Answering Questions - Part II

OK, I think this finishes off the questions. Thanks to all who asked a question. I think this has been a productive exercise, and I hope you find my answers useful. I may do this again at some point, but for now, I am back to posting and then lurking.

The Questions

Jeff Sutherland asked: It seems to me that electricity is going to be the key energy source in the future….Biofuels, like ethanol, if produced with electrical equipment seems like a good method to store energy….What do you see as the best option for a transportable form of energy in the future? Answer

garsky asked: A couple of posts ago you mentioned some things you were doing to prepare for a worst-case scenario. How about some details? Especially the part about your savings. Answer

Rob asked: Have you given up hope? Based on your more recent posts, it certainly looks like it. Answer

ape man asked: Take a look at this Bloomberg story. Does the story indicate that there are too many tankers, or that OPEC is not following through with its promised production increase? Answer

Doug asked: What would be an optimal location to live in ten or twenty years from now? Answer

Armchair261 asked: There’s always a lot of press about gasoline prices and inventory levels. How are these inventories affected by demand for other products, like diesel, propane, or fuel oil? Are refiners having trouble meeting demand for those products too, and is this siphoning some crude away from gasoline production? Answer

Chris said: Dr. Ramey has created a new and more efficient method of production which increases the yield of butanol and decreases the number of and volume of byproducts….not all species of high oil yielding algae are perfect but there are plenty to choose from.

Questions:

1. Don’t you think that at least one of these species could efficiently produce oil if the electrical energy input was reduced?

2. What was the reasoning behind the #3 point saying that closed bioreators are “totally absurd”?

3. Since you have ruled out the two most efficient and promising fuel alternatives, what do you propose we replace gasoline and diesel with? Answer

anonymous asked: What is the motivation to maintain high gasoline inventories? Answer

mink asked: 1) How do you see the way forward for “peakoilers”? Here and on the oil drum you are interested in getting reliable information and predictions out to the public. But the number of people interested is small.

2) There will come a time when peak-oil will hit public awareness, and it will be an ugly sight. Panic is very possible, and this panic may be very destructive. How do we prevent this? Answer

optimist wrote: Here’s my request: write a posting describing how one might tell if a given technology is promising or not. I think this would be immensely helpful to non-technical readers. Answer

The Answers

Answer

First, I agree that electricity is going to be key. We have the ability to produce much more electricity than we do now, but I don’t think we have the ability to significantly increase our output of liquid fuels. However, I would not produce biofuels from electricity. It would be too inefficient to go that route. For instance, if I had biomass, I wouldn’t convert it into electricity, I would gasify it and convert it into a liquid fuel. The heat produced from the process could be used to produce electricity, but the energy efficiency of the biomass is going to be much higher if you go straight to liquid fuels (if that’s what you intend the final product to be).

As far as the best option, I think electric transport will be the core of our transport system long-term, but we will always have a need for liquid fuels. I think biofuels can fill part of this gap. But we have to get away from this belief that we are going to displace most of our current oil usage with biofuels. That kind of thinking is very dangerous, because it could divert too many resources and waste precious time that could be used on more sustainable long-term solutions. Right now, the government is banking far too much on biofuels as THE solution, when they should be spreading the bets a lot more than they are doing.

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Answer

My strategy is very long-term, and I do not advise anyone else to do what I do. It has worked for me, but it may not work for you. Going all the way back to the early 90’s, I put a lot of thought into a very long-term strategy. I didn’t want to time the market, so I tried to identify sectors that I thought would fare best over a 20-year period. Health care/biotech was one of the sectors that I could see outperforming, especially as the Baby Boomers grew older. People are going to spend money on health care. I still believe that, so I have a fair amount of money in that sector (and have had for many years).

In the late 90’s and early part of this decade, I partially abandoned my long-term strategy and jumped on the tech bandwagon like many others. I got burned like many others. Why did I get burned? Primarily, because I didn’t really understand the things I was investing in, and I was lured by the prospect of the incredible returns that tech stocks were delivering. I joined the flock with the other sheep and got sheared. So, I reevaluated, and decided: Stick to the areas that I really know, and focus on those. I brainstormed on what I thought the future held, and I concluded that higher oil prices looked very likely. But the U.S. is very dependent upon oil, so it appeared to me that the economy in the U.S. is very vulnerable to higher oil prices.

So, these assumptions were the basis of my strategy. I left my position in the chemical industry for a position in the oil industry. I figured that as oil supplies tightened up and the price rose, and people continued to need energy, the people providing that energy would have the greatest job security. To hedge against the dollar, I put about 20% of my portfolio into international funds (this is more than most financial advisors would recommend). I also made a bet that energy stocks were undervalued. More recently, with my position in the UK, I have further insulated myself against the falling dollar because my compensation is now tied to the British Pound.

Following the tech stock fiasco, my strategy since 2001 has paid off. My overall portfolio - which includes the money I have added into it - has increased at an average annual return of 36% for 6 years. If I exclude the savings, the returns alone have averaged 26% for 6 years. I am now in the process of using some of that capital to acquire land in various locations, which will provide further diversification.

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Answer

Absolutely not. In fact, I am more hopeful than I have been in some time. I believe I am realistic, in that we are going to have to reduce our energy usage. But I am cautiously optimistic that if things get really tough, we can change in ways that don’t seem likely at the moment. We don’t give ourselves enough credit for our adaptability. If oil did peak soon and the price went a great deal higher, a lot of people would find areas of fat that they could cut out. This sort of behavioral shift would give us added time to formulate a better strategy than counting on biofuels to provide the net equivalent of 40 or 50 million barrels per day of oil.

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Answer

Note that this story dates back to August, well before the OPEC announcement that they would supply more crude. So I wouldn’t read anything into it regarding whether OPEC is following through on their promised increase. In fact, reports so far indicate that Saudi has in fact advised Asian refiners that they will be bumping up deliveries there.

Now, as far as why tanker demand was down in September, I can’t say for sure. Spring and fall are typical turnaround seasons, in which refinery utilization goes down and crude demand follows. So what would be of interest would be to compare the tanker demand rate with the typical September rate, and also to look at the condition of oil inventories in the area. That might clarify the situation.

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Answer

I think it will be safe within the walls of my compound.

Seriously, if you strongly believe in a worst-case scenario, there are certain attributes that I would look for. I want to see a high ratio of farmland to surrounding population. I want to be relatively close to decent medical facilities. I would like to be close to transportation via rail or water. I want the place to have a reliable water supply. Those are just a few of the things that would be on my check-list, and there are some places that fit the bill. I think areas on both coasts of the U.S. will fare well. Needless to say, I think Scotland - which will still produce a lot of oil and gas for a long time - will fare well. I absolutely would not want to live (among others) in Houston, L.A., Phoenix, or Las Vegas (although one could argue that the latter two are well-placed for reliable solar energy).

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Answer

Refiners are always looking at margins on diesel and gasoline. When margins for diesel are higher than for gasoline, they will shift production toward diesel (which will also affect things like the propane balance). A typical refinery can shift between diesel and gasoline to a limited extent - perhaps 5%. If production is shifted toward diesel, then that should eventually improve the gasoline margins as supply is taken off the market, and as this happens they will shift some production back. And they literally look at this and adjust multiple times per week.

The one big caveat is that commitments to existing customers take precedence. So, if margins for diesel look better, but you would have to short an existing gasoline customer to take advantage, you are stuck. You can’t declare force majeure for something like that. Maintaining relationships with your customers sometimes means that you have to give up short-term profits.

Are refiners having trouble meeting demand? Yes. Refinery utilization has been down since Hurricane Katrina, and the only thing that has kept this from resulting in $4 gasoline are strong imports. If the imports dried up, refiners would attempt to maximize gasoline, and this may precipitate a distillate shortage. And we don’t import much in the way of distillates, because demand is high elsewhere in the world (unlike gasoline, which is produced in excess, allowing some to be exported).

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Answer

First of all, I certainly don’t want to denigrate Ramey’s patent. It is a good contribution. However, it is clear to me that many people do not understand the real problem with bio-butanol. It is not a problem of conversion rate or reaction speed. Those are the areas that Ramey addressed, and while those things are nice to have, there is a knock-out factor that has not been addressed. That is, if you read Ramey’s patent (which I have done many times), he is still talking about butanol concentrations in the range of 2.5%. That is the problem, not whether the conversion is 25% or 35%.

Butanol is very toxic to the bugs, so it is very difficult to increase the concentration of butanol in the solution. What is needed is a breakthrough that would allow the bugs to thrive at the solubility limit of butanol, which is about 8%. In that case, excess butanol production would phase out, and this would be much less energy intensive than a distillation. But you can’t afford to distill off a 2.5% solution of butanol. The energy inputs into the process will be far greater than the energy content of the butanol. I know this from experience. I have done a lot of work on butanol distillations. At a 3% concentration of butanol, we don’t even attempt to separate it out. Even using relatively cheap (at that time) natural gas, it didn’t make economic sense to extract that butanol. Those levels of butanol are sent to wastewater treatment for disposal.

Believe me, I have a soft spot for butanol. I want to see it work. But right now there are serious issues. That’s not to say that it isn’t worth pursuing. In fact, I am working on it myself. But I have to be realistic.

Now, your specific questions:

1. Don’t you think that at least one of these species could efficiently produce oil if the electrical energy input was reduced?

The collection is the problem. If you go back to first principles of solar insolation, in the absolute best case a square meter of water can produce about a gallon per year of biodiesel. Once you add up the costs and energy inputs to harvest that meter and process the oil, it becomes an exercise in economic futility. Will it ever be economical? I won’t say never. I will say that it is nowhere close.

2. What was the reasoning behind the #3 point saying that closed bioreators are “totally absurd”?

I didn’t write that. It was written by Dr. John Benemann, who was involved in the algal biodiesel work and coauthored the closeout report of the project. He has 30 years of experience in the field, and like me, he likes to reel in hype when it gets out of hand. That’s what he was doing. His reasoning is that the cost of closed bioreactors is far too high - by a couple of orders of magnitude - to justify the amount of biodiesel that you could produce from the process.

3. Since you have ruled out the two most efficient and promising fuel alternatives, what do you propose we replace gasoline and diesel with?

It’s going to take conservation, efficiency, inputs from biofuels, electric transportation, public transportation, etc. There is nothing out there, and nothing on the horizon, that can actually replace our current usage of gasoline and diesel. We have to come to grips with this as soon as possible, and start spreading our bets a bit more. Right now, everyone is counting too heavily on biofuels to deliver.

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Answer

Ideally you only keep inventories where they need to be to make sure that you are always able to supply product to your customers. If you keep inventories too high, you obviously have money tied up that’s not doing anything for you. So let’s say you were maintaining high inventories in 2005. Suddenly, Hurricane Katrina comes along, prices go through the roof, shortages start to crop up, but you are in fat city because you had high inventories. So, it’s a balancing act.

One thing you will see if you look back, is that after Katrina refiners started to keep their crude inventories much higher than before. They saw the effects of a supply disruption, so they played it cautious for a while. Over time, I think we will start to forget, and inventories will creep back into the normal ranges.

Gasoline inventories are a different matter. I think refiners would like to put more product on the market, especially back when margins were so high, but they just couldn’t make enough to satisfy demand and refill the tanks.

One other time that refiners are motivated to keep gasoline inventories high is when they are headed into a turnaround. You need to have very full gasoline tanks when you shut down, so you can supply your customers while you are down.

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Answer

This was one of the more difficult questions to answer. You are correct that the number of interested people is small, but that number is growing. I am seeing more references in the media (some of which are merely to denounce those “crackpot Peak Oilers”). It has been very important to me, and to many others who are concerned about future oil supplies, that we maintain credibility as we discuss this. Those who cherry pick data to support preconceived notions, or who merely ignore inconvenient data do a great disservice to us all. (See Stuart Staniford addressing that here).

Arguments must be sound, and criticisms must be addressed. Where matters are open to interpretation, you must make a convincing case for why your interpretation is correct. With a few exceptions, I think that convincing large numbers of people with factual arguments has largely been a dismal failure. To convince the masses, you have to start convincing the media. The more this pops up in the media, the more the rest of the media will pay attention. But if the media is being presented half-baked arguments, it does tremendous damage.

Panic is only going to happen if things change rapidly. Anger is going to be a common emotion as oil prices spiral higher and higher, and people feel that their hard-earned money is flowing into the coffers of OPEC and the oil companies. The thing I have always believed in is educating people, which is the reason I do this. The best we can do is continue to chip away with sound arguments, and hope that the message starts to sink in. If people understand why things are happening, then we should be in better shape with respect to formulating solutions. If we simply blame the usual suspects (it’s those gouging oil companies!), then we may sit around and point fingers as we drive off a cliff.

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Answer

If it was that easy, people wouldn’t keep offering me large sums of money to vet technologies for them. Seriously, there seems to be a great big vacuum in this area. I get questions from intelligent people who can look at an energy idea with a major flaw, but they can’t see it.

There is no magic formula. I think it requires experience, and you have to take them on a case by case basis. If someone brought me a potential breakthrough in biotechnology, I would be in the same boat as a lot of people are when they try to interpret the latest hyped energy breakthrough. Even though biotech is an interest/hobby of mine, it may be difficult for me to spot a fatal flaw. A molecular biologist may take one look, and say “You see that step where they say ‘insert gene A into position B?’ Well, the status of the technology is nowhere close to being able to do that.”

I think it just pays to be a skeptic first. There is nothing wrong with being a skeptic, even though many people confuse skepticism with negativity. I always tell people that I am a skeptic, but also a problem-solver. I am not shooting these ideas down for fun; I want some of them to work. But you have to sort the wheat from the chaff.

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Current Status of the Renewable Diesel Chapter

Most sections are pretty well filled in. Below is what the outline looks like. I still have this weekend to work on it. What am I still missing? I am not quite satisfied with all of the titles. For instance, in “The Potential”, I do a thought experiment that I think demonstrates that thoughts of biofuels displacing major amounts of petroleum are completely unrealistic. So, “The Potential” isn’t quite right, but I have had writer’s block on that one.

My idea for that section was to basically show how much petroleum equivalent we could produce by planting the entire arable world in rapeseed. Any better ideas for demonstrating this? I started to go back to first principles and calculate using solar insolation and photosynthetic efficiency, but I think that’s more complex than it needs to be.

Here was the earlier outline.

Below is what I have now. I am still working on several sections - especially the green diesel section. Also, have I missed any really major feedstocks?

Renewable Diesel

Introduction

The Diesel Engine

The Potential

Straight Vegetable Oil (SVO)

Biodiesel

• Definition/Production Process
• Fuel Characteristics
• Energy Return
• Glycerin Byproduct
• Animal versus Plant Sources

Green Diesel

• Definition/Production
• Hydroprocessing
• BTL

Feedstocks

• Soybean Oil
• Palm Oil
• Rapeseed Oil
• Jatropha
• Algae
• Animal Fats
• Miscellaneous

Environmental Considerations

Conclusions

Algal Biodiesel: Fact or Fiction?

The following is a guest post by John Benemann. John has many years of expertise in biomass conversion, and previously co-wrote a guest piece on cellulosic ethanol. On the subject of biodiesel from algae, he literally wrote the book.

I originally wrote an article over a year ago in which I mentioned the potential of algal biodiesel. I still believe, as I did then, that biodiesel (or more broadly, renewable diesel) is a far superior fuel to ethanol for reasons I outlined in that essay. However, over the past year, the more I learned about the prospects of biodiesel from algae, the more it started to look to me like cellulosic ethanol: Technically feasible? Yes. Commercially feasible? Nowhere close, and the prospects don’t look good any time soon. (However, as in the case of cellulosic ethanol, I believe the technology has some potential, so the government should fund the research).

This was a bit disheartening for me, because I had high hopes that we had an option for replacing a large amount of our fossil fuel usage with this renewable option. I no longer believe that, and recent work by Krassen Dimitrov (PDF warning) had reinforced my doubts. When I read the guest post at The Oil Drum by fireangel, “Has the Algae Cavalry Arrived“, my first thought was “Nice work.” My second thought was, “I should have jumped on this and investigated thoroughly eight months ago when those nagging doubts started to creep in.” One nagging question I have had since I first read about biodiesel from algae is “Why would NREL terminate the project if the prospects really were good?”

But should there be any further doubts, here is a guest post from a man who knows as much about this subject as anyone else in the world. And he bears bad news for those who had visions of driving around in algae-fueled transportation.

——————————————–

I saw with some interest the guest post on “Has the Algae Cavalry Arrived” posted by Heading Out and written by fireangel about the claims being made by GreenFuel Technologies (GFT) Corporation. I have some standing in this matter, both as Manager of the International Network on Biofixation of Carbon Dioxide and Greenhouse Gas Abatement with Microalgae (operated by the Int. Energy Agency, Greenhouse Gas R&D Programme) and also as a researcher in this field for over 30 year. My comments here are my own, of course, and don’t necessarily reflect those of the GhG R&D Programme or others involved in the Biofixation Network. In brief:

1. The post by fireangel, based on the analysis by Dr. Krassen Dimitrov’s, is generally correct, although some details regarding algae physiology and mass culture are arguable. However, those would not change the general conclusions of this posting. Well done!

2. The claims for biodiesel production rates being made by GFT, among many others in this field, exceed anything based on biological or physical theory, as also pointed out in this posting. They are truly bizarre.

3. The use of closed photobioreactors (>$100+/m2) for such applications is totally absurd.

4. I am on the record as stating that this is “It’s bizarre; it’s totally absurd.” (see below article from the American Scientist last year, which quotes me to that effect. This was a correct quote, and in context).

5. Open ponds, at 6. Open ponds may plausibly be considered for algae biofuels production, but this assumes that indeed the required R&D is successful, a very BIG IF (but that is true of all R&D). But it is worthwhile trying, as we must try all plausible options. But we must also reject those that, as pointed out in this posting, violate first principles and have other major up-front failings.

7. I was the Principal Investigator and main author of the U.S. DOE Aquatic Species Program (ASP) Close-Out Report [RR: You can download this 328 page PDF, which I have actually read, here], and thus am rather familiar with it. The report was published by NREL with their own introduction that paints a perhaps somewhat too-positive picture in light of the actual data and results. Thus it should be used with some caution. This report was meant to just summarize the work done by the ASP, which spent about $100 million, (in today’s dollars) over about a decade and a half.

8. Microalgae biofuels generally, and algae biodiesel production specifically, is still a long-term R&D goal (likely about 10 years), that will require at least as much funding as the ASP, if not more, and success is, as for any R&D effort, rather uncertain.

9. Some near term applications can be considered, in wastewater treatment specifically (but, wait, do not rush to your nearest algae wastewater treatment ponds - there are thousands of these around, but they are mostly very small and their algae have little or no oil, at least the way that we operate those systems at present. Making oil from algae grown on wastewaters also still requires significant R&D).

10. There are now scores of venture-financed companies, university research groups, government labs, garage start-ups, GFT licensees, web sites, and on and on claiming that they have, can, may and/or will produce algae biodiesel, at low cost, high productivity, soon, etc. None are based on data, experience, reality or even a correct reading of the literature.

11. I am not aware of any work in this field done by Prof. Briggs at U. New Hampshire, outside from an old website that quotes the Aquatic Species Program Close Out Report. There is no basis for the projections he makes for very high biodiesel production rates.

12. Even if R&D proves successful and we can actually produce algae biofuels (maybe even biodiesel) economically (whatever the economics may be a decade or so from now), even then, I am sorry to say that due to resource (land, water, etc.) limitations, algae will not replace all our (or their) oil wells, cannot solve our entire global warming problem, or make me rich quick, at least not honestly. But maybe this technology could be developed in the next few years so that in the future it can make a contribution to our energy supplies, our environment and human welfare.

We will in the future need all such technologies and must in the present study and develop all those that appear at least on their face plausible. But we also must reject those, as in the present case, that are based on absurd claims (such as in this case of productivity) and bizarre contraptions (e.g. closed photobioreactors).

There are no silver bullets, no winner-take-all technologies, no technological fixes, the solution to our energy and environment crisis can only come from, in order, ‘demand’ management, efficiency improvements, and new energy supplies, to which, maybe, algae processes can contribute.

I hope that this posting helps persuade GFT, and all others in this “business”, to CEASE AND DESIST from the absurd and totally bizarre claims they are making. PLEASE!!

Cheers.

John R. Benemann, Ph.D.
jbenemann@aol.com

American Scientist Article Excerpt

The full article is:

Grow Your Own?

The excerpt to which Dr. Benemann referred:

The people now working on these and several similar commercial ventures are clearly eager to make growing algae a going business in this country. Yet it’s not hard to find experts who view such prospects as dim indeed. John R. Benemann, a private consultant in Walnut Creek, California, manages the International Network on Biofixation of CO2 and Greenhouse Gas Abatement with Microalgae for the International Energy Agency. He helped author the final report of the Aquatic Species Program and has decades of experience in this field. “Growing algae is cheap,” he says, but “certainly not as cheap as growing palm oil.” And he is particularly skeptical about attempts to make algal production more economical by using enclosed bioreactors (rather than open ponds, as were used for the Aquatic Species Program). He points out that Japan spent hundreds of millions of dollars on such research, which never went anywhere. Asked to comment about why there is so much effort in that direction now, he responds, “It’s bizarre; it’s totally absurd.”

Biodiesel: King of Alternative Fuels

OK, maybe not the king yet. But if we judge based on the merits, biodiesel is head and shoulders above ethanol. Let’s take a closer look at it.

Biodiesel has a couple of huge advantages over ethanol. First, it is not miscible in water, so you don’t have the huge input of fossil fuels that is required to separate ethanol from water. This makes the energy balance far better than that of ethanol. A poor energy balance is my primary objection to ethanol (especially grain-ethanol).

The second major advantage biodiesel has is that it has over 1.6 times the BTU value of the same volume of ethanol. A gallon of biodiesel contains approximately 121,000 BTUs/gallon (about the same as gasoline), versus approximately 75,000 BTUs per gallon for ethanol. Diesel engines also run 35-40% more efficient than spark-ignition engines (the kind that use gasoline or ethanol). That means that 1 gallon of biodiesel has the effective energy value of 1/0.65, or 1.5 gallons of gasoline. As shown in previous essays, 1 gallon of gasoline is worth around 1.5 gallons of ethanol on a BTU equivalent basis, so 1 gallon of biodiesel is effectively equivalent to (1.5*1.5) or 2.25 gallons of ethanol! The biodiesel group at UNH has done similar calculations if you want to get into greater detail (1).

Unfortunately, there are a couple of major disadvantages for biodiesel as well. The biggest is that most of us do not drive vehicles with diesel engines. It will take some time for a transition to diesels to take place. This is the most serious obstacle to wide-scale adoption in the short-term.

A second disadvantage that is often cited is that biodiesel has a much higher pour point and cloud point than petroleum diesel. This means that it will solidify at a much higher temperature, making it useless when the temperatures are cold. However, I can envision some easy engineering solutions for this problem. A vehicle could have a dual-tank, in which it is started up on petroleum diesel. The exhaust could pass through a heat exchanger through the biodiesel tank. There could be controls to regulate the temperature in the biodiesel tank so that it doesn’t get too hot. After the biodiesel warms up, a switch could automatically flip the fuel supply to the biodiesel tank. (If someone invents this, I want a cut!) Alternately, it can be simply cut with petroleum diesel, but the amount of biodiesel that can be added will be limited in cold climates.

Biodiesel from What?

Biodiesel can be produced from crops, such as soybeans. The reported EROI for biodiesel from soybeans is 3.2(2). Note that this is over double the EROI for ethanol, and that doesn’t even account for the higher efficiency of the diesel engine. Soybeans yield about 40 bushels per acre, which translates into around 60 gallons of biodiesel per acre. This is far short of the 350 gallons or more of ethanol that can be produced from an acre of corn, but we have to take into account the net energy produced. Given that the real energy return of grain ethanol is around 1.3, it took the energy equivalent of around 350/1.3, or 269 gallons of ethanol to make the 350. We netted out 81 gallons. For the soybeans, it took 60/3.2, or 19 gallons of biodiesel equivalent to produce the biodiesel, for a net of 41. But recall that 1 gallon of biodiesel is worth 2.25 gallons of ethanol when both are used in their respective engines, so the biodiesel yield is “worth” 2.25*41, or 92 gallons of ethanol. (Please note that these calculations are approximate. If I were going to try to publish this somewhere, I would convert everything into BTUs to calculate the net yields.)

However, I do not wish to make the argument that we should be making biodiesel from crops, unless we are doing so from by-products left over from food production. Production of biodiesel (or ethanol) from crops can’t make a significant dent in our current usage of motor fuels. Fortunately, there may be a better way. A couple of years ago, I ran across an article that really caught my attention. It was my Reference 1 below, a report by Michael Briggs at The University of New Hampshire. Briggs explained that biodiesel can be produced from algae, at yields as high as 15,000 gallons per acre! Briggs did a number of calculations of the feasibility and cost of replacing the entire motor fuel supply of the U.S. with biodiesel. I checked his calculations and read his references, and his analysis - based on experiments conducted by NREL - appeared to me to be spot on. In his own words, regarding the acreage that would be required:

In the previous section, we found that to replace all transportation fuels in the US, we would need 140.8 billion gallons of biodiesel, or roughly 19 quads (one quad is roughly 7.5 billion gallons of biodiesel). To produce that amount would require a land mass of almost 15,000 square miles. To put that in perspective, consider that the Sonora desert in the southwestern US comprises 120,000 square miles. Enough biodiesel to replace all petroleum transportation fuels could be grown in 15,000 square miles, or roughly 12.5 percent of the area of the Sonora desert (note for clarification - I am not advocating putting 15,000 square miles of algae ponds in the Sonora desert. This hypothetical example is used strictly for the purpose of showing the scale of land required). That 15,000 square miles works out to roughly 9.5 million acres - far less than the 450 million acres currently used for crop farming in the US, and the over 500 million acres used as grazing land for farm animals.

It would be preferable to spread the algae production around the country, to lessen the cost and energy used in transporting the feedstocks. Algae farms could also be constructed to use waste streams (either human waste or animal waste from animal farms) as a food source, which would provide a beautiful way of spreading algae production around the country. Nutrients can also be extracted from the algae for the production of a fertilizer high in nitrogen and phosphorous. By using waste streams (agricultural, farm animal waste, and human sewage) as the nutrient source, these farms essentially also provide a means of recycling nutrients from fertilizer to food to waste and back to fertilizer.

Regarding the costs, he writes:

In “The Controlled Eutrophication process: Using Microalgae for CO2 Utilization and Agircultural Fertilizer Recycling”, the authors estimated a cost per hectare of $40,000 for algal ponds. In their model, the algal ponds would be built around the Salton Sea (in the Sonora desert) feeding off of the agircultural waste streams that normally pollute the Salton Sea with over 10,000 tons of nitrogen and phosphate fertilizers each year. The estimate is based on fairly large ponds, 8 hectares in size each. To be conservative (since their estimate is fairly optimistic), we’ll arbitrarily increase the cost per hectare by 100% as a margin of safety. That brings the cost per hectare to $80,000. Ponds equivalent to their design could be built around the country, using wastewater streams (human, animal, and agricultural) as feed sources. We found that at NREL’s yield rates, 15,000 square miles (3.85 million hectares) of algae ponds would be needed to replace all petroleum transportation fuels with biodiesel. At the cost of $80,000 per hectare, that would work out to roughly $308 billion to build the farms.

The operating costs (including power consumption, labor, chemicals, and fixed capital costs (taxes, maintenance, insurance, depreciation, and return on investment) worked out to $12,000 per hectare. That would equate to $46.2 billion per year for all the algae farms, to yield all the oil feedstock necessary for the entire country. Compare that to the $100-150 billion the US spends each year just on purchasing crude oil from foreign countries, with all of that money leaving the US economy.

I spent a lot of time reading through his references (some are very long reports), and I could not understand why we weren’t massively funding this research. It turns out that NREL stopped funding the program in 1996. The reason remains unclear to me, but this concept had given me hope that there might be a viable alternative out there after all that didn’t require us to turn all our forests into farmland. I spent a lot of time wondering just how I could involve myself in this area and contribute. I did e-mail Michael Briggs and we had a nice discussion, and I came away convinced that he knew what he was talking about. So why on earth weren’t we all over this? Frankly, I still don’t know the answer to that.

Biodiesel Plus Carbon Dioxide Recycle

Fast forward to 2006, and newspapers across the country picked up the story that Isaac Berzin, of MIT, is using algae to quickly recycle carbon in carbon dioxide rich exhaust stacks from power plants (3). What a brilliant, brilliant idea! Why didn’t I think of that? By doing this, he is able to double up on the benefits. First, the carbon dioxide gets converted back into plant material instead of going directly into the atmosphere. This would be a way of sequestering the carbon, provided the algae was properly disposed of. The story reports:

Fed a generous helping of CO2-laden emissions, courtesy of the power plant’s exhaust stack, the algae grow quickly even in the wan rays of a New England sun. The cleansed exhaust bubbles skyward, but with 40 percent less CO2 (a larger cut than the Kyoto treaty mandates) and another bonus: 86 percent less nitrous oxide.

That alone is incredible. But that isn’t all:

After the CO2 is soaked up like a sponge, the algae is harvested daily. From that harvest, a combustible vegetable oil is squeezed out: biodiesel for automobiles. Berzin hands a visitor two vials - one with algal biodiesel, a clear, slightly yellowish liquid, the other with the dried green flakes that remained. Even that dried remnant can be further reprocessed to create ethanol, also used for transportation.

One key is selecting an algae with a high oil density - about 50 percent of its weight. Because this kind of algae also grows so fast, it can produce 15,000 gallons of biodiesel per acre. Just 60 gallons are produced from soybeans, which along with corn are the major biodiesel crops today.

Now that’s ethanol I can live with. Finally:

For his part, Berzin calculates that just one 1,000 megawatt power plant using his system could produce more than 40 million gallons of biodiesel and 50 million gallons of ethanol a year. That would require a 2,000-acre “farm” of algae-filled tubes near the power plant. There are nearly 1,000 power plants nationwide with enough space nearby for a few hundred to a few thousand acres to grow algae and make a good profit, he says.

I hope this guy is extremely successful and makes a billion dollars. He has the potential here to make a contribution to society that most of us only dream about. As he himself said “This is a big idea, a really powerful idea.” I couldn’t agree with those sentiments more.

Summary

Biodiesel has a much greater energy content than ethanol, and diesel engines are more efficient than spark ignition engines. The energy return for biodiesel is over double that of ethanol. One the downside, most of us don’t drive vehicles with diesel engines, and there is a technical problem (minor, in my opinion) that biodiesel will solidify in cold weather. But the most amazing thing is that biodiesel can be produced from algae that have been used to reduce carbon emissions from the exhaust of power plants, in yields as high as 15,000 gallons per acre. This is 2 orders of magnitude higher than biofuel yields from crops. Biodiesel produced from algae is the only theoretically feasible alternative energy solution that could actually replace our current fuel demand. Combined with an aggressive conservation program, success in large scale biodiesel production from algae could ultimately lead to energy sustainability. The one thing we lack here is a good analysis of the energy balance. The group at UNH reports that the EROI is likely to higher than the 3.2 reported for soybeans, but I would still like to see a rigorous analysis.

References

1. Wide-scale Biodiesel Production from Algae

2. Life Cycle Inventory of Biodiesel and Petroleum Diesel for Use in an Urban Bus

3. Algae — like a breath mint for smokestacks

4. Life Cycle Inventory of Biodiesel and Petroleum Diesel for Use in an Urban Bus