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
cwj,
What’s your point? There is a depletion allowance for both oil and water, among many other resources. It is an incentive to produce something that society needs.
Society does not need a corn ethanol subsidy. Nor does society need a corn ethanol mandate. Do you disagree with Congress eliminating the subsidy?
•
Kum Dollison,
Ethanol is not saving us money, it is costing us money.
Every DIME of tax paid by an oil company or any company comes from one single place – our pockets. Oil profits are at a record high and by no coincidence so was the amount of tax revenue collected on it. Big oil and big government are in bed together; reducing the supply increases price = more profit and .. more tax revenue.
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.
Nonsense.
Speculators do not consume any corn. Thus they have no effect on supply or prices over the medium to long term (approx 3 months+).
What speculators do is buy and sell over the short to medium term, Buying when supply is high and selling when supply is low. Thus the net effect of speculators is to reduce average prices over the short to medium term.
If this weren’t true speculators would lose money and quickly stop doing it.
Blaming speculators is the 21st century equivalent of blaming goblins and demons.
Field Corn has Never, Ever, been exported to feed “Poor People,” Anywhere.
Field Corn is, primarily, Cattle Feed. When Field Corn is Exported, it is Exported to be used as Cattle Feed.
The Beef is, then, eaten by Middle, and Upper Class Consumers.
If our exports are down a bit, it’s because the last two years have been Horrible “Weather” Years.
The fact still remains that we took 34 Million Acres OUT of Production between 2002, and 2007, even as ethanol production was ramping up. We Still Pay Farmers Not to Plant 30,000,000 Acres.
Zeke says: You are a sensible person, who cares for the poor…However if you are of the Malthusian kind you would not care about it, as you would consider yourself a privileged one destined to be among the 500 million people cool, gay, intelligent and of course liberal like you, chosen to survive once you finish your task of sending to a better life the pesky rest of 6,500 millions hard working and ugly smelling people.
However, don´t you think such a “Brave New World” will be boring?
To Jabre December 28, 2011 at 10:50 am
Clearly I did look at the report you referenced. Please don’t make accusations you know to be false.
The report you cite is so outrageously wrong it is comical. At one point they make the statement “We use 21 million barrels a day of oil. At $480 a barrel, that’s $10 trillion a year draining from the national coffers”. Do the math. That works out to $3.6792T per year. Still an absurd number, but far short of $10T. The rest of the report, including the derivation of the $480 per barrel figure, is just as wrong. The fact that you cite such drivel to prove your point only casts doubt on everything else you claim.
I’ll give you the benefit of the doubt and assume you did not read the report.
hotrod (larry L) says:
December 28, 2011 at 11:19 am
eyesonu says:
December 28, 2011 at 10:08 am
I knew the trolls were here and would come to A. Scotts rescue.
======================
Please read my earlier comments:
eyesonu says:
December 28, 2011 at 8:40 am
eyesonu says:
December 28, 2011 at 10:08 am
@ur momisugly “Hotrod’ — Seems you may have blown a headgasket and thrown a rod. You may have also spun a bearing and scoured your crank. Your head is obviously cracked and possibly dropped a valve or two. Check your oil pan for corn. Maybe all your issues are from corn in your oil pan.
Hotrod Larry,
I would NEVER get in an aircraft fueled with the ethanol slurry you describe (and quote from an ethanol industry propaganda site). My Dad had a Cessna 172 from the time I was 11 until my early 20s. I spent a lot of hours flying. One of the standard pre-flight checks you ALWAYS made was the fuel supply with a little cup. There were spring loaded drain valves on the low spots on the wings. If there was any water in the gas it would pool at these spots. You pressed on the valve and emptied a little gas into the clear cup. You could easily see if there was water in the gas because it isn’t miscible in avgas and would appear as little blobs at the bottom of the cup. Water in fuel tends to cause airplanes to fall out of the sky. Water is completely miscible in ethanol. I haven’t flown in small aircraft in many years but I have a lot of friends who are pilots and several who own planes. I will inquire about this ethanol avgas, but I suspect it’s mostly pro-ethanol propaganda and NOT in routine use. I know that E10 is a disaster for marine engines and small engines like lawn mowers, rototillers and chipper/shredders.
What I have not yet heard from any of our ethanol disciples is a legitimate defense of government mandated use and subsidies to prop up the ethanol industry. It’s a damned boondoggle. The entire industry cannot survive in the free market. By definition this means it is a non-viable technology. Just because it’s possible to run an airplane on the avgas equivalent of E85 doesn’t mean we should.
Smokey, ethanol may be costing “You” money (if you’re in the oil bidness,) but, for the life of me, I can’t see how substituting a lower priced product for a higher priced, in short supply, product could possibly be costing “Me” money.
Gasoline Prices (w/o ethanol) were the highest in history in 2011, as were oil prices (averaged over the year.) In spite of that, the World produced slightly less C + C (Crude + Condensate) than it did in 2005.
The Oil Company Folks can rant, and rave, and have published disinformation all they want, but we’re going to need all the help we can get, going forward.
BTW, the Cellulosic Tax Credit expires on Dec 31, 2012, so it’s not going to have any practical effect to speak of.
Kum Dollison says:
December 28, 2011 at 2:08 pm
“The Oil Company Folks can rant, and rave, and have published disinformation all they want, but we’re going to need all the help we can get, going forward. ”
Then please let the free marked do its work.
The cost of ethanol per gallon of fuel from sugarcane in Brazil, at $0.83 per gallon of fuel, is lower than the cost from corn in the United States, at $1.09 per gallon (see the OECD report “Agricultural Market Impacts of Future Growth in Production of Biofuels,” available athttp://www.oecd.org/dataoecd/58/62/36074135.pdf).
With oil, we clearly get far more energy from crude oil than goes into its production, shipping, refining and distribution, because we are not paying for the original creation of the oil millions of years ago.
For example, the world price of crude oil is about $100 per barrel.
It costs anywhere from $5-50 per bbl to drill, pump, and separate that oil. Middle east cost are lowest, deep water offshore and tar sands etc highest. Those costs include all energy costs and equipment costs.
It then costs $1-2 per bbl to store and ship that crude oil to refineries around the world.
Refining costs to turn that crude oil into refined products (gasoline, jet fuel, diesel etc) are around $2-3 per bbl. Add another $2-5 per bbl to get that product into your tank.
Similar cost structures exist for coal burnt in power stations, or wood or other plant materials. We get net energy gains.
The challenge comes when you try to take coal, or wood, or corn,and turn it into liquid fuels because the conversion costs are far higher.
1) It is clear that since there is no penalty for lying, honest debate is crowded out by dishonest. Arguing from authority doesn’t help because they “have an agenda.” Virtually this entire discussion is wheel-spinning, and every time someone tries to set up an independent arbiter it’s overrun by politics.
2) As a driver, I don’t like ethanol because of poor energy density, especially absent subsidies this kills it. It’s the same reason why hydrogen fuel has not and will not catch on (for the foreseeable future) absent draconian mandates. It’s just a terrible energy storage medium.
Chimes well with the latest plan from Cameron control centre in the UK
http://www.telegraph.co.uk/news/politics/david-cameron/8979765/David-Cameron-plans-minimum-alcohol-price-in-England.html
Next thing the poor will be back on the meths again.
To Kum Dollison says:December 28, 2011 at 1:51 pm
There are a couple of problems with your information.
From http://en.wikipedia.org/wiki/Field_corn
Large-scale applications for field corn include:[1]
Livestock fodder, whether as whole cobs (for hogs only), whole or ground kernels, or (after chopping and ensilage) the entire above ground portion of the unripe plant
Cereal products including breakfast cereals, corn meal, hominy and grits
Other processed human-food products including starch, oil, and sweeteners
Alcohol and corn whiskey
From http://www.usda.gov/nass/PUBS/TODAYRPT/acrg0611.pdf
Released June 30, 2011, by the National Agricultural Statistics Service (NASS), Agricultural Statistics Board, United States Department of
Agriculture (USDA).
Corn Planted Acreage Up 5 Percent from 2010
Soybean Acreage Down 3 Percent
All Wheat Acreage Up 5 Percent
All Cotton Acreage Up 25 Percent
Corn planted area for all purposes in 2011 is estimated at 92.3 million acres, up 5 percent from last year, and the second highest planted acreage in the United States since 1944, behind only the 93.5 million acres planted in 2007. Growers expect to harvest 84.9 million acres for grain, up 4 percent from last year.
Total cropland was down, as you say. See http://www.ers.usda.gov/StateFacts/US.htm. The reasons for the decrease in total cropland aren’t clear to me and I don’t have the desire to delve into it any further. The report cited needs lots of ‘splainin. I wonder why land in cotton was up 25%, for example.
In summary, acreage suitable for corn and in use for corn was up, not down, and people do eat field corn once it is processed.
There is no better place to see the ethanol insanity than Maryland.
The EPA has ordered the State of Maryland to remove some 10million lbs of nitrogen per year from the Chesapeake Bay at a minimum cost of $10bn not counting the disruption to development, agriculture and personal choice. Plus, Maryland’s largest agriculture segment is poultry which is being killed by grain prices. If we stopped ethanol there would be no need for the EPA directive to remove nitrogen and everyone including the environment would benefit other than EPA and the few people that feed from the ethanol trough.. The taxpayer is being told to pay for the ethanol subsidy and pay again for removing the nitrogen needed to grow it. (in addition to countless other costs)
As evidence lets use the most recent corn crop harvest for MD of 45.5 M bushels(bu) and use the average value of 1.5lbs of Nitrogen fertilizer per bushel of corn and we get 68.5M of N as the corn fertilizer usage. Assuming 40% of the corn is used for ethanol production and a nitrogen runoff of 30% we get 8.2M lbs of N from the requirement to use ethanol! Given that EPA is considering an order that may require a 45% reduction of N inputs for the Mississippi River basing- ethanol’s costs are going to get totally out of control.
Part of what has happened is the oil companies use lower octane (84) when they blend E10. As a result, you don’t get the benefit of Ethanol’s Higher Octane (114) that you get from blending it with standard 87 Octane Gasoline. That means you get the lower btu content w/o the advantage of ethanol.
It means they can produce it cheaper, but you pay more of a price in mpg.
If you want to reduce CO2 emissions, reduce imported oil, reduce (by a large amount) harmful vehicle pollutants, and BTW increase vehicle safety, switch cars to natural gas fueled.
Here in Western Australia most vehicles on the road are NG powered and the only reason there are still petrol and diesel powered cars and light trucks is, if you do low mileage the conversion cost doesn’t make economic sense.
If vehicle manufacturers would actually produce NG powered vehicles for about the same cost as petrol/diesel models, rather than waste billions on idiotic electric and hybrid vehicles, all vehicles except large trucks here in WA would be NG powered within a few years.
cwj says:
December 28, 2011 at 1:31 pm
In your opinion, everytime someone pays less than 100% of their income to the govt in taxes, they are being subsidized?
“Taking this 2 mbpd off of the global market would surely raise the price of gasoline, Substantially.”
You assume that this 2 mbpd is taking the place of gasoline.
Kum Dollison says:
December 28, 2011 at 2:08 pm
—
If ethanol is saving us money, why does it have to be subsidized and why does the govt have mandate it’s use?
If anything you wrote was accurate, people would be lining up to buy the stuff without any pressure from anyone.
“The reasons for the decrease in total cropland aren’t clear to me”
My guess would be floods in the mid-west and drought in Texas.
Kum Dollison says:
December 28, 2011 at 2:38 pm
octane has nothing to do with gas mileage.
Pressurized NG tanks are safer than gas tanks? You’ll have to cite some studies to convince me of that.
If we wanted to reduce oil imports we could drill for oil at much less cost.
@jabre I visited your link on the true cost of oil being $480 a barrell. The article was very unbalanced. Would you have a link to an article that gives both sides of the debate as to what should be included and what should not.
As an FYI the cost of maintaining the roads is covered by the taxes on fuel in most of Europe. Similarly oil companies pay governments a lot of money for the right to drill over here, unlike the free use of federal land that the article alleges.
I am genuinely interested so please give me a link.