The Energy Scene in India

As I traveled through India on a recent business trip, the topic of energy was constantly on my mind (as it is every time I travel). I found out some interesting things about jatropha, toured a sugarcane ethanol plant, found a wind farm in the middle of nowhere, and encountered a native ethanol skeptic. Here are my impressions.

Ethanol in India: Another Brazil

The highlight of my trip was definitely the tour of the Sanjivani sugar cane plant near Shirdi. This could be a model to the rest of the world (with some exceptions) regarding how ethanol should be produced, as they have the entire life cycle covered.

They take in the sugarcane from local farmers, and they produce sugar. Molasses is a by-product of sugar production, and they ferment that to make ethanol. Bagasse is also a by-product, and this is used to fire the boilers to provide power for the plant. The sludge waste that they produce is composted and mixed with the bagasse ash and given back to the farmers to put on their fields. As far as I can determine, this is an entirely sustainable process. But the bagasse is the key to the entire operation.

I quizzed them quite a lot about the bagasse boilers, and what I was told is that because the process produces very finely ground bagasse (I walked out of the plant covered with bagasse dust), and because the ash content in bagasse is very low - it is an ideal feed for the boilers. Very few sources of biomass fall into the category that 1). It is removed from the field as a part of the cultivation; 2). The resulting process pulverizes the biomass (not only does this make it easy to burn, but it dries easily as it passes through flue gas on the way into the boiler); and 3). The ash content is very low, minimizing maintenance of the boilers. This makes sugarcane ethanol a truly unique production method, and not something that is easily transferred to corn or cellulosic ethanol.

Not only were they making ethanol (95%; not fuel grade) but they had an entire class of ethanol derivatives that originated from the sugarcane ethanol. These derivatives included important industrial chemicals such as acetic acid, acetic anhydride (very important in my current job), acetaldehyde, and ethyl acetate.

As mentioned above, the grade of ethanol that they primarily produce is industrial grade. This differs from fuel grade for blending in that the ethanol-water azeotrope isn’t broken; the final product is 95% ethanol and 5% water. This greatly reduces the energy usage, as it takes a lot of effort to get out that last 5% water. This is in fact the concentration that Brazil primarily uses for fuel, and makes the energy balance much more favorable than using anhydrous ethanol. For blending with gasoline, it is not a good option as the water will phase out. But for dedicated ethanol vehicles, the 95% grade seems to be a reasonable option for the energy demands of many tropical countries.

In Search of the Elusive Jatropha Plant

If you are like me, when someone mentions jatropha, India immediately comes to mind. Most jatropha stories that I have seen mention India as leading the way on jatropha development. For a while, I had no reason to question these reports, but recently I started developing some doubts.

The doubts started when I was contacted by a biodiesel company in Turkey. They had shut down operations because feedstock costs had gotten too high, and they asked if I could help them find an alternative source. I asked them if they have looked into jatropha. They said they had, but weren’t able to locate anyone in India who could supply them. I thought this was odd given what I had heard about jatropha in India, so I agreed to look into it for them. I initially contacted a number of people with various Indian and biofuels connections, but nobody could point me to a concrete lead.

So one of the things I intended to do on my trip was track down that elusive jackalope, er jatropha. During my trip I asked practically everyone I met, which included a number of people involved in biofuels, and while almost everyone knew what it was, nobody could point to anyone who was actually producing it. I thought this increasingly odd, given the hype I had heard regarding jatropha and India.

Those who did know a little about jatropha in general, said that the problem is that the fertile land is being utilized to grow food (a billion people need a lot of land for food) and the marginal land typically has no roads or other infrastructure that could support a jatropha industry. While I did see a lot of seemingly marginal land as I drove around, it was pretty remote. Furthermore, I was told that jatropha requires about 3 years to produce, and not many farmers are likely to be willing to tie up their land for an extended period on an unproven crop.

So, while this doesn’t mean that there is no potential for jatropha, I left the country feeling that the jatropha situation in India has been highly overstated.

Transport: Mostly by Foot

Based on my observations, the vast majority of transport in India is by foot. I traveled pretty deeply into rural India, and almost everywhere I went there were always vast numbers of people walking along the roads. Motorcycles are abundant, and almost always have multiple passengers. At one point, I saw seven people (five of them young children) all piled onto a single motorcycle.

In cities like Bombay, auto-rickshaws are everywhere. I rode in one, and would describe it as essentially like a motorcycle with a light-weight body built around it. Interestingly, the one I rode in (maybe all of them are like this) ran off of compressed natural gas. Speaking of which, there were a lot of alternative fuel vehicles in Bombay. I saw many CNG vehicles, and a taxi I rode in once was fueled by a propane tank in the trunk.

A Wind Farm and an Ethanol Skeptic

At one point we were driving through a very remote area, and suddenly a wind farm appeared. I took some photos. The farm appeared to be very distant from any cities, so I am not sure about how cost effective it was in that location.

One thing I didn’t expect to encounter was an ethanol skeptic, but at one of the meetings we had, (following my questions about jatropha), our host told me that “ethanol for biofuel is India’s greatest threat.” I asked why, and he said he feared that 1). The demand in the West for biofuel will result in a food versus fuel competition; and 2). That increased ethanol demand would put more pressure on India’s already serious water problem.

Food

During the week in India, I had meat twice. The total I had was about 3 ounces. I would have guessed that I would be constantly starving, but the food is very filling, and very good. I haven’t had vegetarian like that in the West. At a typical meal, I would have a carbohydrate (usually a flat bread), a vegetable, and a protein. Rice is always part of the meal. But the meals were very nutritious and healthy, so I plan to incorporate some of these meals into my normal diet.

My host (and Bombay native) Kapil Girotra informed me that India is self-sufficient in food. He also told me that 70% or so of the population is vegetarian, which means it requires less land to feed them. However, on the other hand, I saw a very large portion of the population that certainly is not getting enough to eat. So you might say that they are barely self-sufficient. They do produce enough food to feed their population, but some of that population is undernourished.

The Poverty

The poverty in India is just stunning. We don’t have anything to compare it to in the West. The people that would be considered very poor in the West have it far better than the poor in India. They are literally starving to death. I once asked what happens if someone has a medical emergency in the slums. “If they have money, they live. If not, they die.” I just imagined a child getting hit with something incredibly painful like renal colic (and believe me, it is excruciating) and not being able to get help. I can’t imagine the strain on a parent going through that. I think I would rather have a finger chopped off. Seriously.

I think in the West we just tune it out when we see it on TV. But you can’t tune it out when you drive by mile after mile after mile of people living essentially in garbage dumps. I think we treat our unwanted pets in the West with more concern than we have for a starving 2-year-old half way around the world. I was frequently asked what I was thinking about, and once I replied “What it would be like to have everyone in India experience a little of America, and everyone in America come see this.”

A Familiar Site in Bombay

The Traffic

It really isn’t accurate to call it traffic. It is more appropriate to say that chaos reigns on the roads. It’s just a free-for-all out there. I would never recommend that a Westerner rent a car and attempt to drive. You will spend all of your time in a state of confusion, and you will hold up traffic while you try to figure out what to do. The constant honking (in lieu of signaling) was unnerving. For me, Hell would be having to be a cab driver in Bombay for all eternity.

Sitting in an Auto Rickshaw

The roads are shared by people, bikes, motorbikes, auto-rickshaws, and cars. I frequently observed traffic going the wrong direction, and it was quite normal to have someone turn directly across your path. We had drivers who took us from place to place, and they would pass people on blind curves and hills, and sometimes they even passed someone in the act of passing someone else. I don’t think we have a proper frame of reference in the West for the “traffic” in India; especially in the big cities. (And of course this means a constant haze hung over Bombay while I was there, which presumably gets scrubbed during the monsoon season).

The People

The population density is something else. I once wondered aloud just how many people I had seen on this trip. Kapil, the guy I was traveling with, said “Probably a good fraction of all the people you have ever seen in your life.” That is not an exaggeration. We traveled around the country, and with very few exceptions there were people lining the streets everywhere. Several times I would observe a crowd and wonder what was going on, but there was nothing going on. It was just a crowd. But it looked like a constant stream coming out of a major sporting event.

Despite the crowded conditions, I only saw violence once – when a man tried to drag another out of a car after a wreck. The people seem to cope quite well. Crime doesn’t seem to be nearly the problem you might expect in a city that size.

But with that many people comes a great deal of garbage. There was trash everywhere, and most of the time you could smell rotting garbage. One night we stayed well north of the city, but every once in a while my room would fill up with a garbage smell. I presumed the wind had shifted from Bombay.

Travel

It takes forever to get anywhere. You look at a place, and think “It’s only 100 miles.” 3 hours later, you still aren’t there. We spent 20 hours on the road over the course of 4 days. They don’t have rest stops and such with facilities that I could see. But the people I was traveling with never needed them. We would spend 7 hours in the car and never stop for a bathroom break. Needless to say, I limited my water intake on the trip, as I found that bathrooms were treated as a precious commodity. On a couple of occasions when I was in a meeting, I asked for the restroom and found someone standing outside of it, and a sign that said “VIPs and guests only.”

I traveled by train as well. It isn’t for everyone. If you like hot, sweaty bodies packed in like sardines (and that’s in 1st Class), then go for it. It took us an hour to get to our destination, and during that ride there were constantly people hanging out of the open doors, and it was standing room only. I wondered whether the people in 2nd Class were stacked like cord wood.

Conclusions

India was an eye-opening experience for me. I managed not to get sick while I was there, and I credit my host Kapil for his constant advice on what I should and shouldn’t eat and drink. (I don’t recommend the buffalo milk, by the way). The contrasts were amazing. Outside a cluster of $400/night hotels was the worst poverty I have ever seen. I once saw a guy pulling a hand cart and talking on a cell phone. Houses in the slums had satellite dishes on top of them. A number of times we walked down hallways of buildings that looked to be 100 years old and decrepit, and then stepped into one of the most modern offices you have ever seen.

One of the things this trip has done for me is to highlight the importance of efforts to transition to a more sustainable lifestyle and avoid the kind of collapse that is often discussed in relation to Peak Oil. I think if more people understood just how far society could fall - and I saw that in the slums of India - we could get serious about our energy situation in a big hurry.

How Corn Ethanol Destroys Rain Forests

At least according to a new story in Time, which is a blistering critique of our ethanol policies. It also documents the change of heart that has taken place among some prominent ethanol boosters.

The Clean Energy Scam

In Brazil, for instance, only a tiny portion of the Amazon is being torn down to grow the sugarcane that fuels most Brazilian cars. More deforestation results from a chain reaction so vast it’s subtle: U.S. farmers are selling one-fifth of their corn to ethanol production, so U.S. soybean farmers are switching to corn, so Brazilian soybean farmers are expanding into cattle pastures, so Brazilian cattlemen are displaced to the Amazon. It’s the remorseless economics of commodities markets.

It is a sobering article, and well worth a read. It does contain some errors. First, the author repeats (and actually embellishes) the claim that ethanol “provide(s) 45% of Brazil’s fuel.” As I have shown previously, from actual energy usage statistics, it is about 17% of transportation fuel on a volumetric basis, and 10% on an energy equivalent basis. Second, on carbon emissions, the author mentions that the “gains approached 90% for more efficient fuels.” Important to note that while these 80 or 90% carbon emission reductions for next generation ethanol are liberally thrown around, they are all based on models. Nobody has actually demonstrated this. To demonstrate it requires a cellulosic ethanol plant that is highly integrated. The waste biomass must be used to provide power for the plant. There are a number of problems to be worked through - if not we would already have a cellulosic ethanol industry - but these numbers continue to be repeated as if they were demonstrated.

One other paragraph that I want to mention:

There isn’t much sugar in the Amazon. But my next stop was the Cerrado, south of the Amazon, an ecological jewel in its own right. The Amazon gets the ink, but the Cerrado is the world’s most biodiverse savanna, with 10,000 species of plants, nearly half of which are found nowhere else on earth, and more mammals than the African bush.

I haven’t seen a lot of mainstream coverage of the situation in the Cerrado, but I did write about it in the renewable diesel chapter that I recently contributed to a book that is still pending publication. When proponents say that sugarcane isn’t grown in the Amazon, they are right. But the story is much more complex than that.

Delusions of a Harvard Professor

A lot of people presume that technology is going to provide a nice, cost-effective solution to our energy problems. Who could blame them, when you have people like Ricardo Hausmann, the director of Harvard University’s Center for International Development telling them that it’s all true? Professor Hausmann expressed this view in an Op-Ed piece in Financial Times:

Biofuels can match oil production

Hausmann, like so many others, doesn’t have a clear understanding of just how much oil we actually consume. As I have pointed out before, the entire U.S. output of ethanol is only equivalent to a single mid-sized oil refinery. The scale difference is immense. And Hausmann’s article represents the kind of delusional thinking that runs rampant among those who don’t have a solid grip on our energy usage:

Peering into the future seldom produces a clear picture. But this is not the case with bioenergy. Its long-term impacts on the global economy appear to be pretty clear, making many long-term predictions quite compelling, including the demise of the price-setting power of the Organisation of the Petroleum Exporting Countries and the end of agricultural protectionism.

No, we usually can’t see the future, but this time it’s different. Lots of people disagree with what he sees, including the EIA who forecasts biofuels to supply less than 2% of our liquid fuel needs by 2030. But the Harvard Professor peers into the future, and the view is clear.

First, technology is bound to deliver a biofuel that will be competitive with fossil energy at something like current prices.

How about a couple of corollaries?

Technology is bound to deliver interstellar flight that will be competitive with international air travel at something like current prices.

Technology is bound to deliver a cure for cancer that will be competitive with a tooth extraction at something like current prices.

How do I know these things? Because it’s technology. And I know that looking into the future seldom produces a clear picture. But this is not the case with space flight or cancer cures.

Brazil has been exporting ethanol to the US at an average delivery price of $1.45 for an amount with the energy equivalence of a gallon of petrol. It is doing so profitably and in increasing amounts, in spite of a 54 cents a gallon tariff to protect American maize-based ethanol producers. Many countries are following suit.

Well then there’s our solution. All we have to do is use technology to move the U.S. and Europe to the tropics, where high year-round levels of solar-insolation are key to producing cheap ethanol. Then, it should be a simple matter to get the average American consumer to cut their oil usage from 27 barrels a year to the 4.2 barrels that the Brazilians use. Problem solved. The future has never been clearer.

I can’t read any more of it. I have exhausted today’s quota of sarcasm just addressing his first 2 paragraphs.

Letter to CNN on Inaccuracies

Dear CNN,

Over the weekend, I watched your special report We Were Warned: Out of Gas. I had previously seen the original version, “Out of Oil”, and wrote to CNN at that time pointing out a number of inaccuracies in the report. (It appears that the transcript still reflects the earlier version). Those inaccuracies remain in the newer version, so again I feel compelled to point them out. While I think the overall message of the report is essential, you give critics ammunition by not having all of your facts in order. So let’s look at some points.

First, we have Frank Sesno stating “Ethanol now accounts for nearly 40 percent of Brazil’s transportation fuel.” This is inaccurate. Diesel accounts for over 50% of transportation fuel. Gasoline provides 26%. Ethanol, by volume, comes in at 17%. But because ethanol has lower energy content, the actual energy contribution is around 10%.

Second, we have Sesno stating “Ethanol helped Brazil beat its oil addiction, and with sales and exports growing, its profitable, no more government money.” Considering that Brazil gets 90% of their energy from fossil fuels - including a large proportion from oil - I would hardly call that beating their oil addition. What they have done, as a result of aggressive domestic oil policies, is to use their own oil instead of depending on imported oil. This is possible because Brazil has an oil supply/demand picture far more favorable than does the United States. However, I would point out that the car that Sesno was driving around in has numerous parts that were derived from imported oil. So, Brazil still has an oil addition, just like the rest of the world.

Third, we have Sesno asking “So I’m thinking, why can’t I do this in America?” I can easily answer that question for him. The reason is that Brazil domestically produces over 3 barrels of oil per capita each year. This is almost enough to meet the demand, which is around 4 barrels per person. Other sources, including ethanol, are able to close that gap. The U.S., on the other hand, produces 11 barrels per person, but we use 27 barrels per person. The only way we can close that large gap is with imports. No way could we do it with ethanol, unless we drastically reduce that gap by reducing demand. We also need to consider the fact that Brazil makes ethanol out of sugarcane - far more efficient than doing so from corn - and that the population is quite a bit smaller than that of the U.S. The fact is that the U.S. couldn’t replicate what Brazil has done even by turning the entire corn crop into ethanol. The lesson we can take from Brazil is that we need to use a lot less oil in the U.S.

On the question of why distribution for E85 is limited, there seems to be this widespread misconception that this is preventing further penetration of ethanol into the market. In fact, the amount of ethanol we currently produce could not even provide a nationwide E10 blend. If we had E85 pumps at stations from coast to coast, most of them would simply have no product to sell.

Finally, on the topic of hydrogen, Sesno states “Pollution-free technology, but years, probably decades before these cars are king of the road.” This technology is far from pollution-free. Over 95% of all hydrogen is produced from natural gas. So while a hydrogen car may emit no pollution, there was a lot of pollution generated in the production of the hydrogen. The hope is that some day hydrogen will be economically produced via renewable sources, but the possibility is distant at best.

In conclusion, the report delivers a needed message. But the inaccuracies distract from the message. I hope that CNN will see fit to correct these errors in the future.

Sincerely,

Robert Rapier
Chemical Engineer
Aberdeen, Scotland

Ethanol in the News

There were several ethanol stories in the news today. It was a mixed bag. From BusinessWeek:

Ethanol’s Growing List of Enemies

Paul Hitch has spent his entire life raising cattle and hogs on a stretch of the Oklahoma panhandle he says is “flat as a billiard table.” But he worries that they’ll face mounting pressures in the industry, particularly because of the soaring price for corn, which the business depends on to feed the livestock. In the past year, corn prices have doubled as demand from ethanol producers has surged.

“This ethanol binge is insane,” says Hitch, who’s president-elect of the National Cattlemen’s Beef Assn. (NCBA). “This talk about energy independence and wrapping yourself in the flag and singing God Bless America — all that’s going to come at a severe cost to another part of the economy.”

“The government thinks it can pick a winner, but they should allow consumers to pick their own,” says Demian Moore, senior analyst for the nonprofit Taxpayers for Common Sense. “Corn ethanol has failed to prove itself as a reliable alternative that can exist without huge subsidies.”

Seems cattlemen in general are not too happy about the ethanol situation. The prosperity of the corn farmer is coming at their expense:

Energy Interdependence

A frightening number was released by the labor department on March 15. February prices for “crude foodstuffs and feedstuffs” were 22.73% higher than a year ago. Wholesale consumer food prices were 6.8% above last year, too. Even more frightening, the February number was 29.25% higher than it was in May, its lowest point of 2006. It has all the potential of being worse and longer lasting than the consistent double digit increases we saw from mid-2003 to mid-2004.

Most of the increase we saw in February is the price we’re paying for trying to buy energy independence with our corn crop. It’s a double whammy, a perfect storm of a too-quick demand on American agricultural resources to pay for decades of unbridled energy consumption and a need by elected officials to prove they’re doing something to end our dependence on tenuous Middle Eastern sources of oil.

This was an interesting read:

Paying the Price for Biofuels

You can hardly open up a major newspaper without encountering the latest hype about biofuels: they’re going to save oil, reduce pollution and prevent climate change.

Bill Gates, Sun Microsystems’ Vinod Khosla, and other major venture capitalists are investing millions in new biofuel production, whether in the form of ethanol (mainly derived from corn in the U.S. today), or biodiesel (mainly from soybeans and canola seed).

Several well-respected analysts have raised serious concerns about the rapid diversion of food crops toward the production of fuel for automobiles.

WorldWatch Institute founder Lester Brown, long concerned about the sustainability of world food supplies, warns that “Cars, not people, will claim most of the increase in grain production this year.” The grain required to make enough ethanol to fill an SUV tank is enough to feed a person for a whole year.

One study, originating from the University of Minnesota, is moderately hopeful in the first two areas, but offers a strong caution about land use.

This paper, published in the July 25, 2006 edition of the Proceedings of the National Academy of Sciences, concluded that ethanol production and use offers a modest net energy gain of 25 percent over oil, resulting in 12 percent less greenhouse gases than an equivalent amount of gasoline. The numbers for biodiesel are more promising, with a 93 percent net energy gain and a 41 percent reduction in greenhouse gases.

I don’t even know where to begin on this one:

Science shows ethanol good for America

Suddenly in America, a multitude of so-called experts have become vocal in their attacks on renewable fuels - fuels that just might break the stranglehold that oil-producing countries have on us.

Using a weighted balance of 1, ethanol has an energy balance of 1.3 to 1.8 while gasoline has an energy balance of .8. The same rules were applied to both sources by comparing transportation, refinery costs and handling.

With the wise use and advancement of ethanol production, a 90 percent reduction in the use of gasoline is possible.

Therefore, the cost of extracting a gallon of ethanol is significantly lower than extracting a gallon of gasoline from crude oil.

Somebody needs to dispel the myth that there won’t be enough land to produce this source of alternate fuel.

And finally, Vinod Khosla makes an ethanol investment that I think will actually be viable long-term:

Ethanol Company Starts Brazil Operations

Brazilian Renewable Energy Company Ltd.’s founding shareholders include venture capitalist Vinod Khosla, American supermarket magnate Ron Burkle, America Online founder Steve Case, former World Bank President James Wolfensohn and film producer Steven Bing, the company said in a statement.

The United States is the world’s largest ethanol producer; Brazil is No. 2, but is the biggest exporter and has ample land available to boost production.

Brazilian ethanol is made from sugar, which is significantly cheaper than production of the fuel from corn, the raw material in the United States.

Key Questions on Energy Options

A question was recently posed to me: What is the most important question concerning ethanol production? That got me to thinking about important questions regarding not only ethanol, but all of our energy sources. There are a number of issues that we must carefully consider for any of our potential energy sources.

In my opinion, they are:

1. Is the energy source sustainable?

2. What are the potential negative externalities of producing/using this energy source?

3. What is the EROEI?

4. Is it affordable?

5. Are there better alternatives?

6. Are there other special considerations?

7. In summary, are the advantages of the source large enough to justify any negative consequences?

For the purposes of this essay, I want to focus on energy sources for transportation. Let’s look at some of our options, and get a better handle on why we have opted for the energy sources we presently use. I will not cover all of the options. In fact, nuclear, which is likely to play a bigger part in the future, is not discussed simply because I don’t know enough about it (I don’t know the EROEI, for instance).

A few comments here, as some of the questions warrant additional comment. With respect to sustainability, just because a fuel is not sustainable does not immediately disqualify it from consideration. It just means that there must eventually be something else to take its place. This could even be another unsustainable option, but these unsustainable options are unsustainable for a reason. It would be preferable to move to something sustainable.

Likewise on the negative externalities. There are negative externalities that we can tolerate, and some we can’t, but most fall in between. Is increased pollution a tolerable negative externality? It obviously depends on the level and type of pollution. If the pollution level for a relatively benign substance goes from undetectable to barely detectable, that is probably an externality that we can live with. Others aren’t so clear cut, but all need to be weighed against the perceived benefits.

The question of affordability is a really loaded question, as this will mean different things to different people. Does affordability mean that I can commute in a Hummer 40 miles one way to work with minimal economic impact? Or does it mean that I can continue to drive my subcompact a few miles per week while still being able to afford food? These are issues that we can discuss.

Liquid Fossil Fuels

1. Clearly not sustainable.

2. The potential negative externalities are many. Among them are Global Warming, increased pollution, using our military to keep supply options open, and potentially enabling the earth to be populated beyond its carrying capacity.

3. The energy return on fossil fuels is quite high. Despite publications that have suggested that the energy return on fossil fuels is less than 1.0, the actual energy return (from oil in the ground to fuel in the tank) is in the range of 6.0 – 7.0. That is, for 1 BTU of energy expended, at least 6 BTUs of fossil fuel can be extracted from the ground and processed into liquid fuels for a net of 5 BTUs.

4. Yes, this is our most “affordable” energy option with respect to the price we pay at the pump.

5. It depends on the definition of “better.” If better means a cheap option that supplies the U.S. with the current level of energy consumption, then “No.” But I would define better such that the source is sustainable and negative externalities are minimized. In that case, there are better alternatives, which will be covered.

6. One special consideration here is the relying on fossil fuels puts our energy security squarely in the hands of the Middle East, an intolerable situation in my opinion.

7. No.

I did not break out GTL and CTL via Fischer-Tropsch separately, although perhaps I should have. I have voiced my concerns about those in a previous essay - XTL: Promise and Peril.

Grain Ethanol

1. Not sustainable.

2. Again, many potential negative externalities. Among them are loss of topsoil, increased pollution from pesticide and herbicide runoff, aquifer depletion, and an increase in food prices due to increased grain demand (a positive externality to those who farm).

3. The energy return on grain ethanol is very low. Published studies put this number at around 1.3, but the return for fossil fuels in and ethanol out averages less than 1.1. Animal feed byproduct that is given a BTU value pushes the EROEI up to 1.3. Therefore, for 1 BTU of energy expended, less than 1.1 BTUs of ethanol can be produced, along with an additional 0.2 BTUs of animal feed. The net is then 0.3 BTUs with the byproduct credit, or about 1/17th of the fossil fuel net.

4. It is affordable, due to direct subsidies. But based on the current spot price of ethanol, it is slightly over twice the cost of regular unleaded gasoline on a BTU equivalent basis.

5. Yes. Even staying within the ethanol category, there are better choices.

6. The business of grain ethanol has revitalized many rural communities, and has made farming much more profitable. However, it also encourages farmers to preferentially plant corn instead of less environmentally harmful crops. The fossil fuel inputs into ethanol production are also largely non-liquid (natural gas and coal). In the case of natural gas, this makes a fine transportation fuel. But some ethanol supporters correctly point out that we have lots of coal, and we could use that as our primary energy source for ethanol production. Just don’t tell me it’s renewable in that case!

7. No.

Grain ethanol is not sustainable for primarily 2 reasons. First, it involves a loss of topsoil, and in many areas a depletion of fossil aquifers. The amount of topsoil loss has been subject to much debate, but it will vary based on many factors. Some areas are certainly more sustainable than others. The other concern is the high degree of embedded (and unsustainable) fossil fuels required for grain ethanol production. This means that in addition to the direct negative externalities, you can add secondary negative externalities caused by the usage of the fossil fuels.

The pollution issue, in my opinion, is quite serious but is typically ignored by ethanol boosters. This issue was discussed last year in an article in CorpWatch. After discussing the “carbon monoxide, methanol, toluene, and volatile organic compounds” emitted by ethanol plants, the article addressed the issue of pollution caused by corn farming:

Modern corn hybrids require more nitrogen fertilizer, herbicides, and insecticides than any other crop, while causing the most extensive erosion of top soil. Pesticide and fertilizer runoff from the vast expanses of corn in the U.S. prairies bleed into groundwater and rivers as far as the Gulf of Mexico.

The nitrogen runoff flowing into the Mississippi River has fostered a vast bloom of dead algae in the Gulf that starves fish and other aquatic life of oxygen.

To understand the hidden costs of corn-based ethanol requires factoring in “the huge, monstrous costs of cleaning up polluted water in the Mississippi River drainage basin and also trying to remedy the negative effects of poisoning the Gulf of Mexico,” says Tad Patzek of the University of California’s Civil and Environmental Engineering department.

“These are not abstract environmental effects,” Patzek asserts, “these are effects that impact the drinking water all over the Corn Belt, that impact also the poison that people ingest when they eat their food, from the various pesticides and herbicides.” Corn farming substantially tops all crops in total application of pesticides, according to the US Department of Agriculture, and is the crop most likely to leach pesticides into drinking water.

While banned by the European Union, atrazine is the most heavily used herbicide in the United States - primarily applied to cornfields - and the EPA rates it as the second most common pesticide in drinking wells. The EPA has set maximum safe levels of atrazine in drinking water at 3 parts per billion, but scientists with the U.S. Geological Survey have found up to 224 parts per billion in Midwestern streams and 2,300 parts per billion in Corn Belt irrigation reservoirs.

In my opinion, these are negative externalities just as serious as those posed by fossil fuel usage. Yet this is the alternative that we are scaling up just as fast as we possibly can. The real problem is that the negative externalities don’t directly and immediately impact most people’s lives, so they pay no heed to them. Sure, increased ethanol production might cause atrazine levels in drinking wells to increase, but it’s in someone else’s water. “It’s not my problem if it’s not in my water” is the attitude of most people. But I doubt anyone personally affected by this is going to consider it an acceptable externality.

Sugarcane Ethanol

1. Sustainable, for reasons I outlined in this article.

2. Few potential negative externalities to my knowledge. I have heard mention that expanded sugarcane production will be at the expense of rain forest, but the sugarcane plantations in Brazil are not near the rain forests. I do not know if rainforests in other tropical countries may be put in danger by expanded sugarcane production.

3. The energy return on sugarcane ethanol appears to be in the 8/1 range, which would make it better than gasoline. More on that below.

4. It is affordable, but in the U.S. we punish Brazilian ethanol with a $0.54/gallon tariff to protect our unsustainable corn ethanol production.

5. For a liquid fuel that will fit in the current transportation infrastructure, I don’t think sugarcane ethanol can be beaten with existing technology. But it can’t provide our current level of energy usage.

6. The industry can provide an economic boost to tropical countries, where it is sorely needed.

7. In my opinion, the advantages of sugarcane ethanol justify the costs, provided habitat is not being destroyed to grow more sugarcane.

I find it shameful that the U.S. subsidizes an unsustainable and polluting industry like grain ethanol, and punishes a sustainable industry like sugarcane ethanol. Yet even with those tariffs in place, Brazil can still ship their ethanol to the U.S. and compete with homegrown corn ethanol prices.

The energy return on sugarcane ethanol as it has been calculated does appear to be in the 8/1 range, which would make it better than gasoline. On the face of it, this seems absurd. Nature has already done the major processing for fossil fuels, and turned ancient plant material into long-chain, energy dense compounds. In the case of sugarcane ethanol, a lot of energy inputs are required, especially for purifying the ethanol, but those inputs are being satisfied by burning the sugarcane ethanol residues to produce process heat. Therefore, they are not being counted against the energy output.

However, gasoline accounting is not done in this manner. When oil is refined to liquid fuels, a lot of fuel gas is produced. That fuel gas tends to be burned in the refinery to produce process heat, but I have still charged that against the energy balance I calculated above. If I had done the energy accounting as is done with sugarcane ethanol, one could state that the energy return of gasoline is actually only the initial energy required to get the oil out of the ground, which averages about 17/1 worldwide. The refining step would get a free pass, since the energy in the oil is ultimately used to refine the oil. So no, the energy balance of sugarcane ethanol is not in fact better than that for gasoline.

Despite that, I believe sugarcane ethanol is a good option for mitigating a portion of our fossil fuel usage because it is renewable, and it lacks the negative externalities of fossil fuels. However, our present usage is much too great to be offset with sugarcane ethanol alone.

Cellulosic Ethanol

1. Sustainable.

2. Few potential negative externalities depending on the biomass source.

3. Unknown.

4. Presently, despite frequently optimistic claims, it costs significantly more to produce cellulosic ethanol than to produce corn ethanol.

5. Yes.

6. There are numerous sources of biomass that could be used to produce cellulosic ethanol.

7. Time will tell, but cellulosic ethanol did not just come onto the scene. Researchers have been trying to commercialize it for many years without much success. It will require several breakthroughs, none of which are certain to occur, before cellulosic ethanol contributes to our energy requirements.

Due to the lack of commercial cellulosic ethanol plants, the energy return is largely unknown. On the one hand, fossil fuel inputs for growing the biomass will likely be much lower than for corn. However, the ethanol concentration yielded from a cellulosic ethanol process tends to be significantly lower than the concentration obtained in a conventional ethanol production. A presentation at last year’s St. Louis Renewable Energy Conference from Keith Collins, Chief Economist at the USDA, showed that corn ethanol yields 14-20% ethanol, while cellulosic is a paltry 4%. That means a lot more energy for purification.

In addition, more processing steps are required. I have seen EROEI estimates for cellulosic ethanol that range from less than 1 to greater than 8. Based on the factors mentioned here, the true estimate is likely to be closer to 1. But the truth is we just won’t know until some commercial facilities are up and running.

I don’t discount that technical improvements will occur with cellulosic ethanol. But many people who don’t understand the nature of the challenges (or who have a vested interest not to) have presumed technical breakthroughs of a practically magical nature. If I announced that we would be making regular trips to Mars within 1o years, most people would reject this because they have some understanding of both the technical difficulty involved, and they understand that the costs would be enormous. Yet those same people may have no problem believing that we are going to transition our fossil fuel infrastructure to a cellulosic ethanol infrastructure. Yet the technical challenges involved are of the magnitude of ferrying us all back and forth to Mars.

Biodiesel

1. It depends on the source.

2. Biodiesel in general suffers from far fewer negative externalities than most biofuels, but palm oil gets mixed reviews. On the one hand, it is a tropical crop like sugarcane ethanol, and the EROEI appears to be very good. On the other, rainforest is being destroyed to grow new palm oil plantations.

3. By most accounts, the EROEI is greater than 3, which is respectable for a biofuel.

4. It is more expensive than conventional diesel. Current subsidies make it affordable.

5. Biodiesel can be a sustainable contributor toward energy security.

6. Diesel engines are much more efficient than gasoline engines, which reduces the overall fuel requirement.

7. Again, it depends on the source. If we are going to chop down rainforest to plant palm oil plantations, then no. If we are going to use waste oils and existing high oil-yielding crops (grown sustainably), then yes.

I think the U.S. made a mistake by not favoring the diesel engine over the gasoline engine as has been done in many other countries. Diesels are much more efficient than gasoline engines, so a diesel fleet would stretch the fuel supply.

Biodiesel can be produced sustainably, but caution is warranted. We first need to make sure that absolutely all of the waste vegetable oil in the country gets collected and turned into biodiesel. But even growing crops for biodiesel may be done sustainably. Biodiesel derived from soybeans, while expensive to produce, comes at a much lower environmental price and a much better EROEI than corn ethanol. Then there is the added benefit of 1). A higher BTU value per gallon; and 2). The higher efficiency of the diesel engine. These factors combined mean that we would need less than half the biodiesel to drive the same amount of miles we could if using ethanol.

At this stage, I would put algal biodiesel in the same category as cellulosic ethanol: Technical feasible, sustainable, but it may not be commercial feasible. Also as in the case of cellulosic ethanol, there is much hype but much of it is without merit at this time. Magical technical breakthroughs are again being presumed as a given by many people. I have even been guilty of this to some extent.

Biomass Gasification

1. Sustainable.

2. Care has to be taken with respect to the source used for gasification. There are also potential air quality issues from a large-scale gasification program.

3. I have not seen an EROEI calculation, but I expect it to be much higher than for cellulosic ethanol. I would estimate an EROEI in the 6-10 range (based on the method I use for calculating a fossil fuel EROEI).

4. Currently capital costs are too high to enable biomass gasification to compete.

5. Biomass gasification has a chance to be a highly sustainable contributor toward our energy demands.

6. Biomass gasification could be used either to produce electricity (e.g., use biomass instead of coal in a power plant application) or as the first step in a liquid-fuels program. More below.

7. Yes.

I have described what I believe are the advantages of biomass gasification over cellulosic ethanol previously in Cellulosic Ethanol vs. Biomass Gasification. Briefly, cellulosic ethanol converts a small portion of the available biomass. Gasification converts all of it into syngas, which can then be used to make a wide variety of chemicals, including methanol, ethanol, or diesel.

The main problem with implementing a large scale biomass gasification is that it is presently just too expensive. The capital costs associated with processing the biomass are very high. Current estimates, which I documented in the afore-mentioned article, put the cost of a biomass gasification plant at about 7 times the per barrel cost of a conventional oil refinery or grain ethanol plant, and double the costs of a coal-to-liquids plant. At some point we may be willing to pay these costs for our fuel, but it won’t be until other options are largely exhausted.

Wind and Solar

1. Sustainable.

2. Few potential negative externalities to my knowledge. Wind turbines have been implicated in the deaths of some bats and birds, and there may be some increased pollution as a result of solar panel manufacture.

3. The energy returns have been calculated in a number of different ways, but most sources show an energy balance more favorable than that of most liquid fuels.

4. Wind-generated electricity is affordable, but solar is still out of reach for the average person.

5. For electricity generation, I think these are the best, most sustainable options.

6. There are a number of special considerations for this option. First, wide-spread electric transport – an absolute must in my opinion - is not yet a reality. Battery technology still doesn’t quite have the cost/benefit ratio that many consumers desire. Also, if the U.S. moves toward more electric transportation a lot of infrastructure will need to be upgraded. There are also currently issues with a shortage of silicon for making solar cells, which is keeping prices elevated. Finally, there is the issue of intermittency for both of these sources. Improvements in storage technology (such as compressed air energy storage) are needed.

7. I believe that we need to move toward transportation electrification, which in my opinion would make wind and solar power more attractive options than any of the liquid fuel options (with the possible exceptions of sugarcane ethanol and waste-derived biodiesel).

The potential advantages of a solar and wind-powered transport system are so great that our current infatuation with grain ethanol is a tremendous misallocation of resources. My vision for the future would involve some solar panels on the vast majority of houses around the world providing the electricity to run our small PHEVs. I truly believe this is the model that we will eventually implement.

Conservation

This essay wouldn’t be complete without a discussion on conservation. Consider that we could save more fuel, while stretching our budgets, by choosing to embrace conservation. If we chose more fuel-efficient cars, slowed down, took fewer trips, and walked or rode a bike instead of driving, just think about the fuel we could save. We would immediately reduce our dependence on the Middle East, because we just wouldn’t need as much oil. We would increase the chance that some combination of alternatives could supply a level of energy that would allow us to maintain a decent standard of living.

Yet in this rush to alternatives, conservation is typically given just a bit of lip service. Our politicians will say “Ethanol, ethanol, ethanol, and yeah, we should conserve.” But money is not being thrown at conservation. Imagine if instead of spending over $2 billion a year in direct ethanol subsidies, we directed that money into conservation measures. We could offer everyone in the country direct tax breaks for purchasing fuel efficient vehicles. To me, such a policy would make a much greater contribution toward our energy independence than the policies we currently have in place. I believe we have to demand that our political leaders put more emphasis on conservation as a piece of our energy puzzle.

And don’t give me Jevon’s Paradox. If as a result of increased conservation in the U.S., China happens to consume the energy we saved, that’s ultimately too bad for China. We will have still reduced our energy dependence and taken a step toward sustainability. When the full force of Peak Oil hits, those who have thrown out Jevon’s Paradox as a reason not to conserve will finally understand the foolishness of such reasoning. What is going to matter is that we have a small energy footprint and are as sustainable as we can possibly be. Throwing out Jevon’s Paradox as an excuse not to conserve will never allow us to prepare for a post-peak world.

Report: Brazilian Ethanol is Sustainable

For those who are expecting a Brazilian debunking, I am going to have to disappoint you. My previous debunking was not addressed at the issue of whether Brazilian ethanol is sustainable, but rather whether their example can be exported to the U.S. Whenever the topic of Brazilian sugarcane ethanol has come up, my response is generally that from what I have read, it appears to be a pretty good deal. Furthermore, I have never seen evidence to dispute the high EROEI claims of sugarcane ethanol. However, I will usually note that there are few comprehensive reports that have examined the process in detail, and I would feel more comfortable about the positive assessments if someone did such a study.

My wish has been granted. IEA Bioenergy has recently publicized a report entitled “Sustainability of Brazilian bio-ethanol”. The report was commissioned by The Netherlands Agency for Sustainable Development and Innovation, and is in my opinion the most important endorsement of Brazilian ethanol to date. The work was conducted by the Copernicus Institute at Utrecht University in the Netherlands and at the University of Campinas in Brazil. The 136-page report is publicly available here (1.2 meg PDF).

The purpose of the study is explained in the introduction to the report:

The Dutch society recognizes the need for sustainable production and use of biomass. This has been expressed by environmental groups and the Parliament. The Dutch government decided to seek solutions by developing sustainability criteria and certification of biomass by a commission sustainable production of biomass. Between January 2006 and July 2006 these criteria have been developed. Parallel to these developments, in February 2006 this project was commissioned by SenterNovem on behalf of the Dutch Ministry for Housing, Spatial Planning and the Environment. As Brazil is one of the most likely countries to export bio-ethanol from sugar cane to the Netherlands, the sustainability of Brazilian bio-ethanol is the main topic of this report.

The main objective of this report was a comparison of Dutch sustainability criteria and the current Brazilian practice, and quantification of the consequences for ethanol production in terms of production method and production costs if these sustainability criteria are applied. To this end, the Dutch sustainability demands for bio-ethanol were investigated, including stakeholder consultation in the Netherlands, and an extensive assessment of the current ecological, economic and social impacts of ethanol production based on sugar cane in Brazil was carried out.

This is precisely the kind of study that has been needed to verify that claims of Brazilian ethanol sustainability are on sound scientific footing. According to the report, there are some areas of concern, but none that should prevent Brazilian ethanol from meeting the sustainability criteria:

While the current study contains many different types of uncertainties, no prohibitive reasons where identified why ethanol from São Paulo principally could not meet the Dutch sustainability standards set for 2007. In many impact categories, Brazilian ethanol from sugar cane scores average to (very) positive, see also Table I for a summary. For a number of other criteria, problems are identified, but it also appears that these may differ strongly between the individual plants. Furthermore, for most of these issues, measures can be identified to improve performance (when needed).

For the future and the whole of Brazil, too many uncertainties remain to determine whether also additional criteria from 2011 onwards can be met. First of all, it is as yet unclear how additional land use for sugar cane may cause indirect / induced land-use, and how large the actual impacts will be on land use, biodiversity etc. Second, it is also uncertain whether and how the Dutch sustainability criteria will deal with these indirect impacts, as these criteria are not yet clearly defined.

It is important to recognize that sustainability criteria lead to higher production costs - depending on the strictness of the sustainability criteria, we estimate additional ethanol costs of up to 56%, though in case mechanical green harvesting is applied, additional ethanol costs are estimated at 24%.While the latter may not necessarily be prohibitive given current oil prices, it is clear that some financial support is most likely needed to stimulate sustainable ethanol production.

The report examined a number of sustainability criteria. However, in this essay I will mention only two: EROEI and soil erosion.

What’s the EROEI?

One the issue of sugarcane ethanol EROEI, which has been debated here a great deal, the study mentioned two different literature reports. The first was by Oliveira et al. in 2005, and it concluded that the EROEI was between 3.1 and 3.9. The second report was by Macedo et al. in 2004 and it concluded that the EROEI was between 8.3 and 10.2. (Note that the “bad” EROEI was still over double the EROEI of corn ethanol.) Due to the huge disparity between the two papers, the authors took a look at the underlying numbers, and concluded that the discrepancy involved the amount of diesel used in the agricultural operations process. They ultimately tracked down another paper that agreed with the Macedo study, so they reasoned that the diesel consumption numbers used by Oliviera were erroneous. They therefore concluded that an EROEI between 8.3 and 10.2 was legitimate.

Not surprisingly, the greenhouse gas (GHG) emission reduction for sugarcane ethanol was estimated to be >80%. EROEI and GHG emissions are very closely related, such that a renewable energy source possessing a high EROEI should demonstrate a high level of GHG emission reduction.

Soil Erosion

One area that did not fare as well as sugarcane ethanol advocates have often advertised is on the issue of soil erosion. I have been told a number of times that there is no erosion from sugarcane production, or that production is managed such that the topsoil actually increases over time.

While the report noted that the erosion is lower than for crops such as corn, it did note:

Soil erosion in sugar cane is generally limited compared to conventional agricultural crops such as corn and soybeans, although the exact difference is dependant on local conditions. However, soil losses for sugar cane may vary dramatically from 0.1 t/ha/y to 109 t/ha/y, depending on many factors, such as the declivity, the annual rain fall, the management and harvesting system, etc.

The report did state that data on erosion from sugarcane production was limited, and that there were some studies that suggested little to no erosion. The report also indicated that the erosion issue should be studied more closely, and that a soil erosion management plan is required. They state that new compliance criteria are to be developed for 2011. In concluding the section on soil erosion, they state:

Soil erosion during sugar cane production can be a site-specific problem. Soil erosion rates under sugar cane production are limited compared to conventional cropland, but are likely higher compared to pastures. Data on soil erosion rates under various land use types are however uncertain. Soil erosion can be prevented in various ways, although it cannot be avoided completely. Consequently, only in case very strict soil erosion rates are applied (which goes beyond the approach applied in existing certification systems and guidelines) soil erosion could be an important bottleneck for certification. As far as soil erosion can be prevented, the costs are likely in the order of magnitude of a few percent of the production costs of ethanol. We conclude that soil erosion can be regarded in general as having a medium impact factor on soil erosion.

My guess is that the last sentence in that section was supposed to read “We conclude that soil erosion can be regarded in general as having a medium impact factor on the sustainability criteria.”

Implications for Tropical Countries

Based on the findings in the report, it suggests that many tropical countries have the potential for sustainable fuel production. This should be particularly true of any country that can grow excess sugarcane according to Brazil’s methods. The major caveat is that the soil erosion issue must be appropriately managed. Not only would this help certain countries achieve some level of energy security, but excess fuel produced for export would open up new opportunities for farmers, factory workers, etc. and generate income for the country.

Implications for the U.S.

The reason the Netherlands commissioned this study is that they want to transition to fuels that are produced in a sustainable manner. If Brazil or other tropical countries can produce enough fuel for export, it will benefit the U.S. just like it will benefit the Netherlands. However, the U.S. does have an import tariff in place that penalizes Brazilian ethanol in order to protect (unsustainable) homegrown corn ethanol.

One way the Brazilian example does not benefit the U.S. is in providing a template for success. As I have argued previously, Brazil’s particular situation is not applicable in the U.S. As I wrote in an article for World Energy Source, the U.S. uses 7 times the energy per capita that Brazil does. Our supply/demand imbalance gap is 16.9 barrels per person per year. Theirs was 0.2 barrels per person last year, prior to the opening of a new Petrobras platform earlier in the year (immediately after which they declared energy independence). Furthermore, we rely on a crop (corn) in the U.S. that is much less energy efficient, and has ten times the soil erosion of sugarcane production. Finally, we are not in a tropical climate, and therefore have a much shorter growing season than does Brazil.

Brazilian ethanol expert Milton Maciel, has echoed these arguments:

Sugar cane ethanol from Brazil is NOT a realistic target or a comparable model for USA ethanol from corn. It is very easy to replace all gasoline when you would only need 8 billion gallons per year and you have a generous plant that thrives rain-fed under tropical conditions, occupying less than 1% of a country’s arable land, to produce alcohol to replace 50% of all that gasoline. However, this cannot be extrapolated for USA’s conditions, neither for corn, not even for sugar cane in Southern states. So, realistically, let’s understand that sugar cane ethanol in Brazil is mangoes and corn ethanol in USA is apples.

Pipedreams

The Brazilian example does suggest some avenues ripe for exploration in the U.S. There are certain crops that are far less erosive than others. According to Table K.1 in the report, soil erosion for sugarcane and corn was 1.24 and 12.0 (t/ha/y) respectively. Note that erosion from corn is 10 times the erosion from sugarcane. Another listed crop, potatoes, had about half the erosion level of corn. However, the level of erosion for potatoes is still not sustainable, so we need to look to other crops if we are to maintain the integrity of our topsoil.

Imagine a couple of scenarios. First, imagine a variety of sugarcane that is bred/engineered to withstand more temperate climates. Imagine the Midwest covered in sugarcane instead of corn, and we would have taken a big step toward sustainability. Alternatively, imagine a plant that currently thrives in the Midwest, does not contribute to soil erosion, and produces sugar (easily converted to ethanol). I could envision something like Miscanthus, with an engineered gene(s) that allows it to produce sugar. If you have ever seen the ancestor of corn – teosinte - and compared it to modern corn, this idea does not seem out of the question. Again, if we could pull something like that off in the U.S., it could offset some of the decline in conventional oil production without exacting the high environmental price of alternatives like coal-to-liquids.

Selective Breeding Turned Teosinte into Modern Corn

Conclusions

The sustainability of Brazilian ethanol appears for the most part to be as advertised. The indications are that the EROEI is at least 8.3, which would actually make it better than for gasoline. (Incidentally, that brings to mind the question of why Brazil would want to export any ethanol; I would use my ethanol internally and would export my oil instead). The sustainability criteria that were used in this study are an example of what we should be doing for all of our fuel sources, and we should encourage those that meet these standards.

A Conversation with Vinod Khosla

Introduction and Background

In my recent essay Vinod Khosla Debunked, I challenged Mr. Khosla to a written debate on his recent ethanol claims. Mr. Khosla e-mailed me shortly after that essay appeared, and offered to discuss the matter by phone. I wanted to first make sure he understood my objections, so we exchanged several e-mails in which I spelled them out.

Finally, he called this morning and we spent about an hour and a half on the phone. There was very little small talk - no chit chat, jokes, or laughter. We got right down to business. I took a lot of notes, and I will try to reproduce the conversation. He encouraged me to report on what we talked about, and even offered to assist me in reproducing the details. He told me some things in confidence, and I think I have my notes flagged in each case so I don’t reveal something he doesn’t want revealed. I will attempt to report this as objectively as I can.

At my disposal, I had his presentation Biofuels: Think Outside the Barrel (10 meg PPT warning), a marked up version of his paper Is Ethanol Controversial?, and a list of talking points I had prepared so I wouldn’t forget to cover any major areas. Here are the talking points I had prepared beforehand. These were merely to help my thought process as we talked, and I didn’t cover them necessarily in this order.

1. Motivation?

Is your top priority making money?

Or helping society?

2. Energy balance for ethanol not better than gasoline

Think of energy consumed versus energy returned

Petroleum input is not consumed

Corn inputs are not counted

Comparing refinery efficiency versus an energy ratio

3. If the solution fails, what is the cost?

The white paper asked, but never answered this question

Wasted time and resources - Peak Oil looms

Public loss of credibility

Public disillusionment with alternative fuels

Lost opportunity - public was not encouraged to conserve

Status quo 10 years from now

4. Cost of ethanol versus gasoline

If ethanol is cheaper, why has rack price been higher for 25 years?

If ethanol is cheaper, margins are better, and so it should be able to grow quickly without legislation

Why do you accuse oil companies of gouging when ethanol has better margins?

5. Environmental issues with ethanol

Topsoil depletion; ramping up corn ethanol encourages this

Aquifer depletion

Corn growing pushed to marginal lands

Herbicide and pesticide runoff; ramping up ethanol will make this worse

How is this different than pollution caused by gasoline?

6. Over-promising technology

Nitrogen fixation - Holy Grail of crop science, but very complex problem

Cellulosic economics, yields, etc.

Can’t bank on these breakthroughs; but should fund research

7. Subsidies

If ethanol is so cheap to make, it doesn’t need subsidies

Many so-called oil subsidies don’t benefit the oil companies at all; they benefit consumers

8. Food versus fuel

This is already driving up grain prices

Grain stocks being drawn down to record low levels

Exports will be reduced to produce ethanol

9. Potentially better solutions

Carbon tax

Solar

Wind

Biodiesel (esp. algal)

Butanol

Biomass to electricity

Storage system technologies allowing renewable electricity

Electric cars (Tesla Roadster as example of feasibility?)

Electric rail (Alan’s proposal)

General move to electric transportation

Emphasize TOD thread

I didn’t expect to be able to go through the entire list, as that would have taken quite a while. But surprisingly, I did get through most of the list. I mentioned The Oil Drum several times, and I called his attention to the Vinod Khosla - Give Him Your Ideas thread. I told him he would find a lot of ideas for addressing our energy problems, from people who have put a lot of thought into this very issue. I told him some of the ideas were very good. He said that he does not have a large staff, but he would look through the thread (I also e-mailed him the link). He said he is looking for ideas that are pragmatic.

The Conversation

Mr. Khosla dominated the early part of the conversation. He approached it in the style of his presentations, in which he argues that this is the right path to take, and that it is feasible. In the early part of the conversation, he said he does not favor biodiesel. We didn’t get into the reasons, but my guess is that he doesn’t think it is scalable, nor an ideal solution for the cars Americans are accustomed to driving (this was a consistent theme). We didn’t discuss algal biodiesel, but from his tenor I believe he would have said it is worth funding, but still more of a research project compared to the current status of cellulosic ethanol.

The first thing I asked him was about his motivation: Money, helping society, or some combination? He said his primary motivation is to help society. He said he is very concerned about Global Warming, and thinks our dependence on foreign oil is great cause for concern. I told him that we are approaching this problem from different perspectives: I am approaching this from a Peak Oil perspective and that the clock is ticking. I don’t believe we can afford to spend time and resources pursuing pie-in-the-sky solutions.

I said that I wanted to address some specific claims from his presentations. I started off on the energy balance of ethanol versus gasoline. We went back and forth on efficiency versus EROI, but he finally preempted my entire argument by saying he doesn’t even care if the EROI is less than 1, because corn ethanol is merely priming the pump for cellulosic ethanol or butanol (which he favors). In fact, he acknowledged some of my arguments against corn ethanol, but said that corn ethanol is just a transitory solution. I told him that I disagreed with this; that corn ethanol would be around as long as the subsidies were there.

He went on to say that the ethanol plants he is building (I didn’t clarify whether these were Pacific Ethanol’s plants) would be similar to the E3 Biofuels closed-loop system. He said the capital costs are 2.5 times as high (because I specifically asked about that) but that the operating costs would be much lower. I told him that I agreed that this should be the model for building grain ethanol plants, but that we would have to see some in operation before we know if they live up to the claims.

I challenged the claim he made that Brazil displaced 40% of their petroleum with ethanol. He said he got that number from another presentation, and would be glad to change it if I can show him the data. He said he wants to be sure he has his facts correct. (I will be sending him the raw numbers on Brazil’s energy supply). [Update: He did in fact change that claim in his presentation after I showed him the data].

I challenged him on the oil company bashing. I said that I work for an oil company, yet I care a great deal about the environment and sustainability. I said that when he bashes oil companies, he is bashing a lot of good people with the same broad brush. He said “On this, we will have to disagree.” He went on to defend the bashing by saying it was political. He said he is trying to get the California Clean Alternative Energy Initiative passed, and Big Oil is spending a lot of money to fight him on it. So, he is bashing them in order to get support. Of course, I already knew all of this. I can live with a bashing, as long as it is factual. I told him that it is ludicrous to suggest that Big Oil is gouging when the profit margins on ethanol (or in Silicon Valley) are even higher. He again said that it was just politics. I just don’t agree that stirring up hatred toward a particular group is acceptable politics.

I brought up the “food versus fuel” issue, and he said he rejects that argument. He said that someone from Shell had come out and retracted an argument they made on this topic. I hadn’t heard anything about this, and couldn’t comment. But I did indicate that as we continue to ramp up corn ethanol, our corn exports will fall and people in 3rd world countries will go hungry. I told him the stories are already appearing in the media. He said that there is plenty of food in the world, and the problem is often ability to pay. I didn’t gain any ground at all in this argument.

He said that he has come out against the ethanol subsidies currently in place, and would like to see those subsidies shifted to biomass subsidies. I told him that would be a tough political sell, and he agreed. He said he has spoken out on the tariff that is slapped on Brazilian ethanol. He thinks eliminating this tariff would lower ethanol prices in the U.S. He also said that he has heard that Brazil is considering taking this issue to the WTO. On this issue, we agree.

I spoke of my concern that he is over-promising on cellulosic ethanol. I told him that my fear is that by making these rosy projections, the public will be lulled into complacency, and we don’t have time for that. After all, they think we are going to transition right into cellulosic ethanol after hearing his projections. I told him that I don’t believe his projections are realistic. He countered that they are realistic, and that he has seen a lot of research behind the scenes that is not yet publicly available. He said he has several cellulosic projects under way, and that he is in the business of making judgment calls. He also said there are about 50 projects (maybe it was proposals?) on cellulosic ethanol that are underway. Several times he compared his investments in cellulosic ethanol to his early investments in the Internet or other technologies that paid off despite the scoffers. He has this incredibly naive view that he is dealing with Moore’s Law here. Cellulosic ethanol has behaved nothing like Moore’s Law for the past 30 years, why does he expect it to in the next 30 years?

One of his consistent themes was that the solution has to be practical, and it had to fit today’s engines or the auto makers wouldn’t buy in. I told him that I considered this a problem; that the internal combustion engine is very inefficient. He agreed, but said a transition to electric would take time. He said it starts with hybrids, and then you improve the battery technology until the hybrid becomes more and more electric. He said he is investing in battery technology, and thinks this area has even more potential than ethanol. On this, I certainly agree.

Then we came to a matter of great disagreement. He said he believes cellulosic ethanol can displace petroleum because petroleum is expensive. But he didn’t give renewable electricity much chance of displacing coal, because coal is too cheap. He said that solar is 3 times the cost of coal-generated electricity, and that we have “an infinite supply of coal.” He said he is more interested in a liquid fuel replacement for petroleum. I, on the other hand, am more interested in moving our means of transport to renewable electric sources. [Update: I noticed recently that he has announced some investments in solar].

We discussed a carbon tax, and we were in agreement that this should be implemented. However, he feels like it will never be politically palatable. I just can’t understand this, and told him so. I think this could be sold to the public. You explain the reason for the tax: That it is designed to reduce demand and prepare us for a future of declining petroleum supplies. You can avoid it being a regressive tax by lowering tax rates or increasing the deductions for low-income taxpayers. There is a way to work this. He replied that it would break down when everyone tried to get the best deal for their own constituents. I just think this is too important an idea not to aggressively pursue it. A carbon tax would begin paying immediate dividends. I told him that we should have done this long ago, and we should have encouraged adoption of diesels like they did in Europe. He replied “What we should have done, or should do, is less important than what we can do.”

Areas of Agreement and Disagreement

We agreed on the following issues:

1. Current energy policy needs a dramatic facelift
2. A carbon tax is a good idea
3. Brazil is much more efficient at making ethanol than the U.S., and the ethanol tariffs should be lifted
4. Butanol may be a superior choice to ethanol
5. Grain ethanol subsidies should be eliminated
6. There is great potential in researching energy storage devices (e.g. batteries)

We disagreed on the following issues:

1. The issues surrounding corn ethanol aren’t significant since it will be a transitory solution
2. The solution must fit in today’s engines
3. Bashing oil companies is acceptable to achieve a political goal
4. Renewable electricity (solar, wind) can’t compete with coal
5. Cellulosic is scalable within the next 5 years
6. The consequences of failure to deliver can be very high
7. Food versus fuel will be a serious issue going forward

Conclusions

I already had a pretty good understanding of where he was coming from, but I have tried to accurately relay his position so that others may understand. This is the least I owe him after he spent that much time talking with me. However, we still have some fundamental areas of disagreement, and my impression is that he is concerned about oil depletion, but not in the way I am concerned. My worry is that over-promising on cellulosic ethanol will prevent us from getting very serious about taking the steps we need to take as a society toward powering down while we still have some choices. I think we need to fund cellulosic ethanol, but until there are a few pilot plants operating, we just don’t know if it will be feasible on a commercial scale.

I did have difficulty convincing him that corn ethanol is a bad thing, because his position is that it is merely a jumping off point to something much bigger. He said he wouldn’t be investing in cellulosic if we weren’t producing several billion gallons of corn ethanol. He said that corn ethanol is “priming the pump”, and has shown the feasibility of ethanol as fuel in the U.S.

I obviously have not captured the entire conversation, so if you have specific questions about a particular topic I will answer them. It was a worthwhile conversation from my point of view, because I think he understands that there are legitimate concerns from people other than special interests. We agreed to keep in touch as developments unfold.

Lessons from Brazil

Introduction

What if I told you that the key to U.S. energy independence is for each person to use 3 times the energy of the average Brazilian? Don’t believe me? See why in the following essay, also posted to The Oil Drum.

“Brazil has it figured out; why can’t we?”

The following claim from Tom Daschle and Vinod Khosla appeared in their recent New York Times editorial, Miles Per Cob (now behind a pay wall):

As Brazil’s “energy independence miracle” proves, an aggressive strategy of investing in petroleum substitutes like ethanol can end dependence on imported oil.

You may have also recently seen Dan Rather’s report The Ethanol Solution, in which he gushes over Brazil’s ethanol success and wonders why we don’t heed their example. Perhaps you heard Frank Sesno on CNN’s We Were Warned ask why the U.S. is not following Brazil’s example. The mainstream media have it figured out. The politicians have it figured out. Many ordinary Americans have it figured out. We just need to apply the Brazilian example to the U.S., and we will end our dependence on foreign oil. But is it as simple as that? Let’s investigate.

Warning: Reality Check Ahead

According to Per Capita Oil Consumption and Production, oil consumption in Brazil is 4.2 barrels per person per year. In the U.S., oil consumption is 27 barrels per person per year, 6.4 times as much per person as Brazil’s.

However, we do produce much more oil per person than Brazil. Each year the U.S. produces 11 barrels per person, compared to 3.35 barrels per person for Brazil. In order to achieve energy independence, the gap between demand and production must be closed. Brazil has to close a gap of 0.85 barrels per person per year (4.2 - 3.35). They produce sufficient ethanol to close this gap, and therefore they are energy independent. The U.S., on the other hand, has to close a gap of 16 barrels per person per year. The U.S. gap in production/demand is almost 19 times greater than the production/demand gap in Brazil.

Clearly, the U.S. has quite a large gap to close. But this is a difficult proposition. Not only do we use more energy per person, but the population of the U.S. is 110 million greater than that of Brazil. According to my calculations, we can’t possibly hope to close the production/demand gap with grain ethanol. Others have shown the futility of closing that gap with cellulosic ethanol here and here.

The Real Lesson from Brazil

Yes, Brazil has in fact “figured it out” with respect to energy independence. But the reason they achieved energy independence is primarily because of their frugal energy usage, not because of ethanol. Increase their energy usage to U.S. levels, and the “energy independence miracle” would quickly vanish. This is the factor that the media and the politicians have overlooked. On the other hand, if the U.S. had the same per capita energy consumption as Brazil, we would be net oil exporters. In fact, our per capita energy consumption could be 11 barrels per person per year - triple the consumption of Brazil - and our production and demand would be in balance. We would be energy independent.

The real lesson from Brazil is that energy independence can be achieved by slashing our energy usage. It is simply not realistic to expect the U.S. to achieve energy independence with biofuels - unless we sharply curb our consumption. The next time you hear someone say we should emulate Brazil’s example, ask them to calculate the amount of ethanol this would require, and ask them how we are supposed to produce that much. It is time to start demanding details from the “Brazil believers”. In doing so, we may convey the gravity of the situation to those who think ethanol will lead us to energy independence.

Wednesday Quick Hits

Plug-In Hybrids

The more I learn about plug-in hybrids (PHEVs), the more convinced I am that this would be a far better use of our alternative energy dollar than subsidizing corn ethanol. Learn All About Plug-In Hybrids (PHEVs) here.

Thanks to Leanan at The Oil Drum for highlighting this story. Scientists speak, but will the politicians listen?

Scientists Back Plug-In Hybrids

WASHINGTON - A group of scientists urged Congress on Wednesday to fund research for plug-in hybrid vehicles, touting the technology as another way to reduce the nation’s dependence on oil through the help of a simple electrical socket.

With high gas prices straining some Americans’ budgets, advocates of the alternative vehicles told a House committee that plug-in hybrids could reduce gasoline consumption and reduce air emissions. And while ethanol-fueled vehicles will require a better network of fueling pumps, a plug-in hybrid car could recharge at home.

“To think that you could pull into your garage at the end of the day and ‘fill ‘er up’ just by plugging your car into a regular, 110-volt socket in the garage is very appealing,” said Rep. Judy Biggert R-Ill., chairwoman of the House Science subcommittee on energy.

Plug-in hybrids combine hybrid technology — which uses both gasoline and electric power — with large batteries that can be plugged into a standard wall socket. To help learn more about the vehicles, Rep. Lamar Smith, R-Texas, said he would introduce legislation to provide $250 million in grants to research battery technology and develop a fleet of demonstration plug-in vehicles that could be further tested.

The article continues, with comments from some critics here.

Bad News for Brazilian Ethanol

Thanks to fallout at The Oil Drum for bringing this story to my attention.

The entire article is worth a read. Here are some excerpts of note:

Brazil’s Ethanol Lesson Is How to Manage Our Oil Addiction

The Brazilian government is declaring victory in its decades-long struggle to become self-sufficient in the supply of oil. The milestone is cause for celebration in a country that has long paid a high price for imported energy.

Brazil’s success came not from treating oil as an addiction but by producing even more of the stuff and by becoming even more dependent on world markets.

Guided partly by Brazil’s apparent success, American policy-makers are crafting new mandates for ethanol, and flex fuel vehicles are now taking shape. We have the impression that ethanol is king.

In reality, ethanol is a minor player in Brazilian energy supply. It accounts for less than one-tenth of all the country’s energy liquids. The real source of Brazil’s self-sufficiency is the country’s extraordinary success in producing more oil.

Brazil’s self-sufficiency offers three lessons for U.S. energy policy:

First is that ethanol, with current technology, will do little to sever our dependence on imported energy. Sugar plants in Brazil’s climate are a lot more efficient at converting sunlight to biomass than is corn in the Midwest, but U.S. policy nonetheless favors corn (and imposes tariffs on imported sugar) because the program is really a scheme to deliver heartland votes rather than a commercially viable fuel.

Yet, even with Brazil’s favorable climate and sugar’s inviting biology, ethanol is already reaching the limit. That’s because the land and other resources devoted to ethanol can be put to other uses such as growing food and cash crops.

Indeed, today the Brazilian government is actually reducing the share of ethanol that must be blended into gasoline because sugar growers prefer to make even more money by selling their product as sugar on the world market rather than fermenting it into alcohol.

Article continued at Brazil’s Ethanol Lesson Is How to Manage Our Oil Addiction.

Oil Inventories Down, Gasoline Up

The government released petroleum inventory figures this morning. U.S. crude oil stockpiles fell by 100,000 barrels, and gasoline inventories rose by 1.3 million barrels. Refinery utilization was at 89.8 percent of operable capacity, the highest level since Hurricane Katrina struck. Gasoline imports averaged 1.45 million barrels per day, which was the 3rd highest weekly average on record. This is an indication that supply and demand remain in very tight balance, and the summer driving season is still in front of us. However, in the short term, with gasoline inventories starting to build, I would expect some easing of gasoline prices.

Source: This Week In Petroleum

The complete report can be accessed here.

On Deck

Next up is a response to Joseph Miglietta on ethanol. Following that, I will publish a short essay on Fischer-Tropsch (FT), which is a reaction that will become very important as oil supplies become more and more expensive. It will be a non-technical article, but I will provide links to more detailed technical explanations. The article will focus on both the promise, and the peril of FT in meeting a portion of our future energy needs.