspot.com/2009/08/natural-gas-pipelines-in-us.html

Agree w/this. LNG is IMO the best candidate for significantly supplimenting oil. A working infrastructure is important — for ex. I already use propane here for cooking w/a side benefit of warming the kitchen.
The US has alot of home-grown natural gas left compared to crude. Coal could be liquified too — a huge potential source.

Vincent
October 28, 2009 12:47 pm

Kum,
“After that, we’ll be looking at “cellulosic” ethanol”
Cellulose has an even lower energy density than corn, so I’d like to see how that works out.
” However, there are some really smart cookies that say oil is really going to get expensive within a couple of years.”
This peak oil prediction – that we’re going to reach peak oil production within 25 years – is a recurring theme that goes back to the early twentieth century and always seems to point to 25 years in the future.
In the former Soviet union, scientists believe oil is an abiotic process that occurs under the earth’s crust – and that is a consensus, over there, settled science really. And suppose they are right, what then?

Indiana Bones
October 28, 2009 12:59 pm

Roger:
I stand corrected. I had relied on T Boon Pickens’ widely advertised number which apparently includes costs of US military activity to secure foreign oil. His latest claim (and he’s clearly biased) is we have spent $475B in 2008 on foreign oil.
http://www.pickensplan.com/theplan/
While $475B annually is a happier number – both are and should be unacceptable to a struggling US economy. IF we have an abundance of natural gas and can build nuclear power plants, and can liquefy coal, and can convert waste to alcohols, and can develop “green” alternatives – WHY not keep more of that money at home?
I have no problem with imports of other stuff. We import tons of cars and clothes etc. Energy is a lot more important and IS a national security issue. Which is the reason why there are active tests ongoing of jet fuels produced from biomass, CTL, etc. The less reliance on foreign oil from hostile areas – the less reason to put men and women in harms way to stabilize/defend those areas.

Indiana Bones
October 28, 2009 1:36 pm

BTW, both Coskata and Range Fuels are a bit further along than Bluefire. They are admittedly fringy, early phase demonstration plants, but any movement in viable domestic fuel is welcome.
coskata.com
http://www.rangefuels.com/location-georgia.html

Kum Dollison
October 28, 2009 2:30 pm

No, Roger,
Kum Dollison’s statement was NOT erroneous.
http://www.dtnprogressivefarmer.com/dtnag/view/blog/getBlog.do?blogHandle=inothermedia&blogEntryId=8a82c0bc23f3b11601249cb223250830
They already had their DOE money all set to go in California for their second plant, but petitioned for, and was granted, the right to move the facility to Fulton, Ms.
Abiotic Oil? Really? I guess we’ll just go back down to Texas and “redrill” the East Texas Oil Field, eh? Great. Problem solved.

October 28, 2009 3:11 pm

Allan M (13:39:39) :
Re: renewable feedstocks being free,
“No they aren’t. You just haven’t identified the cost yet.
There is no such thing as a free lunch, or a working perpetual motion machine.”
I agree as to no perpetual motion machine, but some renewable feedstocks are not only free, they have a negative cost.
One example is green waste, typically grass clippings, hedge and tree branch trimmings, and leaves. These are collected, transported to a landfill, and charged a tipping fee for dumping. Such materials can be used as fuel in boilers (after dried out), or as cellulosic ethanol feedstock. The ethanol plant can charge the producer something less than the tipping fee, thus obtaining less-than-zero cost feed.
Another example is bio-waste from existing industry, especially sawdust or wood chips, also excess recycled newspaper.
The quantity available for conversion to ethanol or electric power is tiny compared to the total energy requirements. The only thing that makes these feasible is the zero or negative cost of the feed. That will change as more plants are built and plants compete for feedstock – thus raising the price.

October 28, 2009 3:54 pm

Kum, you may be correct about BlueFire Ethanol’s decision to build a plant in Fulton, but that is not what Mr. Cuzens told his audience last night.
Either way, I agree that California has passed the point of having overly-burdensome regulations for businesses. When businesses close and move to other states, thus creating unemployment in their previous location, regulations have gone too far.
In my view, if people’s health is at risk in one locale, they should do what people have done for centuries – move to another, healthier locale. That was the motivation for many people to move to California in the first place – a warm, dry Western climate without the health risks of the wet and cold East coast.

Joseph Siddall
October 29, 2009 2:59 pm

Peter Dunford (09:52:03) said :
Interesting photo choice, those little cars have two stroke petrol engines.
And he is correct, you can see exhaust smoke at rear of the yellow one. And they were built in 1964, (by Peel in the Isle of Man), so not actually relevant to anything in this thread. Come on guys, you can do better than this.