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
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Catcracking says:
December 30, 2011 at 3:43 pm
A.Scott says [T]he ethanol industry now provides approximately 10% of the gasoline used in automobiles, an amount that exceeds the spare capacity of US oil refineries. This “missing” fuel would have to be imported in the short run, and the required volume would be large relative to available import supplies.
More inaccurate information re refining capacity, since several major companies have just shut down two large refineries on the Delaware river, One at Marcus Hook and another at Trainor. Yet another large complex in Phila is scheduled for shutdown in 2012 unless a buyer is found.
http://www.nasdaq.com/aspx/company-news-story.aspx?storyid=201112211505dowjonesdjonline000601&title=update-pbf-plans-1-billion-upgrade-to-delaware-refinery
The reason for shutdown is probably complex but the expensive EPA requirements are probably a significant factor, possibly including significant investment for producing low sulfur diesel. One of the operating refineries (Delaware City) on the Delaware River announced plans to upgrade the product to satisfy the ultra low diesel specs per the EPA at a cost of up to $1 Billion Dollars. It is not clear that the Delaware “EPA” or the US EPA will ever approve this expansion.
Where is the shortage of refining??
First, you should note I was quoting a published report.
Second, your claim seems to agree with the authors – you show additional refineries shut down – which reduces refining capacity and reduces the ability to react to a loss of ethanol, as the authors of the study note – yet, after showing a reduction in refining capacity, then ask where is the shortage of refining?
Not sure I follow what you are trying to say.
The study found that if ethanol was no longer available, that the existing gas refining capacity would be unable to meet the demand to replace that ethanol product. You seem to show evidence supporting their claims?
Catcracking says:
December 30, 2011 at 4:27 pm
For those who underestimate or misrepresent the importance of offshore oil in Brazil. and it’s impact on their economy.
http://www.nasdaq.com/aspx/stock-market-news-story.aspx?storyid=201112291225dowjonesdjonline000367&title=anadarko-gets-419-million-from-statoil-for-peregrino-oilfield-stake
“Chinese state-run oil companies have made a big push into Latin America over the past two years and Brazil has been a prime target because of recently discovered deep-water offshore oil deposits, which some analysts said could hold as much as 100 billion barrels of oil equivalent. Last year, state-run Sinochem Group acquired a 40% stake in Statoil’s Peregrino offshore oil field for $3.07 billion. “
I don’t, and I don’t think any intelligent person would, disagree that the offshore oil find is a great and beneficial windfall to the Brazilian people and economy. I objected to the false claim that ethanol was forced on the Brazilians by the military and that they suffered as a result, and that somehow the of shore oil find dragged them out of the terrible position they were allegedly in.
There’s not a shred of truth IMO to any of that. Brazil has the 6th best economy in the world. And ethanol has been a significant and important part of that. Even without the off shore oil they have a sustainable renewable energy program.
Something johanna apparently thinks is evil.
I don’t think the Brazilians would agree with her.
Ethanol has done a lot of very good things for them. I think they would find her(?) close-minded, boorish and unwilling to see the benefit in some small common sacrifice for a greater good. And Brazil is a crystal clear example ethanol does work. And that some government involvement is an important and worthwhile part of growing the industry to a sustainable status.
A. Scott says:
December 30, 2011 at 12:38 am
===========
Cotton acreage planted and/or harvested.
http://usda01.library.cornell.edu/usda/ers/89004/Table-08.xls
That should make you happy (or not).
A.Scott Iam very happy we agree on the current soon to be former house sitter in the White House. Nero would have been a better choice. The Communist Chinese are also drilling in the Carribean without any regard for safety or the enviorment. While American/European companies are hobbled with unbeliveable restrictions including meddling by the annoited one. An by the way I have nothing against the Brazilian people. But if some of the bikini clad ladies were to lean on me, I would be totally supportive.
Catcracking says:
December 30, 2011 at 5:53 pm
Yesterday the EPA finalized the 2012 mandate for blending biofuels into our nation’s transportation fuel supply:
In a nod to how hard it is to predict the future, the EPA has lowered the cellulosic biofuel mandate from 500 billion gallons to a less ambitious 8.65 million gallons, which is 1.7% of the original planned requirement. Of course, they have done the same in previous years and as of October no qualifying cellulosic ethanol had been sold to refiners. Naturally, refiners are not pleased that in 2012 they will possibly be spending up to $8 million in credits depending upon actual production levels of cellulosic ethanol: The final 2012 overall volumes and standards are:
Biomass-based diesel (1.0 billion gallons; 0.91 percent)
Advanced biofuels (2.0 billion gallons; 1.21 percent)
Cellulosic biofuels (8.65 million gallons; 0.006 percent)
Total renewable fuels (15.2 billion gallons; 9.23 percent)
“500 billion gallons to a less ambitious 8.65 million gallons, which is 1.7% of the original planned requirement”
How could any honest person consider that cellulosic ethanol is a success. Keep in mind that this was mandated because the EPA established that corn ethanol does little to knowthing to reduce the carbon footprint!! Ergo the blenders are screwed as follows
“The credits cost about $1.20 per gallon, according to Charles Drevna, president of the National Petrochemicals and Refiners Association. “Once again, refiners are being ordered to use a substance that is not being produced in commercial quantities—cellulosic ethanol—and are being required to pay millions of dollars for failing to use this nonexistent substance. This makes no sense,” he said.
How can anyone justify this insane policy??
After years of subsidies and nothing but failures, it’s time to stop wasting taxpayers $$$ and misleading investors on the near term promise of commercial ethanol production. Stick to basic research.
Whoah … you need to slow down and verify before you run off shouting the sky is falling. A few minutes of reading, and a little perspective, can save a lot of silliness.
This story is a mess of shoddy story-telling- with their blatant outright mistake at the core of the story’s very premise, along with their complete lack of perspective and context. They do not remotely tell the true story of the report they quote.
Lets start here – this is the link to the EPA press release itself referenced in your story:
http://yosemite.epa.gov/opa/admpress.nsf/0/A7CE72844710BE0A85257973006A20F3
Not a thing there to support the story’s 500 billion claims.
This is the link to the actual final 2012 rule:
http://www.epa.gov/otaq/fuels/renewablefuels/documents/rfs-2012-standards-final-rule.pdf
I don’t like the EPA one little bit – but the story you posted doesn’t remotely portray the reality.
The EPA, as they do every year, are required pursuant to the Energy Independence and Security Act of 2007 (EISA) to:
By law the EPA must establish how much renewable fuels are available and establish how much will be required to be used. Same thing they do every year. You carefully left out that they have reduced the cellulosic number in prior years as well, as production of cellulosic ethanol has not met the early expected timetable and goals.
Their review found that cellulosic plants producing appx 10.45 million ethanol equivalent biomass gals annually were online or under construction and would come online in 2012.
The statute allows them to “… reduce the applicable volume of advanced biofuel and
total renewable fuel if we determine that the projected volume of cellulosic biofuel production
for 2012 falls short of the statutory volume of 500 million gallons.”
Read that carefully as the people who wrote the story you quoted did not.
Note that the original approved statutory volume for cellulosic biofuels was 500 million gallons – not 500 billion gallons as the story claimed.
The EPA found there was 10.45 million ethanol equivalent gals (8.65 million actual gals) of cellulosic production (ethanol and diesel) available for 2012 and properly set that as the goal.
Still terrible I’m sure you’ll say … still a huge failure.
Only absent context and perspective.
The same story, and the EPA report, show the total ethanol equivalent volume of renewable fuel required under the rules for 2012 to be 15.2 billion gals. There the “b” is correct – billion.
So – the truth is the cellulosic portion of the overall ethanol equivalent renewable fuel requirement was reduced from a whopping 3% (500 million out of 15.2 billion) to 0.1% (10.45 million out of 15.2 billion)
Yes I guess that is earth shattering news. Not.
It is a horrible failure that a new technology is only able to deliver part of its already minuscule projected share of the overall renewable fuel requirement. Not.
While cellulosic technology has been around for some time so has basic ethanol production. Large scale use of both is new. Commercial cellulosic production has been developed and proven in small scale commercial plants and is currently being deployed into large commercial scale plants under construction.
The most significant reason this has not already occurred is simple. It takes huge amounts of capital to build and start up new plants like this. That lack of capital coupled with the sharp drop in consumer travel, oil prices (and subsequently gas prices) due to the massive collapse of the financial markets put development of cellulosic plants on hold the last 4 years.
Many of the corn ethanol businesses also suffered a similar fate – some going bankrupt – not because the technology was bad, but in their cases often because they had committed to huge contracts for corn and hedges and when things collapsed could not survive.
Most of those assets are now in new owners hands – usually for a fraction of their original costs – yet another strong positive for the renewable fuels industry.
Let me repeat – large scale commercial cellulosic production, even at the 500 million (with an “m”) gallons number was a small scale startup phase portion of the overall 15.2 billion (with a “b”) renewable fuels requirement. That this brand new technology is behind on meeting its tiny share goal of the overall renewable fuels requirement is completely unsurprising, with or without the massive financial market meltdown.
Oh – and by the way – I think the EPA’s position on waiver credits is silly. If you reduce the overall cellulosic requirement – that should be the same requirement for obligated parties.
johanna says:
December 30, 2011 at 3:38 pm
philincalifornia, what you have cited is just the standard hokum peddled by every rent seeker. Give us free money, and more things will happen in our sector than if you had not given us free money. Well, I’ll be blowed – what a revelation.
————————————————————————–
Johanna, you are wrong on so many levels. First, of the three links that I posted, none of them are more than a month old, and if you care to read the Richard Hamilton stuff closely, you will see that this was first described about six weeks ago at the Advanced Biofuels Markets conference in San Francisco, so can’t be exactly “standard hokum” can it now.
The other link on gas going up on Monday, I dunno, it’s so new that I have no idea what’s going to happen, do you. Standard hokum – I don’t think so.
To add further insult to injury on your theories, Mr. Hamilton could not present on his company (so chose to give this presentation) because his company was in the process of going public and he wasn’t allowed to talk up his own company because of SEC requirements. Going public, you know, an IPO, where public investors vote on board members and kick CEOs asses out the door if they don’t produce. So that would be the people he is “seeking rent” from currently.
Check out other IPOs from Codexis, Amyris, Solazyme, etc etc.
And then lastly, you do understand that in your last paragraph, you were essentially calling George W. Bush a ‘green’ Socialist ??
http://money.cnn.com/2008/03/05/news/bush_ethanol/index.htm
I think you’re the one with the “standard hokum” problem.
eyesonu says:
December 30, 2011 at 7:08 pm
A. Scott says:
December 30, 2011 at 12:38 am
===========
Cotton acreage planted and/or harvested.
http://usda01.library.cornell.edu/usda/ers/89004/Table-08.xls
That should make you happy (or not).
I’ll gladly increase your grade for effort from a “D” to a “B-” … 😉
However, still a “not” ….
You’ll be happy to hear I agree it is one of the correct sources for the numbers you posted, and I don’t argue that your posted numbers are different from your source.
They are not however the harvested acres of cotton numbers.
Rather than tell you the error, I’ll give another clue. Not to be a jerk, but in the hopes that you’ll find that the research you’re actually doing now is of some value – maybe even interesting and fun – in the future. And to demonstrate the benefit of spending enough time when you do research to understand what you present.
Table-01 is the correct table for what you are trying to express – the cotton acreage. But a better research resource to help find the answer you need might be found here:
http://www.usda.gov/nass/PUBS/TODAYRPT/acrg0611.pdf
Read the first page and then look at the cotton section starting on page 19. Compare the data you find there with Table-01 and the acres harvested data you posted from Table-08. My detailed reply to you earlier will help give you more clues – look at the cotton acres data I posted and compare.
That will give you your answer – why what you posted is not correct – is not the cotton data you think it is.
I suspect it won’t change your mind – and there is actually at least some evidence you could try to use to support your claim and position. But you have to understand the data and have the correct data to do so.
Good luck in your hunt … I honestly hope you find the answer and find the search and gathering knowledge and data interesting as well.
Some further reference data that some may find beneficial regarding my 8:15pm post was provided by jabra earlier – the actual original requirements from the 2007 Rule – note particularly the “cellulosic” vs the overall “Renewable Fuel” requirements (both in billions of gals):
A. Scott
My point was that there is an abundance of unused refining capacity that is being idled for various reasons including the administrations goal of phasing out fossil fuels via EPA regulations, etc. If we did not require ethanol, these refineries would be needed and profitable to replace the ethanol, The article you quote is intentially indicating that we are adicted to ethanol and cannot stop.That is not true
Re the “great” claims for ethanol. I am not opposed to Brazil using it since it contributes and sugar makes sense, but as I have already noted they are experiencing a decline in production and have reduced the % required , and this cannot be ignored!. The % if required ethanol has dramatically reduced over the years since they got rid of the military dictators. Without their exploitation of oil I seriously doubt that they would have achieved their economic success. Brazil clearly acknowledges that oil drilling is an important part of the picture. Unfortunately the US currently believes that ethanol can back out oil. Glowing projections have already fooled the current administration, and to continue on that path witout caution can only harm the US economy in my opinion. It is scarry for one who has worked in the energy business for over 40 years.
More info for your reading
http://www.soyatech.com/news_story.php?id=22743
“Washington Times (DC) — RIO DE JANEIRO, BRAZIL — March 21, 2011 — In 2007, former President George W. Bush punctuated a trip to Brazil with a visit to a biofuels plant, highlighting the country’s new energy independence and expanding ethanol market as a model for the U.S. to kick its addiction to oil.”
This was the hope of the Congress and two administrations, producing cellulosic ethanol that has failed. Subsidizing the same thing over and over is not going to correct the technical problems that cellulosic ethanol has encountered. A full audit should be performed to identify the weak points that were shoved under the rug during the premature attempts to commercialize. It clearly is not more funding from a DOE that lacks technical expertise. No commercial cellulosic ethanol has been produced and the EPA has dramatically lowered the mandated cellulosic ethanol, but leaving the blenders holding the bag. From my Industry experience no project would go to commercialization without a comprehensive review by technical experts and all bugs workrd out.
“Four years later, though, Brazil has made major oil discoveries and drilling advocates say the Latin American nation should be a model for more drilling in the U.S. at a time when oil costs have surged beyond $100 a barrel.”
The US is ignoring the part of the model that includes drilling and to deny the facts is foolish.
“That Brazil is now awash in oil is somewhat ironic given the fact that the military dictatorship in charge in 1975 instituted an ambitious ethanol program out of fear that the country was too dependent on foreign oil, doling out subsidies to sugar-cane farmers and requiring gas stations to install ethanol pumps. Decades later, 40 percent of the nation’s fuel supply comes from ethanol.”
I think it is more like 15 -20 %today
Pretending that these oil discoveries have not significantly contributed to Brazil’s economy is intellectually dishonest.
If the US were to follow the current Brazil energy model we would also be exploiting our oil and gas resources to the max instead of looking for ways to constrain fossil fuel production, not lying about how great ethanol is in Brazil. Also to create a false hope that ethanol et. al. can replace fossil fuels near term in the US is not realistic as any sensible policy must include fossil fuels. This is not being implemented by the administration and the challenges of sugar vs corn is ignored out of ignorance or deception by many of our politicians .
“Together, Libra and other recent oil finds could eclipse123 billion barrels, according to some researchers, and catapult Brazil from the world’s 15th-largest oil producer to a member of the coveted top 10.”
Some documentation on the Military dictatorship from the current leader, there is a lot more including claims of human rights violations :
“A former student activist who was tortured while jailed by Brazil’s 1964-1985 military dictatorship, Rousseff criticized Iran’s human-rights record after Lula hosted Iranian President Mahmoud Ahmadinejad in 2009 and visited Tehran in 2010”
For the record, I have consulted on a number of PDU biofuels projects, not on the process side, but as a designer of special equipment ; therefore I would like to see biofuels succeed and be economically competitive. The failed promises over 4 plus years from a number of companies and University professors combined with the method of doling out $$$ leave me pessimistic that cellulosic ethanol will contribute to our energy needs for decades at best. I think a new course is essential if we are going to succeed. Stopping fracking (rather than fixing any issues), stopping the Keystone pipeline, shutting down drilling everywhere, etc is not going to lead to jobs or a strong economy. Research in Biofuels is OK if reviewed by someone with technical expertise rather than a zealot.
And BTW
http://www.gao.gov/new.items/d09556t.pdf
In fiscal year 2008, the Department of the Interior (Interior) collected over
$22 billion in royalties for oil and gas produced on federal lands and
waters, purchase bids for new oil and gas leases, and annual rents on
existing leases, making revenues from federal oil and gas one of the largest
nontax sources of federal government funds.
In 2008 lease sales brought in $20M dollars, Zero in 2011.
A. Scott says:
December 30, 2011 at 5:50 pm
ohanna says:
December 30, 2011 at 7:58 am
Seems to me that is a heckuva deal – $6 billion in subsidies saves consumers $20 to $35 billion a year … and it does it by using cleaner, renewable ethanol fuel.
Please explain the problem you have with that?
——————————————————–
Sport, 150 years ago you would have been in a travelling tent show selling snake oil.
The proposition that, if I give you $6bn, you will save consumers $20 to $35bn (what’s a measly $15bn difference in savings among friends, anyway? We’re giving away taxpayers’ money to help people here!) would make P T Barnum proud.
Why not just pay the $6bn yourself and save consumers ‘only’ $14bn to $29bn? Since you care so deeply about them and all? I assume that you are not making any profit off the $6bn, so what’s the difference?
It’s called ‘rent seeking’ in the modern vernacular of snake oil sales. It means getting money or commercial advantage from the government through subsidies and/or regulation rather than paying your own way. All rent-seekers claim that giving them an edge over their competitors will reap rich rewards, and they are right. What they misrepresent is to whom those rewards will accrue, and at whose expense.
Your spam is unreadable and I suspect, unread. Do you really think that posting every one of the eleventy million links on Google saying how great ethanol is will change anyone’s mind or add anything to the discussion?
I posted links to the studies – it is up to you whether you care about educating yourself or not. Clearly you seem to prefer ignorance, and make no effort to prove or support your position.
I presented facts – and I studiously avoid wherever possible “industry” documentation – going instead to the sources – the actual reports and studies themselves.
I cannot as you note make you or anyone else read them.
Those that do may still believe as they did before reading, but they will at least be able to make an informed and educated judgement and comment if they do.
Its really quite interesting and funny that those who whine and attack the loudest – like you – are always the ones that never offer any meaningful, intelligent rebuttal – and rarely if ever offer documentation to support their attacks.
If you disagree with my comments then get off your whiny lazy arse and rebut my comments and claims – and support that rebuttal with documents and facts. We both might even learn something.
—————————————————————————
Here we go again. Are you new here? It is not up to me to disprove the validity of your demand that people contribute money to your hobbyhorse, and then be forced to buy it. It is up to you to demonstrate that we should do this. I don’t have to rebut the proposition that your lobby group deserves cash forcibly extracted from consumers and taxpayers, and protection from competition. It is self evident that any lobby group that asks for these things is simply looking for an easy way to avoid the realities of the marketplace by rent seeking.
If you want to know why the policies you advocate are (at best) smoke and mirrors, have a look at East Germany, where they did the kind of thing you support, vs West Germany. Command and control economic models simply don’t work. They just waste resources and reward inefficiency. The bosses always do well, but the general populace are impoverished.
I repeat, when your whole case is based on using other people’s money (minus their consent) and forcing them to buy your product, I don’t have to prove a damn thing.
First – I appreciate you’ve chosen to respond civilly and with support for your position. I’ll try to respond similarly.
Second, the article did not “intentionally say” anything. let alone that we are “addicted to ethanol”. They studied an issue, looked at the data, and came to a conclusion based on what they found. That conclusion was that ethanol availability does reduce gas prices, and the benefit in lower gas prices is greater the more available ethanol is in a market.
They also found, that because there is not sufficient refinery capacity to replace ethanol, that the loss of ethanol would cause a severe supply vs demand constraint and would cause gas prices to increase – a lot.
I researched refinery capacity in detail a while back, due to the belief that the oil companies were purposely holding back capacity and production and not building new capacity so as to decrease supply thus increasing price.
I went back and re-looked at the data and came up with the following – these are my calculations and comments from the data, not quotes:
Over the last 30 years traditionally on average appx 7% of refinery capacity is non-operable at any given time. These are plants shut down permanently and those out of service and non-operable for repairs, maintenance, upgrades etc. These 7% of non-operable plants are generally NOT available for production even if needed.
The current OPERABLE capacity is 17,736,370 barrels per calendar day and the current OPERATING capacity is 16,937,024 barrels per calendar day, almost exactly the same as the 2006 to 2011 averages – so current capacity is almost exactly the same as the last 5 years averages. This leaves 799,346 barrels per calendar day that is OPERABLE but NOT OPERATING. This capacity is OPERABLE and could be used if needed.
However, there is yet another important statistic “Percent UTILIZATION of OPERATING Refineries.” This is the percent of the capacity of operating refineries actually being used.
The average UTILIZATION of OPERATING Refineries (the percent of the capacity of operating refineries being used) averaged 90% for the 1990 to 2011 period.
This number reflects that refineries are not able to run at 100% of capacity – they must be offline for more minor repairs, routine maintenance, weather issues and similar. The long term average utilization – 90% average from 1990 to 2011 – represents the “norm” … that operating plants can consistently run at appx 90% of total capacity.
In 2011 it is 85%, 86% average for 2006 to 2011 period and 88% average for 2001-2011 period. This in part reflects the hurricane Katrina and other weather disruptions including flooding. Some may in part reflect aging equipment needed more frequent repairs as most of the refineries are quite old.
It also likely reflects the decreased demand – both after 9/11 and then the financial market collapse and effect on the economy as miles driven plummeted. Some of this decrease – most likely the portion between current 85% and the 2001 to 2011 average 88% might be recoverable for additional production if needed.
So with that background and data how does it apply to your claim about idled/excess refinery capacity being able to take up slack if ethanol was not available?
2012 ethanol use is 15.2 billion gallons annually. That works out to 1,005,291 barrels per calendar day.
We know there is appx 799,346 barrels per calendar day that is OPERABLE but NOT OPERATING. This capacity could be used if needed – if ethanol was no longer available, but would be subject to normal “utilization” percentages. Lets assume we can get utilization back up to 88% avg utilization seen for 2001-2011.
This would give us an additional 707,566 bbls/day of available production. Which would leave us short just under 298,000 barrels per day, of the 1,005,291 bbls per day we need to replace ethanol.
Of the 15.2 billion gallons of ethanol we need annually – we are short 4.5 billion gallons even if we use all of the operable but not currently operating capacity, and if we get the utilization rate up to 90% from the current 85% average.
We currently have 148 OPERABLE plants with 137 OPERATING. Even assuming all 11 operable but not operating plants could be brought quickly back online their total production would only cover appx 70% of the current ethanol demand. We would still be short 4.5 billion of the 15.2 billion gals of ethanol needed in 2012.
Again, the above calcs are based on my own independent review of the data downloaded from links below. I believe them to be correct, but feel free to proof and point out errors.
The calculations above show the study I listed earlier was correct – that we do not have anywhere near sufficient refining capacity to make up for the loss of ethanol fuel.
That really was not the biggest point however – their study showed that the availability of ethanol is currently keeping gas prices lower by an average 89 cents per gallon wholesale across country and by as much as $1.37 a gallon in higher availability areas like Minnesota. They also found even over a longer term the average savings were average .25 cents per gallon.
These savings are in part due to the availability of ethanol, and in part due to the lower price of ethanol. They found – and the refinery capacity shows this well – that without ethanol we would see significantly higher gas prices.
The study’s economists found that the average family saved almost $900 annually on gas whether they used ethanol or not. And that that savings increased the more available ethanol was in their area.
Everyone who uses gasoline benefits – and significantly – in just gas price savings alone, let alone the other ethanol benefits. The authors found that overall the country saved appx $34.5 billion on gasoline due to availability of ethanol – whether they used it or not.
No snake oil – just facts.
To me the $6 billion in subsidies is a pretty cheap price to pay for $34.5 billion in savings – savings every driver who buys gasoline gets.
I just don’t know how anyone can argue that a renewable fuel, that reduces emissions, and that saves every person who buys gasoline (whether they ever use ethanol or not) considerable money on their gas, is a bad thing.
I also cannot understand how anyone can argue that even if we kept the subsidies – how a $6 billion annual investment that saves all gasoline purchasers money, a total of appx $34 billion in savings per year as a direct result of the availability of ethanol, is possibly a bad deal.
I think the production side, at least the corn based side, is stable enough it can survive without the blender credits. That said the economic benefit study clearly showed that increased availability further lower gas prices and increased gas cost savings. As most of the country has minimal or no distribution I think keeping some or all of the existing subsidy, but re purposing it where it does direct benefit to consumers thru lower gas prices, is the smart thing to do.
EIA Number and Capacity of Petroleum Refineries
Weekly U.S. Percent Utilization of Refinery Operable Capacity
I’ll try to address your other comments when I have time 😉
More denigration and ad hominem personal attack while making zero effort to offer any meaningful, intelligent, civil response.
It is clear you are completely close-minded and refuse to even consider any position but your own – and will be rude, arrogant, demeaning and condescending to anyone who dares think differently than you. Rather than engage in reasoned debate, you simply denigrate and attack.
The policies I advocate are that people should educate themselves, learn the facts and engage in critical informed thought, before passing judgment and jumping to conclusions. You seemingly are incapable, or simply refuse, to even consider and review facts that do not follow your own agenda and beliefs. That is truly sad.
Do you believe renewable, cleaner fuels are a bad thing?
Do you believe reducing dependance on fossil fuels, and on foreign oil is a good thing?
Do you believe Brazil’s ethanol based, renewable, sustainable energy program is a success, and beneficial to the Brazilian people?
You strangely and inexplicably apparently do NOT believe that all gasoline buying Americans saving considerable money on the gasoline they purchase, thanks to the availability of ethanol as a competitive fuel, is beneficial.
By extension one could take your seeming hatred for public support, regardless of the benefit, and make a case you believe no one should get food stamps, or housing assistance or medical care, regardless of the benefit or result. I don’t much like how overboard entitlements have become but I still recognize the real need to provide help to achieve a greater good, benefit and goal.
You apparently believe that any assistance, regardless of benefit or public purpose, is “snake oil” – and any who would dare suggest it are charlatans and worse.
As you can see – if you actually took the time to read my comments, I have no problem at all with legitimate criticism, and honest debate. I have no misbelief that anyone gets “pal review” here, its a tough room and I don’t mind that – its why I came here … but no one should be subject to rude, arrogant “punk review” either.
If you disagree then stand up and make an intelligent, civil response and/or rebuttal, supported with reasoned opinion and hopefully data and facts.
[REP – hopefully that was at least nominally better – feel free to edit as appropriate ;-)]
[REPLY: Still kinda harsh, but better. I’d like to ask ALL commenters in 2012 to think twice before hitting the send button. Happy New Year. -REP]
philincalifornia says:
December 30, 2011 at 10:13 am
Myrrh, hemp isn’t the only fast growing plant around. Other cellulosic sources, to name just a couple, include switch grass and poplar. Corn has the big advantage of producing a high percentage of easily extractable starch that is then saccharified prior to fermentation.
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Haven’t read anything about poplar, but switch grass I’ve seen mentioned. Difficult to get established but once established fine, and perennial, but, it has the drawback as with corn that it needs more water and fertiliser than hemp – also hemp is the great weed suppressor, so another plus for it. Read something about fungal problems with switch grass which was also a big drawback with flax.
What I like about hemp is that like corn it also produces a super feed product, I’ve taken an interest because my local health shop has just got in hemp protein and oil, locally produced, and I’ve been trying it out. Hemp is also faster growing than corn but don’t know how either compares with poplar pound for pound.
Poplar, I’m imagining, would be field poplar? Very fast growing but does require a lot of water. Don’t plant it anywhere near your house or near drainage pipes – its roots will drive through anything to get its water fix. 🙂
Anyway, I think biofuels a definite benefit to us in the fuel wars, not least because it can sensibly take this back to local and even personal production – for example, I’m surrounded in farmland but the fields not good enough for arable production, on a mountain flank (well, not a mountain by some countries’ standards..), but soil fine for cattle, sheep, goats and horses, hemp could be grown here. Not beyond the bounds of imagination to see some of the farmers get together and rotate their fields for biofuel production shared among them. Ah, maybe some of the bad press it is getting has been instigated by some who are very anti cheap energy for all… ?
And warming to that subject… hemp’s production world wide was also nobbled by the vested interests of the time originating in the US, through the UN it got all hemp tarred with the ‘marijuana’ brush, but it surely makes more sense to promote this as fuel alternatives in places such as Africa than the pvc which even in the great african sunshine just about manage to keep a fridge going.. Even burned direct for heat, cooking. And it’s a great food source.
Myrrh: You should read those historical accounts of prohibition with great suspicion. The first successes for states prohibiting alcohol were as early as the 1850′s, well preceding the internal combustion engine. Prohibition of alcohol was an issue constantly churning through the late 1800′s in the US. Before the imposition of nationwide prohibition in 1920, many states had already adopted it within their borders with the last wave of stringent prohibition laws starting in approx 1905. All this was before automobiles became common. Even during the height of prohibition in the 1920′s alcohol was illegal as a beverage, but not as an industrial product.
In none of my readings have I found any indication that it was part of some conspiracy to prevent people from making their own fuel alcohol, though most of my interest is previous to 1920
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As with all this history, it took a while to play out, but those antognistic to home distilled competition in fuel production just as they were investing in oil makes sense, by calling for a lifting of prohibition it immediately would have the effect of making still technology of little interest to the majority. There certainly was a concerted attack on Ford and here’s more background.
And there we have in a nutshell the same problem as today. I for one am getting really annoyed with the big pharmas interference which has already had some herbal medicines banned from general sale and is now trying to get vitamins off the shelves! I don’t care how big companies get, or how much money they make, but lobbying to give themselves unfair advantage in the market place by putting restrictions on others trading is unconscionable – anyone in government who has ever voted in such restrictions has a lot to answer for.. Government anyway has no right to restrict our personal production or use of anything – who made them God?
Prohibition was utterly stupid. But any legislation that is tyrannical as this was is of the same ilk. What makes bullying unacceptable in schools but suddenly OK when someone puts on a uniform or ‘passes legislation’?
Have we lost the rationality even children have to see that this is wrong?
The above extract comes from chapter 7, but this particular aspect of the story begins here:
http://www.gametec.com/hemp/fiberwars/chp6fr.html
Here’s background on switchgrass: http://www.switchgrass.nl/pdf/Paper-Elbersenetal2000.pdf
“Many reasons are given for using switchgrass as a biomass
crop for energy and fibre production, including the high net
energy production per ha, low production costs, low
nutrient requirement, low ash content, high water use
efficiency, large range of geographic adaptation, ease of
establishment by seed, adaptation to marginal soils, and
potential for carbon storage in soil, (Christian and
Elbersen, 1998; Samson and Omielan, 1992, Sanderson et
al., 1996).”
Says it has good establishment from seed, not what I read from tests on this. Perhaps some strains better than others.
The biggest user of fuel in the USA is the railroad. Lets look at Throium reactors and the electrification of the rail lines, jobs kept in the USA, massive import savings, leader in the technology, reduced freight charges for long haul. No brainer really, bet the Canadians do it first.
Taking into account ALL energy inputs, it takes about 4BTUs input to get 1BTU output of ETOH. Granted ONE of the energy inputs is solar energy, however, it is nearly inconsequential. The generally accepted efficiency of ETOH production from corn (including growing the corn (ETOH hacks leave this out)) is a range of between 24% and 34%. So, in fact, it is not a magical perpetual motion machine. Expending 4 BTUs of fossil fuel energy to produce 1 BTU of ETOH energy all the while driving up food costs, polluting the environment, damaging internal combustion engines, and starving the poor is just plain foolish. Even ALGORE knows this
A. Scott says:
December 28, 2011 at 2:52 am
Likewise, using corn for ethanol has NOT caused any widespread shift in plantings to corn and away from other crops – simply read the USDA crop reports.
Ethanol does get lower mileage than gas however it also costs less. E85 blend costs me $2.55 vs $3.35 for E10 blend – almost 25% less. My average fuel economy drops appx 15-18% in a 2003 Tahoe flex fuel vehicle – for a net overall saving in fuel with E85.
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A couple of points above quoted from your first comment of the very very many that you have posted on this thread. You / yours have contradicted yourselves too many times to begin to list and have been debunked repeatedly.
A major drop in cotton crops planted / harvested to about half with the ethanol mandate and related subsidies, that acreage is now recovering due to rapid rise in cotton prices and the reality of the ethanol boondoggle setting in. Your arguments have avoided the the fact that you were wrong with regards to shifting crop plantings. But that is the nature of your trolling.
Want me to point out the comments posted by you / yours stating that ethanol only causes a very minimal drop of 2-3% in mpg? I bet ‘hotrod’ scolded you good for that one.
How many posts have you made here. Include ‘hotrod’ as he usually works with a team when hijacking a thread to spout the ethanol agenda.
Re: A Scott
Your bargain is not such a good deal if you broaden your horizon to the grocery bill driven up in the process of maintaining this market distortion as official policy. And there is not a nice neat data package to pick up and play with because it involves everything from livestock farmers hurt by corn prices (zero profit margins) to unemployment benefits paid out to dismissed food procession line workers. There is also an inter-temporal effect as livestock herds are culled and not replaced and processing plants do not re-open.
Mr. A. Scott,
A simple question that requires a simple answer: Taking into account all of the energy inputs including the growing of corn from seed, does the production of ETOH have a thermodymnamic gain of unity or greater, is it more than 100% efficient? If it is, it breaks the first law of thermodynamics and it is truly a perpetual motion machine. If the gain is unity or less, then it is an exercise in stupidity or a waste of fossil fuel energy at a time when conservation is in order.
So which is it, a perpetual motion machine or an exercise in stupidity? No hand-waving please, just an answer to the question.
A. Scott says:
December 28, 2011 at 2:52 am
Likewise, using corn for ethanol has NOT caused any widespread shift in plantings to corn and away from other crops – simply read the USDA crop reports.
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Your schooling and grading of me tends to make you look well… very misinformed to say the least. I doubt that your being misinformed is really the case here.
From USDA crop reports:
I have shown the reduction of the cotton acreage planted that plumented a few years ago with the ethanol mandate that is now showing signs of recovery of acreage planted. Read the link again: http://usda01.library.cornell.edu/usda/ers/89004/Table-08.xls
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Now for a link to the USDA covering corn, oats, barley, sorghum : http://www.ers.usda.gov/data/feedgrains/Table.asp?t=01
From the data set I will compare 2004/2005 with 2011/2012 for simplicity in reading the charts. Also was about the time the government got involved in a bigtime way with ethanol. Read the charts. The numbers are in ‘million acres’ planted.
Corn planting (acreage) from 80.93 to 91.9 for an INCREASE of 13.6% and a price INCREASE from $2.06 to $5.90 – $6.90 per bushel (286% – 335% increase).
Sorghum planting (acreage) from 7.49 to 5.47 for a DECREASE of 27% and a price INCREASE from $1.79 to $5.70 – $6.70 per bushel (318% – 374% increase).
Barley planting (acreage) from 4.53 to 2.56 for a DECREASE of 43.5% and a price INCREASE from $2.48 to $5.20 – $5.80 per bushel (210% – 234% increase).
Oats planting (acreage) from 4.09 to 2.50 for a DECREASE of 38.9% and a price INCREASE from $1.48 to $3.20 – $3.60 per bushel (216% – 243% increase).
The above 2011/2012 prices likely reflect the range of prices being paid for harvested crops and data has not yet been compiled for a final figure.
http://www.absoluteastronomy.com/topics/Gasification
&
But what’s really going on here with so much antagonism?
Resourceguy says:
December 31, 2011 at 8:09 am
Re: A Scott
Your bargain is not such a good deal if you broaden your horizon to the grocery bill driven up in the process of maintaining this market distortion as official policy. And there is not a nice neat data package to pick up and play with because it involves everything from livestock farmers hurt by corn prices (zero profit margins) to unemployment benefits paid out to dismissed food procession line workers. There is also an inter-temporal effect as livestock herds are culled and not replaced and processing plants do not re-open.
Did you miss this link I posted earlier?
Hale – He felt the neglect of farms by a government controlled by bankers was at the root of the nation’s problems.
It still is. It’s the neglect of all of us dupes to the banking cartels creating money out of nothing, driving booms and busts and now from Goldman Sacks the great idea of starving millions by the creation of an artificial market to play out their pyramid gambling scam as they did with the housing market.
of Goldman Sachs:
http://www.foreignpolicy.com/articles/2011/04/27/how_goldman_sachs_created_the_food_crisis?page=0,1
“What was happening to the grain markets was not the result of “speculation” in the traditional sense of buying low and selling high. …“What we are experiencing is a demand shock coming from a new category of participant in the commodities futures markets,” hedge fund Michael Masters testified before Congress in the midst of the 2008 food crisis.
The result of Wall Street’s venture into grain and feed and livestock has been a shock to the global food production and delivery system. Not only does the world’s food supply have to contend with constricted supply and increased demand for real grain, but investment bankers have engineered an artificial upward pull on the price of grain futures. The result: Imaginary wheat dominates the price of real wheat, as speculators (traditionally one-fifth of the market) now outnumber bona-fide hedgers four-to-one.
Today, bankers and traders sit at the top of the food chain — the carnivores of the system, devouring everyone and everything below. Near the bottom toils the farmer. For him, the rising price of grain should have been a windfall, but speculation has also created spikes in everything the farmer must buy to grow his grain — from seed to fertilizer to diesel fuel. At the very bottom lies the consumer. The average American, who spends roughly 8 to 12 percent of her weekly paycheck on food, did not immediately feel the crunch of rising costs. But for the roughly 2-billion people across the world who spend more than 50 percent of their income on food, the effects have been staggering: 250 million people joined the ranks of the hungry in 2008, bringing the total of the world’s “food insecure” to a peak of 1 billion — a number never seen before.”
Got it? Biofuels is real renewable energy and big oil doesn’t like it now any more than it liked it in the early days.
Because, it is a genuine threat to their monopoly – and in main part the reason for the AGW scam in the first place – which was against the coal industry, and they’re still ranting on about ‘death trains’ to destroy the accessability to a cheap fuel resource abundantly available by demonising carbon dioxide as they demonised hemp – keeping Africans in poverty and raising the prices of fuel for us oiks in the developed countries until it becomes a choice of heating or food..
Get real here. Wind power and photovoltaic are an expensive joke on us, biofuels put into the same category is the same expensive joke on us – the object is monopoly and control in a mix of cartel business practices and perverse ideologies.
This and the following post on the EPA discussion worth reading –
http://wattsupwiththat.com/2011/12/26/shutting-down-power-plants-imaginary-benefits-extensive-harm/#comment-847464
In that mix is the real reason behind the villification of biofuels just as it’s getting going.
Sorry Sal … those numbers aren’t remotely accurate according to all published materials. Please provide documentation for your claims.
Saying the “solar” value (by which I assume you mean the sun that helped grow the corn) is inconsequential is just plain silly. The corn is the primary source of the energy that creates ethanol and without sun we don’t grow much of anything.
You also incorrectly describe the “generally accepted” net energy balance.
First, it is not 24% to 34% – it is 1.24 to 1 to 1.34 to 1 … 124% to 134% – that it takes 1 BTU of energy to manufacture 1.24 to 1.34 BTU’s of finished ethanol product. The correct statement, using these older net energy balance numbers, is that 24% to 34% more energy is produced than is expended in the production. Second – those are very old numbers – current yields are 1.6 to over 2 to 1 for corn ethanol, and much high than that for cellulosic.
Your next claim is false as well – all other studies include growing the corn as part of the net energy balance. From The Energy Balance of Corn Ethanol: An Update / AER-814 -Shapouri, Duffield & Wang 2002:
For the most part only a single study – Patzek and Pimentel – any longer claims negative net energy balance. And their work has been thoroughly refuted by many other reports from a myriad of institutions, government agencies and other scientists.
Among other fatal flaws Patzek and Pimentel gave no value or credit to the high quality, high value co-products, and assessed none of the costs of production (either of the corn or of the energy used to produce the ethanol) to the valuable co-products like distillers dried grans, corn meal, corn oil and the like produced from every bushel of corn used for ethanol.
The real value of these co-products is substantial: DDGS replaces 7.6 million acres corn, 5.86 million acres soy
Patzek & Pimental also used well below average corn crop yields and much higher than average nitrogen fertilizer use than reality at the time of their reports to further bias their numbers.
Why would Patzek and Pimentel be such an outlier? In this case, unlike the inaccurate claims made in the AGW debate, Patzek IS not only paid by the oil industry – that is his direct field of expertise and work. Feel free to read my earlier notes above for the documentation. Or here is he recent C.V. – a few excerpts from it might well explain why he would cook the books when it comes to competitors to oil:
Patzek & Pimnetels work is of little or no real value to any intelligent conversation of ethanol energy yields.
I’d also be interested in your sources for the other claims such as “polluting the environment” etc. …
Sorry Sal – but another swing and a miss. Your statements simply are not accurate. If you have do some support for them please post it – I’ll be happy to be corrected, if true.
By not renewing the US ethanol subsidy (for now) and dropping the import tariff, we get a free ride off the Brazilian subsidy. At least we can catch a breather from supporting a special interest group while watching the Brazilians debate the issue with their taxpayer resources. The food for fuel scam was stopped before it metastasized into publicly funded ethanol pipelines and cellulosic du jour subsidies. Hopefully this will be an exercise of wondering how the dinosaurs might have evolved without the meteor hit. Normally I would say do not underestimate the farm lobby in bringing this back, but then again there are many more ag entities hit by distorted corn markets than there are corn and ethanol lobbyists. If all of these ag-related sector groups were doing well it would be a different story. But the point is many of them are not doing well and that was bound to happen sooner or later. timing.