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Ethanol: Congress, Mandates and the Law of Unintended Consequences
Posted by: McQ on Saturday, February 23, 2008

Congress has recently mandated the use of alternative fuels, specifically ethanol, in the latest energy bill to become law. In fact, it has specifically outlined both the amount and type of ethanol which must be produced. But as we will see below, that has and will continue to have some unintended consequences that will be difficult to argue are positive.

The Mandate

It essentially breaks down like this:

2008: 9 billion gal/year renewable fuel vs. prior rate of 5.4 bgy

2012: 15.2 bgy in 2012 vs. prior rate of 7.5 billion

2022: 36 bgy in 2022

So the mandate increases the amount of ethanol in the system by 4.6 billion gallons this year and to 15.2 billion gallons a year by 2012. By 2022, the mandate requires 36 billion gallons of ethanol production be on line and producing.

Corn-only ethanol is supposed to top out at 15 bgy in 2015 and remain at that level of production for the foreseeable future.

Advanced bio-fuels, bio-diesel and cellulosic ethanol, are supposed to make up the difference between the 15 bgy of corn-based ethanol and the final total of 36 bgy by 2022.

That all sounds perfectly wonderful; however, there are some real problems which will most likely cause this plan and its mandates never to come to fruition.

Technical Problems

As it stands at this very moment, the only ethanol product in production is corn based ethanol. Cellulosic ethanol, the great hope of the future, has many technical problems. As the American Petroleum Institute noted in a recent conference, “Significant technology breakthroughs are needed for economic production of ethanol from cellulosic biomass”.

In fact not a single cellulosic ethanol production site exists at this time and only now are there plans for a demonstration site. The “solution” for renewable fuel doesn’t even exist at this time, but is mandated, 8 years hence, to be in full production and pumping out 4.25 bgy of ethanol. At the moment a viable process to fulfill the mandate doesn’t exist. What does exist is a process which is price prohibitive on any scale.

Price problems

One of the promises of ethanol is to reduce Green House Gases (GHG). But the question becomes, at what cost? The technical problems with cellulosic ethanol have been touched upon. But that’s only part of the problem. Bio-diesel is primarily, at least at this stage, a soybean product. And obviously, the only ethanol we have available at the moment, other than that which we might import, is corn based. What has happened to both corn and soybean pricing recently? This chart from US News and World Report, based on Chicago Board of trade numbers, gives you an idea. The rise in prices you see have happened within less than 2 years.


Notes the USN&WR article accompanying the chart, the problem isn’t just the demand from ethanol and bio-diesel production which is driving up the price, but an apparently unanticipated demand brought on by economic prosperity in other parts of the world.
Higher global demand for meat—particularly from emerging nations—is another driving force behind the boom in commodity prices. As globalization has boosted the income of workers in industrializing countries like China and India, such populations have been able to afford to raise their protein intake by eating more meat. From 1980 to 2002, total meat consumption in developing countries nearly tripled.

Increased meat consumption has stoked agricultural commodity prices, since more grains are needed to feed livestock, says Ryan Davies, a senior trader at Titan Commodities. "Literally 2 billion people are going from a grain-based society to a meat-based society," Davies says. "It takes a lot more grains to feed a cow than it does to feed a person."

This trend should continue to influence agricultural commodity prices, with the United Nations anticipating global meat production to more than double from 2001 to 2050—that's roughly twice the projected rate of world population growth for that period.
So again, we’re caught in a Catch-22 where demand for a commodity we now see as critical to breaking our dependence on foreign oil is also a commodity in much more demand by other parts of the global economy. Thus prices, as the two areas compete for more and more product, will continue to rise.

Benefits

Last but not least are the arguments about the real benefits of ethanol to our goals of reduced GHG and providing an alternate fuel to help break our dependence on foreign oil.

In terms of reducing GHG, the real effect, according to a couple of new studies recently carried in “Science” is that ethanol production may actually increase emissions.
These studies for the first time take a detailed, comprehensive look at the emissions effects of the huge amount of natural land that is being converted to cropland globally to support biofuels development.

The destruction of natural ecosystems — whether rain forest in the tropics or grasslands in South America — not only releases greenhouse gases into the atmosphere when they are burned and plowed, but also deprives the planet of natural sponges to absorb carbon emissions. Cropland also absorbs far less carbon than the rain forests or even scrubland that it replaces.

Together the two studies offer sweeping conclusions: It does not matter if it is rain forest or scrubland that is cleared, the greenhouse gas contribution is significant. More important, they discovered that, taken globally, the production of almost all biofuels resulted, directly or indirectly, intentionally or not, in new lands being cleared, either for food or fuel.
Of course that applies to both corn or cellulosic based ethanol.
“When you take this into account, most of the biofuel that people are using or planning to use would probably increase greenhouse gasses substantially,” said Timothy Searchinger, lead author of one of the studies and a researcher in environment and economics at Princeton University. “Previously there’s been an accounting error: land use change has been left out of prior analysis.”

These plant-based fuels were originally billed as better than fossil fuels because the carbon released when they were burned was balanced by the carbon absorbed when the plants grew. But even that equation proved overly simplistic because the process of turning plants into fuels causes its own emissions — for refining and transport, for example.

The clearance of grassland releases 93 times the amount of greenhouse gas that would be saved by the fuel made annually on that land, said Joseph Fargione, lead author of the second paper, and a scientist at the Nature Conservancy. “So for the next 93 years you’re making climate change worse, just at the time when we need to be bringing down carbon emissions.”
And what of its ability to break our dependence on foreign oil? Well, that too is quite debatable, because there’s that little discussed fuel economy penalty, which averages about 26%. That’s because ethanol, while having a higher octane that gasoline, has a lower energy content. The debate isn’t about whether or not ethanol has the lower energy content, but how much that lower content is:
The National Ethanol Vehicle Coalition and others believe that the fuel economy penalty is in the neighborhood of 10 - 15%.

Data collected and published by the EPA and DOE and by Consumer Report suggest that the fuel economy penalty for most FFVs operated on E85 averages about 26% with a range from 21% to 35% in 2007.
So accepting the 26% for the sake of argument, what does that mean in terms of real cost for E85 gasoline (gasoline typically mixed with 15% ethanol)?
Given the above cited average fuel economy penalty of 26% for a model year 2006 or 2007 FFV [Flexible Fuel Vehicle] operated on E85, this means that on a cents per mile basis, the retail price of a gallon of E85 would have to be 26% less than the retail price of gasoline in order for the fuel operating costs on E85 to be comparable with those on gasoline.

With an E85 fuel economy penalty of 26%, an FFV operator would have to refuel about 4 times with E85 for every 3 times that that it would fill up with gasoline. The ability to handle these extra fill ups would require the fuel handling infrastructure (delivery tanks and carriers) to increase capacity by 35 - 36%.
Or to break it down into numbers that are understandable for everyone:
The retail gasoline price average for Sunday 1/28/2007 was $2.143 per gallon according to the AAA website. Using this price, E85 would have to retail for $1.59 in order for the fuel operating costs on E85 to be comparable with those on gasoline.
A buck fifty nine a gallon? Not in this lifetime. Obviously as those figures are a year old and we’d kill for $2.14 a gallon gas, those figures aren’t valid anymore, but the proportional reduction remains valid. And, given the cost of producing ethanol right now, hardly a product that will gain for us the economies necessary to break our dependence on foreign oil. In fact, it can be argued that because of the fuel economy penalty, we might end up using more. And that is especially true if this outlook remains valid:
Don't expect most agricultural commodities to come back to Earth anytime soon, as global demand for grains remains strong and new federal policy measures mandate more biofuel use. Newsom says corn futures could increase by as much as 25 percent by the end of 2008, and soybean prices could go up by slightly more than that. Wheat remains the wild card—if farmers can move past the weather-related problems that hobbled production in 2007, wheat prices could pull back, Newsom says.

But while individual crop prices may stray from projections, one thing appears certain: "The maintaining of historically high prices is most likely here for at least a few years," says Randy Mittelstaedt, the director of research at R.J. O'Brien, a commodities and futures brokerage firm. "Global demand is strong, U.S. demand is strong...and we are looking at just a huge increase in demand on the ethanol side."
It appears that instead of reduced GHG and less dependence on foreign oil, the recent Congressional ethanol mandates may end up producing more GHG, more dependence on foreign oil and, as a special bonus, higher food prices as well.
 
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No surprises here. Market economies allocate resources far more efficiently than do command and control economies. Politicians of all stripes and at all levels have bought into the command and control thesis simple because it makes them more powerful and the public has bought in because they don’t trust Adam Smith’s invisible hand. Well, that and the public has swallowed the elixir of global warming because it makes it seem as though ordinary citizens can actually make a difference and in our hollow, secular lives making a difference is a powerful religious experience. We know where this leads. The question, for those of us who really want to make a difference is what, if anything, can be done to forestall the dreadful damage that awaits? Does anyone have any ideas?
 
Written By: OregonJon
URL: http://
Of course that applies to both corn or cellulosic based ethanol.
The clearance of grassland releases 93 times the amount of greenhouse gas that would be saved by the fuel made annually on that land, said Joseph Fargione, lead author of the second paper, and a scientist at the Nature Conservancy. "So for the next 93 years you’re making climate change worse, just at the time when we need to be bringing down carbon emissions."
Assuming the 93 year number is correct, celluousic ethanol should not be lumped in with it. Cellulousic processes produce about 1/6 as much Net C02 as sugar based processes. The gain over gasoline is probably close to a factor of 6 as well, meaning that 93 years becomes 15 years. That’s assuming the 93 year number is true.

I’m not shocked ’environmentalists’ are turning on bio-fuels. Now that we’re closer to using them on a wide-spread basis, we find the actual impact to cars is negligible. A 20-25% bigger tank and you wouldn’t know the difference at all. Hybrids on the other hand add $5000-10000 to the cost of a car for 20-25% increase in fuel economy. You can gain more fuel economy if you compromise the hybrid even further in terms of features, but all other things being the same in terms of styling, features, etc the gain is about 25%. Your new car can run ethanol for about $200-300 worth of different materials that can hold up to the chemical composition. Even less now that cars have to cope with E10 anyway.

That’s why Hybrids are still cool to environmentalists but ethanol isn’t. Environmentalists claim to be all for alternatives. But some are really only for them if they add cost to the car or shrink cars and reduce features. They really want to see the car become less fun and more expensive. Eventually you will not want the hassle of a car at all except perhaps a sub-compact butt hauler. Even better you will take the bus. So many of them may tout alternatives, the only real acceptable alternative is the ’bus’ to them.

I personally don’t believe in global warming so I’m not concerned about the time it takes to payback the one-time C02 cost associated with ethanol production as long as it gets me a competitor to gas.

As for Ethanol as a marketable competitor to gasoline, we’re already wishing for $2.15 gasoline. A year from now, from what I can tell we could be stalking $4 gas. There appears to be no limit.


 
Written By: jpm100
URL: http://
Assuming the 93 year number is correct, celluousic ethanol should not be lumped in with it. Cellulousic processes produce about 1/6 as much Net C02 as sugar based processes. The gain over gasoline is probably close to a factor of 6 as well, meaning that 93 years becomes 15 years. That’s assuming the 93 year number is true.
I don’t think that’s the point:
The clearance of grassland releases 93 times the amount of greenhouse gas that would be saved by the fuel made annually on that land ...
 
Written By: McQ
URL: http://www.QandO.net
I have worked for many years in a paper mill that shut down in December....... many reasons........ but a big one was the upsurge in the price of corn starch. We used many tons of corn starch a month..... and the price in the last year or so went through the roof....unintended consequences indeed........corn production diverted to the making of ethanol........ we had a huge push to reduce energy costs...... and we were doing one hell of a job....... but saving a dollar in steam and losing a dollar ten in starch just didn’t make it..
oh well.....life goes on
 
Written By: darohu
URL: http://
The clearance of grassland releases 93 times the amount of greenhouse gas that would be saved by the fuel made annually on that land ...
That’s a one time release of C02. Its not 93 times a year every year.
 
Written By: jpm100
URL: http://
That’s a one time release of C02. Its not 93 times a year every year.
Right. The payback or break-even point for the ethanol produced from what is grown on that land is 93 years.
 
Written By: McQ
URL: http://www.QandO.net
But it can’t possibly be same payback period for both cellulosic and sugar based ethanol. Their processes produce net C02 at substantially different rates. Like a factor of 4 or more.

The reason for the long payback period is that production and final use of sugar based ethanol, the C02 emissions in terms of gas is somewhere between 80-100% a reduction of 0-20%. The cellulosic process puts the C02 emissions relative to gas at about 15%, a reduction of 85%.
 
Written By: jpm100
URL: http://
Only Congress could tax us to develop a less efficient, more costly fuel whose production consumes as much or more fossil fuel as it replaces, requires new infrastructure and drives up our food prices.
 
Written By: Arch
URL: http://
Time to check out Robert Zubrin’s Energy Victory, which deals with the demand side of the biofuels equation.

He notes that we can produce lots of ethanol, but right now our vehicle fleet isn’t set up to consume it. His brief for ethanol and methanol isn’t focused on climate change, but on the notion of drastically reducing our oil imports, and thereby reducing the amount of money we send to Hugo, Mahmoud, and their unlovely associates.

He recommends that we mandate that our vehicle fleet become capable of burning gas, ethanol and methanol in any mixture, at a cost (he claims) of a few hundred dollars per (new) car. Consumers can then decide which fuel they want to burn. Zubrin expects biofuel mixes to be significantly cheaper than gas, even without the misguided production subsidy and tariff now in place.

Dump CAFE standards, forget about windfall profits taxes, and lose those stupid subsidies. This very simple step will, over the 15 years or so that it takes to turn over the fleet, drastically transform our economy and liberate our foreign policy from its energy obsession at very low cost and with minimal intrusion into consumer choices. They can even maintain their gas-guzzling membership in the hate-America support fund if they so choose...
 
Written By: Larry
URL: http://
Larry,

To put is as diplomatically and charitably as I possibly can, Zubrin is an ignorant tool. His idea that ethanol is the solution to the energy problem is a classic example on the underpants gnomes approach to problem solving.

The Underpants gnomes have a three-phase business plan, consisting of:

1. Collect Underpants
2. ???
3. Profit


Except his idea is

1. Mandate flex fuel
2. ???
3. All of our energy problems are solved.

He completely ignores the overwhelming evidence that ethanol is an enormously destructive boondoggle that is likely to make our energy security situation worse.

One small example of the destruction ethanol advocates like Zubrin are causing can be found at the linked article.

But their common contentions are that the focus on corn-based ethanol has been too hasty, and the government’s active involvement—through subsidies for ethanol refiners and high tariffs to keep out alternatives like ethanol made from sugar—is likely to lead to chaos in other sectors of the economy.

Everybody needs to remember that We are using around 16% of the corn crop to replace (at the very most) 3% of current US gasoline usage. If we scale that up it would take 96% of our current corn crop to replace less then twenty percent of the us gasoline.

Ethanol is a energy problem, not an energy solution.
 
Written By: TJIT
URL: http://
Now to the inevitable posters who are going to point to biofuel production from, switchgrass, or biomass, or algae bear in mind the term for all of these technologies is vaporware. Lots of publicity but little evidence that they are viable solutions that will ever make it to market.

It is lunacy of the highest sort for the government to mandate a technological solution to a problem until there is clear evidence that the technology will actually work.

Which is the exact opposite of what they have been doing with ethanol.
 
Written By: TJIT
URL: http://
Why do we keep electing the same morons to Congress? The US put a man on the moon and developed numerous new technologies that have made the world better—-so how is it we can’t find a new energy source? Take the silly tax rebate (which is nothing more than another dose of crack for the spendthrift debt addicts) and offer it as a prize to stimulate entrepreneurial creativity for God’s sake. That part is not rocket science!

There is no doubt in my mind that this ethanol ’mandate’ will end badly. My main concern is that diverting a basic foodstuff like corn will eventually result in far worse than inflation or more GHG...it has the potential to cause food wars.
 
Written By: Unscripted Thoughts
URL: http://
Fuels vary in their energy. A gallon of gasoline contains 125,000 BTUs. Ethanol, only 87,000 BTUs - 33% less. If we only see a 10% to 15% mileage penalty (which I question) we must be getting less performance.

To produce and distribute a gallon of corn based ethanol, we burn 0.75 to 1.5 gallons of fossil fuel. The farmer must plow his field, fertilize, plant and tend the corn, harvest the crop, truck it to the distiller who uses energy to distill it into ethanol. Since ethanol cannot be piped in, the distiller must distribute it to points of sale via tanker truck.

For decades, Southern farmers have had a better idea. Just burn the fossil fuel in your vehicles and drink the ethanol. You won’t care about the wasted energy or the pollution.
 
Written By: Arch
URL: http://
In fact not a single cellulosic ethanol production site exists at this time and only now are there plans for a demonstration site.
Not true, China has one churning out ethanol.

http://en.wikipedia.org/wiki/Cellulosic_ethanol
 
Written By: TallDave
URL: http://deanesmay.com
To produce and distribute a gallon of corn based ethanol, we burn 0.75 to 1.5 gallons of fossil fuel.

True, but misleading. You would be very happy to trade the energy equivalent in ethanol for coal, because ethanol, as a liquid fuel, is much more valuable (hence the high price of oil).

The actual ratio of liquid fuel to output is 1:5.

I can understand people being skeptical, but remember: Brazil imports essentially no oil. Yes, sugarcane is higher-energy, but corn and switchgrass are workable.

Also, Uncle Sam is throwing billions at cellulosic ethanol. If we can get that working, we can break OPEC forever and no longer fund terrorists via Iran and Saudi Arabia.
 
Written By: TallDave
URL: http://deanesmay.com
According to NASA, each year 168 billion metric tons (BMT) of CO2 are deposited in the atmosphere. 100 BMT come from the oceans, 30 BMT from decaying biomass, another 30 BMT from respiration. 8 BMT are man made. Of that amount, only 6 BMT are as the result of burning fossil fuels. If we stopped using all fossil fuels, CO2 emissions would only decline by 3.6%.

In terms of the green house effect, water vapor is by far the most abundant and most effective green house gas - a thousand times more effective than CO2. Unfortunately, the effects of water vapor are difficult to simulate and model so Dr. Michael E. Mann’s models ignore it. The acknowledged father of Climatology, Dr. Reid Bryson makes these statements:

"In the first 30 feet of the atmosphere, on the average, outward radiation from the Earth, which is what CO2 is supposed to affect, how much [of the reflected energy] is absorbed by water vapor? In the first 30 feet, 80 percent...

"And how much is absorbed by carbon dioxide? Eight hundredths of one percent. One one-thousandth as important as water vapor. You can go outside and spit and have the same effect as doubling carbon dioxide."

 
Written By: Arch
URL: http://
He completely ignores the overwhelming evidence that ethanol is an enormously destructive boondoggle that is likely to make our energy security situation worse.


No, he doesn’t. He addresses it head-on and annihilates it.

The main study claiming this was by Pimentel and has been widely debunked (the costs used were way way too high, and used very flawed assumptions). Pimentel himself is a Malthusian extremist who has said we need to reduce the U.S. population to 100M.
 
Written By: TallDave
URL: http://deanesmay.com
What has happened to both corn and soybean pricing recently? This chart from US News and World Report, based on Chicago Board of trade numbers, gives you an idea. The rise in prices you see have happened within less than 2 years.
Guys. Come on. Have you forgotten how free markets work?

What happens when the price of a commodity rises? People produce more of it. We’ll vastly expand our ag base.
 
Written By: TallDave
URL: http://deanesmay.com
TallDave,

I’m sure as soon as you get acquainted with the facts on the ground you will also realize what a boondoggle ethanol is.

Let look at a few of your statements (in blockquotes).
I can understand people being skeptical, but remember: Brazil imports essentially no oil.
Brazil imports no oil because they are a world class oil producer, ethanol has little to do with it.

Brazilian President Luiz Inacio "Lula" da Silva didn’t celebrate the oil independence milestone out in an Amazon sugar field.

No, he smashed a champagne bottle on the spaceship-like deck of Brazil’s vast P-50 oil rig in the Albacora Leste field in the deep blue Atlantic. Why? Brazil’s oil independence had virtually nothing to do with its ethanol development. It came from drilling oil.
Yes, sugarcane is higher-energy, but corn and switchgrass are workable.
You are ignoring the biggest difference in ethanol production between Brazil and the US, weather and growing seasons. Brazil is tropical and can grow crops year round, the US not so much. The snow on the ground in the US kind of cuts down on the growing season.

You assert that "corn and switchgrass are workable." which is not backed up by the facts on the ground.

First with corn you ignore the fact that we are using around 16% of our corn crop to replace (at the very most) 3% of current US gasoline usage. Scale that up and it turns out that it would take 96% of our current corn crop to replace less then twenty percent of the gasoline we currently use.

I don’t think that qualifies as "workable".

With regards to switchgrass one pilot plant in China is light years away from showing that switchgrass is a workable fuel source. Don’t forget that all of that biomass will have to be harvested, hauled to the plant, and processed using petroleum or coal which makes for a tough energy balance situation.
Also, Uncle Sam is throwing billions at cellulosic ethanol.
Uncle Sam has been throwing money at ethanol for 27 years. It has kept the corn growers and ethanol producers happy but that is about all Uncle Sam’s money has purchased.
 
Written By: TJIT
URL: http://
TallDave you also said,
Guys. Come on. Have you forgotten how free markets work?

What happens when the price of a commodity rises? People produce more of it. We’ll vastly expand our ag base.
That flatly is not going to happen. There are already too many natural constraints on the productive base.

Water is a big one.


Thanks to the boom in ethanol production spurred by green-energy concerns, corn farmers in Yuma County—one of the top three corn-producing counties in the country—are enjoying a new prosperity.

But the green-fuel boom touted as a clean, eco-friendly alternative to gasoline is proving to have its own dirty costs. Growing corn demands lots of water, and, in eastern Colorado, this means intensive irrigation from an already stressed water table, the great Ogallala Aquifer. One sign of trouble: in just the past two decades, farmers tapping into the local aquifers have helped to shorten the North Fork of the Republican River, which starts in Yuma County, by 10 miles. The ethanol boom will only hasten the drop further, say scientist and engineers studying the aquifers.


I really wish ethanol boosters would take the time to learn about the facts on the ground. If they do they too will understand how much of a destructive boondoggle current ethanol policy is.
 
Written By: TJIT
URL: http://
The worst thing about the ethanol boondoggle is the horrible impact it is having on poor people in the third world.

Now, for any investor who is long on commodities right now (and I would guess that club includes Goldman Sachs), such trends might seem to smack of good news. For anybody who is dirt poor in the developing world, however, the picture is disastrous.

A WFP official, for example, recently showed me the red plastic cup that is used to dole out daily rations to starving Africans – and then explained, in graphically moving terms, that this vessel is typically now only being filled by two-thirds each day, because food prices are rising faster than the WFP budget.


Burning food for automobile fuel is criminally stupid and is likely to develop into a humanitarian train wreck.

I wish more people had information like this available to them. It would end the support for current US ethanol policy which is driven by wishful thinking and lack of information about how ethanol actually works.
 
Written By: TJIT
URL: http://
On a practical note if you want ethanol and biomass to have a chance of commercial success here is a way forward.

1. End all mandates and subsidies. If ethanol can’t survive after 20 + years of subsidies and mandates it is simply not a viable replacement for petroleum.

2. Take a couple years worth of ethanol subsidy money and use it to fund an x style prize to be given to the group that comes up with a biofuel process that does not require subsidies, or mandates.

That might get us to a workable biofuel system.
 
Written By: TJIT
URL: http://
I can understand people being skeptical, but remember: Brazil imports essentially no oil.
Brazil imports no oil because they are a world class oil producer, ethanol has little to do with it.
The United States is the #3 oil producer in the world; Brazil is only #13. And yet, 20 years ago Brazil imported 80% of its oil while we imported 30%. Today we import 70% and Brazil imports none.

http://www.infoplease.com/ipa/A0922041.html

And ethanol has quite a lot to do with it.

Today, Brazil gets more than 30% of its automobile fuels from sugar cane-based ethanol.[2]

http://en.wikipedia.org/wiki/Ethanol_fuel_in_Brazil
First with corn you ignore the fact that we are using around 16% of our corn crop to replace (at the very most) 3% of current US gasoline usage. Scale that up and it turns out that it would take 96% of our current corn crop to replace less then twenty percent of the gasoline we currently use.

I don’t think that qualifies as "workable".
In fact it does. Ag yields overall have been increasing by 2% a year for a very long time. Add the incentive of current prices and doubling our corn crop is only a question of "how long?"
That flatly is not going to happen. There are already too many natural constraints on the productive base.

Water is a big one.
That’s exactly what the Malthusians and Club of Rome said; we were all supposedly to be starving from overpopulation by now because we couldn’t grow enough food. It’s just as untrue now as it was then. And dryland farming gets better all the time.

http://en.wikipedia.org/wiki/Dryland_farming
With regards to switchgrass one pilot plant in China is light years away from showing that switchgrass is a workable fuel source
Either it works or it doesn’t. If one pilot plant produces fuel at a competitive price, then it works.
Don’t forget that all of that biomass will have to be harvested, hauled to the plant, and processed using petroleum or coal which makes for a tough energy balance situation.
But the entire plant can be used, so the energy equation is actually about 4 times better than corn ethanol. Also, keep in mind, much of that biomass has negative value: people actually pay you to take it away.
The worst thing about the ethanol boondoggle is the horrible impact it is having on poor people in the third world.
Exactly the opposite is true. Third World subsistence farmers, who can’t do anything but farm, finally have a market for their crops, instead of having their crops made worthless by food "aid" which is stolen by kleptocrats and doled out on the basis of loyalty.
I’m sure as soon as you get acquainted with the facts on the ground you will also realize what a boondoggle ethanol is.
...
I wish more people had information like this available to them. It would end the support for current US ethanol policy which is driven by wishful thinking and lack of information about how ethanol actually works.
...
I really wish ethanol boosters would take the time to learn about the facts on the ground. If they do they too will understand how much of a destructive boondoggle current ethanol policy is.
Oh, the irony.

 
Written By: TallDave
URL: http://deanesmay.com
Zubrin’s plan is essentially to make the consumer have easy substitutes, sort of like coffee and tea as hot cafeinated beverages. If the whole USA only had coffee makers and only drank coffee, the price of coffee would be higher than it is with the existence of tea.

Note also, we could import ethanol produced by sugar cane. Wouldn’t you prefer to let Haiti/Brazil/other tropical countries get some of our money than the Saudis?
 
Written By: Harun
URL: http://
Good luck TallDave. You’re not going to find too many people promoting ethanol here.

In fact not a single cellulosic ethanol production site exists at this time and only now are there plans for a demonstration site.
Range Fuels

Thus prices, as the two areas compete for more and more product, will continue to rise.
Yep. Which, as free market economics will tell you, will spur more innovation and development in better utilising these products given the constraints present.

In terms of reducing GHG, the real effect, according to a couple of new studies recently carried in "Science" is that ethanol production may actually increase emissions.
Note the "may". Despite all the hooplah, there’s nothing new in that report.

A buck fifty nine a gallon? Not in this lifetime.
Coskata says they already have that beat. Not that I believe them, but it is possible. Unless you’re 93 years old or something, that "not in this lifetime" bit is probably wrong.

But while individual crop prices may stray from projections, one thing appears certain: "The maintaining of historically high prices is most likely here for at least a few years,"They’re only historically high because real prices for grains have fallen for decades.
Besides, rising grain prices means lower subsidies!



According to NASA, each year 168 billion metric tons (BMT) of CO2 are deposited in the atmosphere. 100 BMT come from the oceans, 30 BMT from decaying biomass, another 30 BMT from respiration. 8 BMT are man made. Of that amount, only 6 BMT are as the result of burning fossil fuels. If we stopped using all fossil fuels, CO2 emissions would only decline by 3.6%.
You’re not talking about net emissions. Net emissions are only ~50% of manmade emissions, due to biomass growth and absorption into oceans. In other words, we only need to decrease fossil fuel emissions by ~50% to stabilize CO2 levels in the atmosphere. Not that I think this is relevent to the discussion. But I just thought I’d mention it.

First with corn you ignore the fact that we are using around 16% of our corn crop to replace (at the very most) 3% of current US gasoline usage. Scale that up and it turns out that it would take 96% of our current corn crop to replace less then twenty percent of the gasoline we currently use.
Why are you still talking about corn?

Uncle Sam has been throwing money at ethanol for 27 years.
Uncle Sam has been throwing pennies at cellulosic ethanol for all but the last 2 years or so. Anyone who uses this argument is completely ignorant about the fact that the research was moving at a snail’s pace until, oh, about 2002 or so, and didn’t start to rapidly expand until 2006.

But the green-fuel boom touted as a clean, eco-friendly alternative to gasoline is proving to have its own dirty costs. Growing corn demands lots of water, and, in eastern Colorado, this means intensive irrigation from an already stressed water table, the great Ogallala Aquifer. One sign of trouble: in just the past two decades, farmers tapping into the local aquifers have helped to shorten the North Fork of the Republican River, which starts in Yuma County, by 10 miles. The ethanol boom will only hasten the drop further, say scientist and engineers studying the aquifers.
Again, why are you still talking about corn?

A WFP official, for example, recently showed me the red plastic cup that is used to dole out daily rations to starving Africans – and then explained, in graphically moving terms, that this vessel is typically now only being filled by two-thirds each day, because food prices are rising faster than the WFP budget.
If rising food prices are so darn awful for the world’s poor, why do they all complain about our subsidies? Or if that’s too complex for you, please explain to me how economics tells you that higher prices for agricultural products harms the poor working in, oh, I don’t know, making agricultural products?

I really wish ethanol boosters would take the time to learn about the facts on the ground. If they do they too will understand how much of a destructive boondoggle current ethanol policy is.
That’s funny, I already knew every "fact" you wrote. Perhaps there’s one more missing link I’m not getting?
1. Learn the "facts"
2. ???
3. Boondoggle!

 
Written By: Mariner
URL: http://
Here’s the basic rub of the ethanol issue: it is accelerating the growth of the agriculture industry into a modern industrial model, while simultaneously driving the current boom in commodity values. So, on one hand, is the group of people avowedly anti-ethanol, for numerous reasons. In this camp are pure economic libertarians making common cause with bleeding-heart, "we’re starving the Third World" eco-greenies, and petrol companies. Strange bedfellows, indeed. On the other side of the equation, in the pro-ethanol camp, are rural politicians, farmers and big-Government politicos mandating themselves into comas. Again, we see an unusual alignment of objectives.

At the end of the day, the net result of ethanol production is thusly:

1. The boom for pure commodity products is producing increased market segmentation into value-added products, and therefore slowly pushing agriculture into a more efficient production model (fewer producers increasing efficiency and producing more per unit).

2. The industry is segmenting into two populations: full-time farmers who are getting bigger to drive economies of scale, and part-time niche/hobby farmers who also work off-farm. This is allowing the agrarian population to have its cake and eat it too. Those who desire to farm full-time must move into post-industrial entrepreneurial systems, and the resulting improvements in technology drive efficiencies to all producers, processors and retailers.

3. Finally, many people view ethanol as a pipe dream. Be that as it may, it is forcing the industry to adapt, improve and is destroying an entrenched reliance on our tax dollars for subsidies. Corn-based ethanol is not the answer. We do not know yet if cellulosic ethanol is a potential answer. For all I know, cars may someday be able to run on hopes and dreams (Barack Obama’s car does, I’ve heard). But none of that matters if the industry does not respond to some demand impetus, somewhere.

Demand is coming from everywhere. It is wholly elastic, and with an expanding population, particularly in emerging economies demanding more meat and corn-based starches, ethanol is not the villain in our tale. I believe its net effect has been to re-energize rural American production, modernize the entire industrial model from farm to store, and is driving advances in the very food sources the world’s population depends on.

A final note: before we eviscerate the ethanol lobby as greedy, short-sighted loons, consider that Europe has essentially embargoed genetically-modified crops, which alone have raised American productivity by roughly 50% in the last 10-15 years. Most of Asia also has a peculiar aversion to better crops. Market segmentation into further non-genetically modified crops will reach some of this demand, but America is feeding most of the world thanks to the evil Monsanto and DuPont’s genetics and breeding programs. GMO embargoes bear a portion of the food vs. fuel problem, as well.
 
Written By: Flyover Country
URL: http://
TJIT -

My post was pretty emphatic about dumping the subsidies and tariffs. Ethanol and other biofuels have to make it economically. The fascinating thing about the book is the claim that this is doable, mostly not with corn. Your argument doesn’t support your conclusion that our energy security situation would be worsened. It just says that ethanol isn’t scalable. I.e., at worst it’s less of a solution than Zubrin claims. And I don’t see it as mandating a solution, if done correctly, only as opening up a potential market, at low cost. I agree that X-prize-style techniques are valuable, but the market for this stuff is so huge, it may not have much impact here.

The worst thing about the ethanol boondoggle is the horrible impact it is having on poor people in the third world.

Not on farmers who can have a much bigger domestic market for their output. And most third world poor are...farmers.

Unscripted -

My main concern is that diverting a basic foodstuff like corn will eventually result in far worse than inflation or more GHG...it has the potential to cause food wars.

More likely it will encourage ag development in lots of places around the world, as countries work their way off OPEC. Ag productivity can increase massively in most countries. Your Malthusian fears have never been realized, despite endless predictions from the smart and the not-so-smart.

Arch -

A gallon of gasoline contains 125,000 BTUs. Ethanol, only 87,000 BTUs - 33% less....To produce and distribute a gallon of corn based ethanol, we burn 0.75 to 1.5 gallons of fossil fuel.

Zubrin claims that even with today’s .50 cents/gallon subsidies, farmers would lose money if that were true. Corn farmer’s energy costs aren’t their biggest ticket item, and yet they’re making lots of money in this early period.

TallDave -

Good on ya.

Mariner -

In terms of reducing GHG, the real effect, according to a couple of new studies recently carried in "Science" is that ethanol production may actually increase emissions.

The key point from the Science articles is not about production efficiency, which is improving anyway. It’s about what happens when you convert land to agriculture. There is nothing biofuel-specific about this. It happens whenever a farmer first plows a virgin acre. The solution to that is productivity, which remains very low compared to the US in most parts of the world.

Also, at the moment I’m less concerned about the environmental effects than about breaking OPEC. This approach appears to be scalable, with the potential to return control of our destiny to us. A secondary benefit is that the resulting farm prosperity may allow us to finally dump our nutso agricultural subsidies.
 
Written By: Larry
URL: http://

 
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