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
jabre says:
December 28, 2011 at 7:22 am
Don’t forget the subsidies of oil.
Please identify the “subsidies” of which you speak. Also ensure you understand the difference between a subsidy and a tax credit.
Most of the oil we import is from Canada, Mexico, etc that are not “hostile” to us. Except maybe the Canuks don’t like the Wings.
DirkH says:
December 28, 2011 at 7:17 am
And, uh, are that SMOKESTACKS I see in that wikipedia photo of a Brazilian ethanol plant?
http://en.wikipedia.org/wiki/File:Panorama_Usina_Costa_Pinto_Piracicaba_SAO_10_2008.jpg
+++++++++++++++++++++++++++++++++
That’s probably emanating from the burning of bagasse for energy. Bagasse is the woody part of the cane and, as you can easily guess, is produced in massive quantities in Brazil. In fact, one recent calculation has it at $600 Billion of chemicals being possible per annum by converting the bagasse to cellulosic sugars:
http://www.altenergystocks.com/archives/2011/11/bagasse_the_big_prize_1.html
This is happening guys. It’s smoking hot in a different way from the pic. Pity we can’t switch into sugar cane here in the U.S.
Car manufacturers are taking advantage of a CAFE fuel economy credit loophole when they produce E85 vehicles. Ever wonder how the super size pick up truck continues to be sold? E85 loophole is the answer. Everything is not always as it seems.
Celanese Corporation has a commercial catalytic natural gas-to-ethanol process (not an expensive Fischer Tropsch) that would significantly undercut the price of biomas ethanol. Unfortunately for consumers in the U.S., the congressional mandate to blend ethanol in gasoline stocks is specific to biomas ethanol. Celanese is building commercial scale natural gas-to-ethanol plants in China. ( http://celanesetcx.com/ )
It seems that the problem is solved so, why all the discussion of imports and subsidies? It really doesn’t matter where we get that first BTU – it could come from foreign oil or a man on a tread mill. All that matters is, once we have it we can make 1.6 BTU from it (the 6 to 8 seems really crazy) and then, through geometric progression, make as much energy as we want with absolutely no external input of energy. With it’s ability to amplify energy, we should be using 100% ethanol.
Why hasn’t this been done before and why are corn producers asking for subsidies? They should all be so busy counting their cash that they have no time for anything else. For the sake of argument, if one BTU costs $1 and you can make 1.6 BTU from it then, the 1.6 BTU can be sold for $1.60 – a 60% profit. What other business will give you this kind of return on your investment? And, using that logic, rather than selling it now, why not plow your 1.6 BTU back into ethanol making 2.56, then 4.09, then 6.55, then 10,48 etc. all the way up to infinite BTUs before selling? Your $1 investment will become infinite dollars in no time or maybe even 2x infinite dollars, or 100x infinite dollars or inifnite x infinite dollars.
NY state government funded three corn-ETOH plants within a 50 mi. radius of where I live to the tune of 10s if not 100s of millions of taxpayer dollars. One ran for a few months and the other two never really got into production. How could such an enormously profitable buisness have failed? It makes no sense – we should be making and storing ETOH BTUs in every available nook and cranny. Hell we should be building gargantuan space-based storage facilities for all of the free energy that can be produced from one dirty oil-based seed-BTU or one sweaty man-on-a-treadmill seed-BTU.
Maybe we should get that First BTU (the sacred one) from the sun or the wind making the input cost nothing (solar and wind power are free) making the % prorfit infinite with production of one ETOH BTU.
I can’t forget something I never knew in the first place. Tell us about these ‘subsidies’ you speak of. From what I’ve heard, some people think subtracting the cost of labor and tooling on an oil company’s 1040 is considered a ‘subsidy’ – as though government somehow ‘paid’ for them?
I agree entirely with MarkW who takes A. Scott to task for his assertion that speculators cause food price increases. In addition, a report from Argonne national lab (ANL) shows that for each BTU of energy input we end up with 1.34 BTU of energy in ethanol–a 34% increase, not the 60% increase stated above. In terms of liquid fuels, for each BTU input of diesel or gasoline, we get 6 to 8 Btu of ethanol energy. However, we use a lot of natural gas and coal to provide the balance of energy. The results depend upon how one apportions the energy content of the fuel versus the co-products–thus there is some uncertainty in estimates.
This report is obviously pro-corn ethanol, but it makes a good case that there is a small net gain from ethanol. In the conclusions we find a rosy picture painted for the future according to this report, because the inputs will all improve as they are subject to discipline by market forces — exactly what we have shielded ethanol production from. The advocates never see such irony. I doubt this will actually come to pass, because if we try to replace any large fraction of liquid fuels with corn ethanol we will have to begin using marginal farmland and so average corn yields will decline.
Regarding the claim that ethanol as a transportation fuel is always cleaner than the fuels it replaces, note that ethanol increases the volatile portion of gasoline, and leads to increased air pollution (haze in this case) from unburned hydrocarbon.
>> jabre says:
December 28, 2011 at 7:22 am
Don’t forget the subsidies of oil. <<
Please list the subsidies of oil … and not just some link to a WWF type website.
How much do they amount to per gallon of fuel? Compare them to the per-gallon subsidies of ethanol. A quick back of the envelope calculation has the US producing 13 billion gallons of ethanol for a $6B subsidy, or just under $0.50 per gallon. I doubt that the oil company 'subsidies' come close to that.
Jabre, so the price of hay for my horses goes up? It’ll be beer for my horses before I know it.
Seriously, the cost of hay for livestock can force many small producers to “sell out” quickly. Selling out means that they lose the agricultural tax exemption on their property, causing them to lose the property, which then get’s purchased by developers who turn it into an exurban neighborhood. I’m seeing it happen before my eyes. The only thing stopping this eventuality for some is a Haynesville shale gas lease agreement, or if the owner is a minority family that has had the property title handed down since US Reconstruction and the title is claimed by so many heirs as to make the clearing of the title nigh on impossible.
Dang, as i clicked “Post Comment”, I realized the lack of clarity in my previous comments. The US Reconstruction property that was granted to freed slaves is somehow maintained as long as inheritance is passed down through the family. I’m not sure how property taxes are handled when the title is distributed amongst heirs which may be scattered from coast to coast. Property taxes may not even apply to land titles that reach back to Reconstruction private property grants. Please don’t take this to be a crass or heartless, mean spirited remark. This situation applies to properties all across the southern USA.
Presumably when A. Scott said “It takes appx 1 BTU of energy to create appx 1.6 BTU of ethanol energy using corn processes. It takes appx 1 BTU of energy to make 6 to 8 btu using cellulosic processes.” he is not suggesting creating energy from nothing.
He means it takes 1 BTU of fossil energy plus an large amount of solar energy to create the 1.6 or 6-8 BTU’s of ethanol energy. Here’s a similar example: when I cut down a tree and burn it in my wood stove the energy I used in my chainsaw (including manufacturing and maintenance) and my splitter was far less than the heat energy I created when I burned the wood (including stove losses).
The ethanol lobby has been out in full force on every site that I have seen an article on the ethanol industry. It happened here on WUWT about a year or so ago. I don’t remember the thread title but I remember the boiler room tactics of copy and paste, thread hijacking, misinformation, etc. A couple of years ago the same tactics were used on theoildrum.com but were decisively debunked. One of the articles there investigated the Energy Returned on Investment (EROI) of corn ethanol. It is NEGATIVE. I guess that energy experts are much better suited to smackdown claims made by ethanol advocates more so than those knowledgable in climate issues.
A Scott, there are so many holes in your posts here that I will not waste my time with you. Your boiler room of advocates are surely here now and will come to your rescue if need be. That is the way your ilk has operated in the past and I am sure will continue to do so. Your lobby has too much $$$$ at stake.
I will toss a couple of ideas for you /yours to chew on.
Cotten to corn plantings?
EROI?
Reduced MPG equal to or greater than the ethanol volume included (Leave out the 10 – 15% ethanol and use gas and gain 10 – 35% depending on the engine) ?
Drop in water tables for irrigation?
Fertilizer runoff?
The numbers you cite in you post?
You are either very misinformed or a troll for the ethanol lobby. I will bet the latter.
This is the limit of my time that I will waste with you.
Making ethanol from sugar cane is seven times more efficient than making ethanol from corn.
So Red Green’s the guy behind all this, eh? Now it all makes sense….
Cripes! The formatting occasionally trips me up.
You repeat all of the fallacies about global trade, oil marketing, and oil production that I can think of. We will never redirect the $252 B that goes into the purchase of imported petroleum–never–or at least not with ethanol. We cannot grow enough corn in the U.S. to replace more than 20% of our liquid fuels demand, and to get even to this level would lead to environmental issues you could not tolerate. The better path would be to use enhanced oil recovery on our own reserve, and import Canadian heavy oil to refine and export as higher value fuels (i.e. Keystone pipeline), but I’m certain you cannot tolerate any of this based on the other shibboleths you repeat.
The subsidies of the oil industry you quote are just wild guesses (WAGs) that do not stand up to any scrutiny, and the $480 per barrel figure you quote–well LOL, where does that implied subsidy of 20 MBBL per day times $480 = $9.6 B per day come from? (that’s 3.5 trillion dollars per year).
According to your economic fallacies we would be better-off to close our borders and just recycle and re-tax all dollars right here in some unspecified activities. Does it ever occur to you that as we alter completely huge portions of our economy and world trade, that there will be less work and lower pay all around?.
Shh! Youa no harsha the buzz.
No matter where the magic extra energy comes from, if you can get a gain of 60% in BTUs then you can make a 60% profit or plow your product back into the process making the same gain with each cycle. It follows then that, after the input of one non ETOH BTU the ETOH cycle will, eventually, produce an infinite number of ETOH BTUs. If this is the case then there is no need for subsidies or any other source of energy, ever. If it is not the case then ETOH will need subsidies to support its production and will not improve or even replace our “fossil fuel” energy production.
“Sorry – it has also been repeatedly shown that any impact on food prices is exceedingly minuscule if any – the vast majority of food price increases are the result of speculators/speculation.”
=========================================================
That’s demonstrably untrue. Go here….. http://www.ers.usda.gov/Briefing/Corn/Gallery/Background/CornUse.jpg Nearly 1/2 of the corn produced today goes to our fuel tanks. Now go here and compare both graphs at about the 2006 mark. http://www.ers.usda.gov/Briefing/Corn/Gallery/Background/CornPriceReceivedAndProduction.jpg
But, we’re only talking about corn. What’s going on with our other food stuffs?
Here’s some planted acreage data…..
Corn, 86.0, 86.4, 88.0, 90.0,
Sorghum, 8.3, 6.6, 7.0, 7.0,
Wheat, 63.2, 59.1, 55.0, 56.0,
Rice, 3.0, 3.1, 3.1, 2.8,
Soybeans, 75.7, 77.5, 76.5, 73.5,
Barley, 4.2, 3.6, 3.6, 3.6,
Oats, 3.2, 3.4, 3.4, 3.4,
These are for years 2008-2011 if the formatting doesn’t hold, I separated the values with a comma. Every crop but oats have decreased in acreage planted since ethanol has revved up. But, that’s not the only place where we feel the impact. As the story states, ranchers are against ethanol as well, why? Because is caused feed to become too costly. We’re back to sneaking calves onto other peoples cattle trailers in the winter. For an .xls spreadsheet go here. http://usda01.library.cornell.edu/usda/ers/94005/2010/Table17.xls
So, the rise in food prices isn’t related to increase in non-food and feed use? It isn’t related to the decrease in other foods acreage planted?
Quando Omni Flunkus Moritati
Seriously, a guest post on ethanol (with references and links to data) by A. Scott would be welcomed.
Biofuels make sense if the benefits outweigh the costs, of course. However, it’s necessary to count everything in the equation.
And it should be done without subsidies and gov’t interference.
Starzmom @ur momisugly5:54
You are right. There is no difference in the corn raised for corn sweetener, animal feed or for ethanol. Americans ususally don’t eat field corn. We use it in lots and lots of stuff, but we don’t pick it and eat it on the cob or frozen from the grocery store. We eat sweet corn, which only goes for other purposes when it is too ripe to be enjoyed on the cob. Sweet corn plants are smaller and so are the ears of corn, so there is not a whole lot of value to harvest the plants for silage or the corn for feed. You make your money as corn on the cob, and dry corn stalks for Halloween decorations. Otherwise you leave the rest to feed the cows that graze down the stalks or for any local wildlife to enjoy.
Latitude @ur momisugly 7:01
Usually, if an ethanol plant needs corn, they can get it two different ways. They might contract corn direct from the farmer, for example, for 1,000 bushels of corn. But the farmer might grow 2,000 bushels, and he will then sell or use the non-contracted corn however he wants to. The other way the ethanol plant might get corn is to contract directly with the local grain elevator. Either way, the farmer is going to grow his corn so that it can be sold anywhere, and he is not going to use extra chemicals in raising that corn, just to get rid of some extra chemicals he has laying around. I was at the bank the other day and a local farmer was making small talk with the bank teller, and he said that he had $100 per acre of inputs in raising his corn crop this year. We live in a marginal corn area- not as much rain as in the midwest, so his yields were lower than what a midwest farmer might get.
The only reason I see for relaxed chemical allowances is to allow imports that might not be as regulated as domestic corn is.
You only provided part of the information and out of context. The Reid Vapor pressure of gasoline ethanol mixtures is not linear with the percentage of blend. In fact the highest Reid Vapor pressure occurs at low ethanol blends. At higher ethanol blends Reid vapor pressure actually drops significantly below that of straight gasoline. The highest RVPs were observed with relatively low concentrations (5-20%, v/v), the non-ideal mixtures then drop and flatten out their vapor pressure over a large range of mixtures.
http://saefuel.saejournals.org/content/1/1/132.abstract
The effect you refer to also depends on the specific blend of gasoline the ethanol is added to as well. This was one of the issues with fuel ethanol added in California. Some of the fuel blends that they used in their reformulated blends, when mixed with ethanol added blends from out side the area had significantly higher evaporative emissions than either blend alone. This was a problem until MTBE was outlawed as an oxygenate due to its propensity for contaminating ground water from leaking fuel storage tanks. Now that ethanol added oxygenate is the dominant blend this issue has largely disappeared.
Larry
To those of you commenting about the creation of energy, you do realize that energy is coming from the sun, it isn’t actually being created. Don’t be intentionally obtuse.
I can’t stand this statement going un-examined.
To eliminate speculators in a market reduces liquidity. If you reduce liquidity in a market then what occurs is that trades cannot be made until rather large swings in price occur. In effect you reduce the ability to complete trades at small increments of price and increase market volatility. If you limit trading activity to only those who take physical delivery of commodities, then you no longer have a futures market, but rather only a forward contracts market. Such market is not much different than barter and is costly and inefficient. Moreover, even people who deal in the commodity do not always take delivery, but would like the insurance provided by hedging that only a liquid futures and options market can provide. Finally, proof that futures markets with speculators to provide liquidity reduces volatility comes from an analysis of the onions futures market which existed in the 1950s but does no longer. Please stop repeating the left-propaganda about speculators and markets.
1.6 > 1.0. If you can turn 1.0 schmeckels into 1.6 schmeckels then you have a .6 schmeckel gain. Plowing the schmeckles back into the schmeckel cycle will, over time, provide you with an infinite number of schmeckels for the cost of one schmeckel. Doodad subsidies don’t effect the schmeckle cycle because doodads have a gain of 1.0. If you put a doodad in you get one out so, you can subsidise doodads all day long without effecting the schmeckel. Because, as with any system with a gain of greater than one, the schmeckle is pure profit that only increases with time. This to say nothing of the groznik that has a gain of 6 to 8. The groznik is better than the schmeckel because the groznik cycle gets to infinity faster. So, let’s scrap schmeckels and go with the groznik and, instead of a subsidy, I would suggest that we collect a small tax on every groznik sold. After all the sale of infinity grozniks will produce infinite tax revenues freeing the workers of the world from paying them.