Interesting timing, especially when some biomass companies are switching from wood chips to corn, because they couldn’t turn a profit on wood chips. Looks like all the wheels are coming off the bus now.
To Survive, Some Biofuels Companies Give Up on Biofuels – Technology Review
Gevo, a prominent advanced-biofuels company that has received millions in U.S. government funding to develop fuels made from cellulosic sources such as grass and wood chips, is finding that it can’t use these materials if it hopes to survive. Instead, it’s going to use corn, a common source for conventional biofuels. What’s more, most of the product from its first facility will be used for chemicals rather than fuel.
As the difficulty of producing cellulosic biofuels cheaply becomes apparent, a growing number of advanced-biofuels companies are finding it necessary to take creative approaches to their business, even though that means abandoning some of their green credentials, at least temporarily, and focusing on markets that won’t have a major impact on oil imports. This is hardly the outcome the government hoped for when it announced cellulosic-biofuels mandates, R&D funding, and other incentives in recent years.
Here’s the story on the subsidy ending from the Detroit News:
Congress adjourned for the year on Friday, failing to extend the tax break that’s drawn a wide variety of critics on Capitol Hill, including Sens. Tom Coburn, R-Okla., and Dianne Feinstein, D-Calif. Critics also have included environmentalists, frozen food producers, ranchers and others.
The policies have helped shift millions of tons of corn from feedlots, dinner tables and other products into gas tanks.
Environmental group Friends of the Earth praised the move.
“The end of this giant subsidy for dirty corn ethanol is a win for taxpayers, the environment and people struggling to put food on their tables,” biofuels policy campaigner Michal Rosenoer said Friday.
Dirty Corn Ethanol? I’m all for ending taxpayer siphoning, but dirty corn ethanol?
Full story h/t to Lawrence Depenbush
Living, as I am, under the most transparent Government (my President told me, it would be so), why are the claims being made not shouted from the rooftops.
No Jobs involved ?.
Spell it out so dumb **cks like me can understand.
How many of the dreaded “millionaires and billionaires” stand to benefit, and how much money will be left to re-distribute after the contributions to various political campaigns has been subtracted.
Government mandates are slowly, softly, taking over the energy sector. What next ?
Kum Dollison says:
December 28, 2011 at 4:57 pm
E10 will, on average, if blended with 84 SubOctane gasoline give about a 3% loss of fuel economy. If blended with 87 Octane gasoline the reduction in mpg will be about 1.5 to 2%. In either case, it comes out pretty close to a “wash.”
The important thing is you’re greatly reducing the demand for gasoline. And, reducing the Price of gasoline. We paid a Historical World Record, $3.50 Gallon in 2011. What would we have paid if we would have taken that 2 Million barrels of Ethanol/Day off the market?
Exactly correct. Ethanol has lowered the overall cost of gasoline for years. And studies clearly show that impact is greater the better availability and distribution is in a region:
Economists at Iowa State University and the University of Wisconsin also recently looked at ethanol’s impact on oil refining and the downward pressure ethanol has exerted on wholesale gasoline prices. They concluded that “…from January 2000 to December 2010, the growth in ethanol production reduced wholesale gasoline prices by $0.25 per gallon on average.” Further, they found that, “Based on the 2010 data … the marginal impacts on gasoline prices are found to be substantially higher given the much higher ethanol production and crude oil prices. The average effect increases to $0.89/gallon…Separating the data for each Petroleum Administration for Defense District region shows that the Midwest region has received the greatest benefit from ethanol production. Last year, ethanol reduced gas prices there by $1.37 per gallon, according to the paper’s authors. Ethanol has had the least impact on gas prices on the East Coast. Ethanol production reduced prices in that region by 58 cents per gallon in 2010.”
http://www.card.iastate.edu/publications/dbs/pdffiles/11wp523.pdf
As I have observed before on this blog.
Whomsoever can turn cellulosic byproduct economically into fuel or food or plastics will indeed deserve the vast fortune they will make thereby.
This is not my original observation or words, it dates back to at least the 1920’s if not before.
And we are no further forward today.
For all government subsidy and stupidity. Ah well.
Kindest Regards
Some facts to clarify the claim that 1.6 BTU’s for every external BTU of energy input.
Technically it would be feasible to realize more energy output than the external energy input (that should include production energy from natural gas, electricity, oil, fertilizer, etc.) because there is energy in the corn crop.
However the calculations vary considerably depending on the assumptions that go into the model.
As one my wise relatives once said “figures don’t lie but liers do figure.
The basis for the 1.6 to 1 uses an assumption that is very controversial which I disagree with:
The assumption is that the energy input is apportioned according to the mass of the products. Since the ethanol is only a portion of the total mass of the products including waste, all the external energy input is not assigned to the ethanol product. The rational is that the waste can be burned or processed to also produce energy or something else which is a highly questionable assumption. Those who claim there is a net loss require that all the external energy input is assigned to the ethanol. This kind of economics would bankrupt any real company. The EPA realizes this, ergo ethanol from corn is not highly valued versus ethanol from sugar cane. What wisdom one of my elders had without a Phd degree!!
Of course the only way to resolve the issue is to remove all subsidies and let the market decide. The pro ethanol folks know that ethanol cannot survive this test.
Re correction on subsidies for oil, the depletion allowance mentioned is allowed for all such activities such as mining where the property purchased or leased looses value as the assets are depleted. That is in the tax code, not a subsidy. This is normal business practice. There is one major exception to this, large oil companies are denied this deletion allowance while small oil exploration companies are still allowed this allowance.
Another citem claimed in the subsidies to “big oil”is the home heating oil subsidies given to the “poor”.
No rational person would claim that this is an oil subsidy, but then it reveals the lack of real subsidies to cite.
The other subsidies included in the outrageous claims are actual drilling expenses, etc that applies to all businesses.
GregO says:
December 28, 2011 at 5:31 pm
A. Scott says:
December 28, 2011 at 4:08 pm
“I started working on detailed responses to the several people with legitimate honest questions…”
Lots of interesting and detailed discussion of Ethanol since my original question for you: “Can you make a cogent argument for public funding of Ethanol development?”
I had previously and perhaps tersely compared it to funding for my small manufacturing company; why is Ethanol development funded and I can’t even get an SBA loan? Perhaps a bad analogy.
Here’s some food for thought – if public funding of Ethanol development is a good idea, then why does our current government dither on approving the Keystone pipeline if the argument for public funding of Ethanol is to assure domestic energy supply. Canada seems like a good bet to me.
Maybe another bad comparison – I’m reaching for an answer to my original question and I take it that the original motivation for this thread is noting that public funding for Ethanol production is being curtailed by the ending of the farm subsidy for Ethanol. Why was it ever subsidized? I’m sure our elected representatives had something in mind and citing “pork-barrel politics” will not answer the question even if it had something to do with it. Somewhere, somehow, at sometime in the public sphere, subsidies seemed like a good idea, with some goal in mind, to somehow cure some (terrible) ill. What made funding ethanol production with public funds a good idea – despite how it has or has not worked out. Just exactly what problem were we trying to solve?
As far as WUWT as a blog, I read on another blog here recently where WUWT was referred to as the “Wolfpack at WUWT”. I cracked up. Really – the Wolfpack? How funny.
Relax. It’s just a fun blog. I have learned a lot here, learned a lot from your original post, and have learned a lot from these comments.
Have fun, and I look forward to your answer.
Greg – While the “Wolfpack” here can be exceeding critical when it comes to AGW – its is largely based on examining the science. When it comes to this topic some people become ignorant snobs and worse, just plain silly fools – ignoring all science, making up ridiculous claims out of thin air and attacking those they disagree with personally. That is a significant difference. They simply do not care about the science – they have made up their minds.
To answer your question suggest you read the Wiki entry for Brazilian Ethanol – it shows very well the effort required to build and grow a fledgling product into a sustainable fuel source – which they have succeeded at – although taking 40 years to do so.
Ethanol here needs the same early support. It first needs users – hence the flex fuel vehicles and the subsequent mandate on use. It needs production – both feed stock and processing, hence support for planting and processing plants. Perhaps the most important issue is it needs availability – distribution. Which is perfectly proven by the comment I made above showing that the impact on reducing gas prices was highest in the areas (Minnesota) with the best developed distribution and availability
Subsidies have accomplished exactly what they intended – support to grow the industry to sufficient mass and momentum that it is sustainable. Exactly as has occurred in Brazil.
Everyone assumed the subsidies would be phased out. Which is what should happen – emphasis on phased out. There should have been specific goals established by region – production and distribution goals – that when met trigger ending of subsidies. Even supporters of the bill realized this and wanted funds preserved to build out distribution in areas not already served.
I am in Minnesota – one of the most built out regions – and one benefiting best from ethanol. Yet I still only find E85 at isolated stations, a small fraction of all stations in the area. I would use more E85 – I actually go out of my way to buy it because I save money when I do – if there were more availability. Most areas of country have almost no distribution – and in those there is little benefit to costs and as such people do not use it. .
Ok….let’s get real for a change about Ethanol:
1. We grow the corn, this creates economic activeity in the USA
2. We sell distillers grain, which is a by product of making ethanol. The distillers grain is a very high value feed for livestock, dairy, etc.
3. WE don’t need to “protect” anything when produceing ethanol. Home grown.
4. The benifit of ethanol is lower gasoline prices.
This is just a few named items. Please research the topic before you think it is so bad.
Lets make this real simple for the people who want Ethanol in their gas tanks. When the alcohol evaporates and leaves water behind, guess what? Water causes corrosion in the fuel systems. Water in the fuel system also has a bad habit of freezing. Fuel systems will need to be built of stainless or similar alloys. Try getting fuel to your engine with frozen fuel lines. Older model vehicles will have corrosion problems and not run properly, gee that makes dirty air hmm? None of the motorcyles in production now are built to run on E85. Motorcycles are the most fuel efficent transport we have. So are you supporters of E85 driving new vehicles? No? Well your screwed too. Not everyone can run out and buy a new/newer vehicle.
Pull your heads out of sand before its too late. When vehicles are leaking fuel in your garage because of corroded fuel tanks/fuel lines. You can warm your family as the house burns down.
eyesonu says:
December 28, 2011 at 5:45 pm
Hotrod, do you understand the relationship that involves the engine control unit (computer), ignition timing, fuel / air mixture, knock sensor, and other sensors in an automobile engine?
You have called in all the reinforcing trolls here as you have done in the past elsewhere. Seen it before, same game, different thread.
More of your ignorance and unsupported mindless, attack.
You have just pointed out all the reasons vehicles with engine management systems onboard are largely unaffected – and even helped – when using ethanol fuels. Just as the system adjusts for higher altitude when you drive into the mountains it also adjusts for and takes advantage of the higher octane in ethanol fuels.
You should learn the first rule of holes … when in one, stop digging.
philincalifornia says:
December 28, 2011 at 5:58 pm
A. Scott says:
December 28, 2011 at 4:50 pm
Regarding ethanol, there have been numerous studies from reputable scientists, institutions and agencies, that clearly show the net energy balance of ethanol production is positive.
================================================
I am so pi$$ed off about this. I know somewhere on my computer is a single and wonderful powerpoint slide with all the studies (about 10 or 15 of them) showing exactly what you say, and temporally this shows huge improvements. Hopefully I’ll find it soon, especially as it shows the Pimentel work to be the clownish crap that it is.
This science (biofuels/chemicals) is not an exercise in English language usage to which the CAGW science/propaganda has degenerated (or always was). Here, there are people on the ground doing experiments, screwing up, acknowledging screw-ups and tossing that data in the garbage but conversely, making discoveries that advance percentage yields of fermentation and feedstock technology on a daily basis. If you think you knew something 2 years ago, forget it, you’re three or four years out of date, because what people in the field know now will probably not make a press release or published patent application until then.
This field is rocking right now, in this economic environment too. It’s like the early eighties, when big Pharma was telling biotechnology companies they couldn’t afford the plumbing and, of course, now big Pharma does its research by buying companies with marginal plumbing capabilities.
I suspect you’re thinking of this graph or similar:
http://www.pacificethanol.net/site/_images/media_photos/energy_balance_chart.gif
And yes the rest of your comments are largely correct … big gains are being made
Smokey says:
December 28, 2011 at 6:03 pm
A. Scott says:
“I just paid $2.52 for E85 with E10 priced at $3.35, a 25% discount vs a 20% or less drop in mileage.”
I suspect that is due to the heavy ethanol subsidies.
No its not. As the study I posted above showed it is because of the overall downward price pressure ethanol puts on gasoline the more it is used and competes. If it was solely the subsidies then you would see a similar price benefit across the country – commensurate with/matching the subsidies. You do not. What you do see is the more available and used ethanol is in an area the bigger price reduction – in Minnesota equaling $1.37 while on the East cost with minimal availability a small fraction of that.
The study shows the clear direct benefit of subsidizing build out of production and delivery infrastructure – that there is a direct payback. Brazil’s experience – which all the naysayers want to ignore – shows ethanol to be a sustainable valuable part of their energy programs. But also that it took considerable years and support to reach sustainable mass.
Without that support there would be likely be no or minimal ethanol industry there today.
@ur momisugly A Scott.
A. Scott says:
December 28, 2011 at 5:57 pm
=======
My response:
That 20% drop you are experiencing is likely an average w/ ethanol. I believe that one of the primary factors will prove to be a combination of the knock sensor and the ECU (computer). It works like this (simplified version). The knock sensor picks up a ping or knock from the engine and sends a signal to the ECU. The ECU in turn adjusts the ignition timing in a retarded direction (less timing advance) while at the same time enriches the fuel / air mixture to eliminate the ping / knock coming from the combustion chamber.
Timing and fuel / air mixture ratio is critical with regards to any gasoline internal combustion engine. There is much more to it but you can’t get by this.
Some of the arguments that have been presented here today will not hold water when anyone driving an automobile prior to ethanol being mandated can easily see for themselves.
++++++++++++++++++++++++++++++++++++++++++++++
A. Scott says:
December 28, 2011 at 5:49 pm
======
My response:
Why did you write this only 8 minutes prior to posting the above that I reponded to? Are you having communication issues? I could speculate but I wont.
To clarify to Smokey – it is not entirely or directly the subsidy being seen. I am certain we will see an effect on prices with ending the subsidy – they will go up – but overall there will still be a significant downward pressure on gas prices due to ethanol – which will continue to be magnified in areas with higher ethanol availability.
BTW – if any of those industry people that are supposedly behind us alleged trolls are out there – feel free to look me up – I’d be happy to get paid. Since I get accused of it every time I try to express my personal, educated opinions might as well collect on it ….
😉
Smokey @ur momisugly 1:46: “Society does not need a corn ethanol subsidy. Nor does society need a corn ethanol mandate. Do you disagree with Congress eliminating the subsidy?”
Society does not need a corn ethanol subsidy, Society also does not need an oil depletion allowance, or any subsidy of any industry out of the research stage. The ethanol mandate (it is not restricted to corn ethanol) is an air quality decision that is within the province of Congress to decide. The mandate though is not limited to ethanol. MDPE (??) is also allowed, though Congress in it’s “infinite” wisdom has chosen not to provide liability limits for the groundwater contamination caused by MDPE(??) so the industry has restricted itself to ethonol considering the liability risks.
And Congress did not eliminate the blender’s credit so much as allowed it to expire. The ethanol industry does not need that advantage to continue on a profitable basis. The oil industry also does not need the depletion allowance to continue. It is not the lack of a tax advantage that is restraining domestic oil production, or rare earths, or any other mined resource.
a jones says:
December 28, 2011 at 6:17 pm
As I have observed before on this blog.
Whomsoever can turn cellulosic byproduct economically into fuel or food or plastics will indeed deserve the vast fortune they will make thereby.
This is not my original observation or words, it dates back to at least the 1920′s if not before.
And we are no further forward today.
=================================================
I’m sorry a jones but, respectfully, that last sentence is a completely erroneous statement.
The science of converting cellulosic waste to the above products is orders of magnitude further forward. You may not see it in the lay press, because it is proprietary. You could probably school up (to some extent) by visiting the USPTO website and searching the patent application database with the keywords of your choice. Of course, anything you find will have been superseded by 18 months, at least.
As Anthony’s link (to Gevo) describes, the limiting step is the infrastructure development, which is where we find ourselves right now, in a bad economy.
Ummm yes, I’ve built two full E85 conversions and run 3 different cars on E85 fuel blends. I also wrote several FAQ’s on E85 for those who want to do the same, and have assisted a few hundred people (at a minium) understand what is involved in tuning an engine to use E85 successfully.
You want to follow that opening query up with a legitimate adult question and perhaps I can help you understand how engine management systems work too!
Larry
I just lit my peanut butter sandwich on fire.
Regarding government subsidies, A. Scott says: “Without that support there would be likely be no or minimal ethanol industry there today.” That is because the market has little use for ethanol in gasoline. You could spend $100K on an econ education and never learn the following:
If adding ethanol to gasoline was a good idea, there would be no need for government subsidies – which
primarilyonly benefit special interests, at the expense of the rest of us.@ur momisugly Hotrod, A.Scott just shot you and others out of the water with a 20% drop in mpg in his experience with ethanol( A. Scott says: December 28, 2011 at 5:57 pm)
His experience is similar to the rest of us. I’m not sure where your experience comes from. Wait, let me guess …..
If I should decide that I don’t have anything better to do, maybe I will locate some of your posts / comments from the past and present them to you. Would you like that? Would you then retire ‘hotrod larry’?
Wait, it seems that A.Scott is slipping. You better get back here ASAP. He may have made a truthful comment!
For those who still believe that an abundance of cellulosic ethanol can be commercially produced, below is one of many disappointments for those who believed that spending $$$ will result in the commercial viability of a fuel for which technology did not exist. The hopes for a miracle fuel, pushed by congress and the administration, was the foolish basis for mandating cellulosic ethanol. This is the reason that private investors are scared off, they have been burned!
This is the direct result of a government policy to push and subsidize commercialization before the fundamental pilot plant research is completed.
http://blogs.desmoinesregister.com/dmr/index.php/2011/12/03/a-cellulosic-ethanol-disappointment/
“The plug has been pulled on a Georgia plant that was to make ethanol from wood chips, creating another issue of government subsidies for biofuels and also enlarging the question of the future of non-corn ethanol.
Range Fuels in Soperton, Ga., received $156 million in federal grants during the George W. Bush administration. The facility, also backed by wealthy California environmentalist venture capitalist Vinod Khlosa, was closed on Friday.
The facility defaulted on the government loan and had failed to produce any fuels.
Range Fuels received combined grants from the Departments of Energy and Agriculture late in the Bush administration as part of an effort to find new sources of ethanol other than corn.”
cwj @7:06 pm,
You’re thinking of MTBE.
A. Scott says:
December 28, 2011 at 6:30 pm
Thanks for your carefully considered answer. I have learned a lot today about a subject I was only marginally aware of. In the old days (ha ha) I would read all this in magazines or other print media – nowadays it’s all internet and digital media. I can assure you I tune out as much noise as I can.
A real problem seems to be distribution as you point out. This is interesting in that any alternative to the energy infrastructure we have will face this problem…even if a product is desired in a market, how to deliver the product to customers is an important element. Also product design of vehicles to work well with the new fuel has to be considered.
So for the sake of argument, (and I am no authority on this subject), let’s just say that the public investment has had a payoff in the development of corn ethanol as a viable fuel stock.
As a consumer interested in purchasing this product, and considering the distribution problem you have noted, what do you suggest be done at this time?
E10 has been used extensively (mandated in Mn) for many years. I have Never heard of ethanol “Evaporating out.” In fact, your fuel systems are designed in such a way as to make this, basically, impossible.
I don’t know anything about “Climate Science.” But, I sure hope you folks that expound so authoritatively about it know more about it than you do biofuels, Wind, and Solar (which you, also, expound authoritatively, and incorrectly about.. Because, if you don’t, the Warmists might be right.
I’m, honestly, starting to get a bit worried about that.
A. Scott says:
December 28, 2011 at 6:41 pm
philincalifornia says:
December 28, 2011 at 5:58 pm
A. Scott says:
December 28, 2011 at 4:50 pm
Regarding ethanol, there have been numerous studies from reputable scientists, institutions and agencies, that clearly show the net energy balance of ethanol production is positive.
================================================
I suspect you’re thinking of this graph or similar:
http://www.pacificethanol.net/site/_images/media_photos/energy_balance_chart.gif
And yes the rest of your comments are largely correct … big gains are being made
————————-
Yeah, that’s the slide thanks, although I think I may have picked up one that went through 2009/2010 at some recent conferences.
i know the rest of my comments are a bit beyond largely correct. I’m living in it.
Glad you came back