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The Energy Return of Tar Sands

When evaluating energy technologies – whether conventional fossil fuels or alternative energy – one thing that I pay close attention to is the Energy Return on Energy Invested (EROEI). While there are legitimate criticisms of the methodology, it can serve as a useful tool for comparing and contrasting various alternatives.

To give a flavor for why this is, consider an example. Let’s say society as a whole produces 50 million barrels of oil equivalents (could be oil, nuclear, wind, solar, biofuels, or a combination). Consider a couple of energy options. Option A has an EROEI of 10/1 (Energy Output/Energy Input). Option B has an EROEI of 2/1. Option A has to consume 5 million barrels to produce 50, for a net of 45. This net is what would be left for powering transportation, heating homes, and fueling industry. Option B, however, requires an input of 25 million barrels, so the net from the initial 50 is only 25 million.

The implications of this are that as EROEI falls, society must produce a lot more energy just to stand still. Even if total energy produced is constant, a falling EROEI means that there is less net energy left over after the energy input bills are paid. And because the easy energy is produced first, as time goes by this is in fact what happens: EROEI declines, and then it takes more time, effort, and money invested across society to keep things running. (Or, as EROEI declines energy efficiency must increase at such a rate that what is lost from the decline is made up from increased efficiency).

That’s a very basic introduction to EROEI. For a much more detailed look, see Understanding EROEI. In that essay I look at a number of examples, and explain how the EROEI of Brazilian sugarcane ethanol is probably much less than the 8/1 that is generally claimed, but that model still works well because a large portion of the energy inputs are waste biomass left over from sugarcane processing.

Over the past few years, I have seen a lot of speculation about the EROEI of tar sands (also known by the more marketable term, ‘oil sands’). I had seen estimates ranging from as low as 1.5/1 up to 4 or 5/1. My own suspicion has been that the number was higher than that, and I once did a back of the envelope based on some industry energy usage numbers that put the number at about 8/1 (for just the oil production step).

But now I have a much better number, thanks to a recent discussion at The Oil Drum. A reader linked to the following story:

Q&A with Marcel Coutu of Syncrude

This is the best reference I have ever seen for the EROEI of tar sands. Here are the important bits:

Oilsands Review: How much energy do you consume for every barrel of oil you produce?

Marcel Coutu: About 1.5 gigajoules (1.5 MCF of natural gas equivalent) per barrel. That’s higher than 0.8 MCF, the number I mentioned earlier; that refers to purchased energy. The total energy we consume in our operations includes energy we generate as a by-product to our upgrading processes. It is largely electrical energy, in which we are more than self-sufficient.

We produce a lot of waste gas from our processes, and use that to fire gas turbines. We also have a lot of waste heat from our operations, and we raise steam with that heat and put that steam into steam turbines. This makes our operations more efficient.

So, what we have is that some of the energy that is used is produced by the process. This is the accounting that results in an 8/1 energy return for sugarcane ethanol. By sugarcane accounting the EROEI of tar sands is about 5.8 million BTUs (the value of a barrel of oil)/0.8 million BTUs (the approximate energy content of 0.8 MCF that was externally purchased), or 7.25. By true EROEI accounting – which includes the internally consumed energy as an input – the EROEI would be 5.8/1.5 = 3.9.

Of course then the oil has to be refined. For a light, sweet oil such as the output of a syncrude unit, that step is going to be 12/1 or better. Putting the two steps together, I calculate that I need to spend 1.5 million BTUs to produce the oil, and another 5.8/12 = 0.5 million BTUs to refine it to gasoline and diesel. Total process is then 5.8 million BTUs/2 = 2.9/1 for the production and refining processes. Conventional light, sweet oil is around 6/1 for the entire process of oil in the ground to gasoline in the tank.

Let’s look at one more example to understand the implications. Let’s say we want 10 gallons of gasoline equivalent for our car. We need to solve two equations: Net Energy = Energy Output – Energy Input; and EROEI = Energy Output/Energy Input. If we combine equations and solve, we find that for light, sweet oil at a 6/1 EROEI, the total energy that must be produced is 12 gallons of gasoline equivalent. Two gallons of gasoline equivalent were consumed in the process of producing the 12 gallons, netting 10 gallons for the end user.

If we wanted to produce gasoline out of tar sands at a 2.9/1 total ratio, then 15.3 gallons of gasoline equivalent must be produced. 5.3 gallons would be consumed in the process, netting 10 to the driver. What I conclude from that is the tar sands is more than 2.5 times as energy intensive to refine to gasoline than is conventional oil.

While I don’t know what the ‘real’ EROEI is of sugarcane ethanol, it is probably in the vicinity of tar sands. However, as stated the big difference is that the bulk of those energy inputs are waste biomass, which dramatically boosts the sustainability of that option. Sugarcane ethanol – even if it has a lower energy return than tar sands – far exceeds tar sands in the sustainability category. This is one of the weaknesses of EROEI accounting; accounting for energy inputs from diverse sources – some more sustainable than others.

November 14, 2008 Posted by | energy balance, eroei, eroi, sugarcane ethanol, tar sands | 126 Comments

Understanding EROEI

Introduction

The concept of energy return on energy invested, or EROEI, is terribly misunderstood. I have heard people argue that EROEI doesn’t matter, only economics. This misses a very key point: EROEI is going to have a huge impact on economics, because it shows that in order to maintain current net energy for society, energy production must accelerate as EROEI declines.

Likewise, I have heard people hand wave away the issue, suggesting it is really no big deal. Here’s an example that I saw yesterday in a thread at The Oil Drum:

Consider an EROEI of 20 with 10 units required; this means that 1 unit is invested to get 20 unit of output or if 10 units are required then .5 unit is invested. Add them together an you get a total of 10.5 units.

Try it with an EROEI of 10; 10+1=11 units
Try it with an EROEI of 3; 10+10/3=13.33 units
Try it with an EROEI of 1.5; 10+20/3=16.66 total units of energy.

(At a EROEI of 1.11; 10+9=19. But I don’t know an energy process that runs that low)

So going from an EROEI of 20 to 1.5 raises the total amount of base energy extracted to maintain an output of 10 units would have to increase by only 59%–(16.66/10.5)-1.

The amount of low EROEI unconventional oil (for example) in the world is probably 2 times greater than conventional oil in the ground. There is still enough total energy to makeup for the drop in EROEI and still maintain the current levels of production given sufficent effort.

The object of energy production is to produce energy, not worry about EROEI.

That last sentence sums up the person’s argument: EROEI is no big deal. Being a math type, I worked through his calculations and found that they are wrong. It took me a while to see his error, but I finally did see it. Work the problem in reverse at an EROEI of 1.5. If you produced 16.66 units of energy at an EROEI of 1.5, then the inputs were 16.66/1.5, or 11.1. The actual net is 16.66 – 11.1, or 5.56. He was trying to net 10 units, so he has vastly underestimated the energy inputs required for this. So of course he doesn’t think EROEI is a problem. He doesn’t understand the concept.

EROEI Basics

There are a couple of important EROEI equations. The first is that EROEI = Energy Output/Energy Input. In other words, if we have to spend 10 BTUs (Input) to extract and refine 100 BTUs of oil (Output), then the EROEI is 100 to 10, or 10 to 1. The second important equation concerns the net energy; that is how much energy was left after the energy input is accounted for. This equation is Net Energy = Energy Output – Energy Input. In our previous example, the net energy is (100 BTUs produced – 10 BTUs input), or 90 BTUs.

A couple of points here. First, the break even for EROEI is 1.0. In that case, you have input just as much energy into the process as you got back out. In some cases, that may make economic sense. For instance, if you input coal BTUs but got back out ethanol or diesel BTUs, then you have converted the coal into something of greater value. However, if you input one transportation fuel and got another transportation fuel as output – as is mostly the case with corn ethanol (natural gas, diesel, and gasoline in; ethanol out) – then you are really just spinning your wheels. In a case like this, you should just use the inputs directly as a transportation fuel.

The same is true of Net Energy – it can be negative and yet still make economic sense. But an important point here is that society can’t run for long on an EROEI of less than 1.0 or on a negative Net Energy. Doing so is equivalent to withdrawing money from a bank – at some point you have to make some deposits – or at least stop the withdrawals.

The EROEI of Brazilian Ethanol

The case of Brazilian sugarcane ethanol deserves special mention. It is often quoted as having an EROEI of 8 to 1. I have even repeated that myself. But this is misleading. This measurement is really a cousin of EROEI. What is done to get the 8 to 1 sugarcane EROEI is that they only count the fossil fuel inputs as energy. Boilers are powered by burning bagasse, but this energy input is not counted. For a true EROEI calculation, all energy inputs should be counted. So what we may see is that the EROEI for sugarcane is 2 to 1 (hypothetically) but since most inputs are not fossil-fuel based the EROEI based only on fossil-fuel inputs is 8 to 1.

What is overlooked by touting the EROEI of 8 to 1 and skipping over the true EROEI is an evaluation of whether those other energy inputs could be better utilized. For instance, that bagasse that doesn’t get counted could be used to make electricity instead. Probably in the case of sugarcane, firing boilers is the best utilization. But the lesson from this digression is to be careful when people are touting very high EROEIs. They probably aren’t really talking about EROEI.

Calculations

Now for some calculations that show the challenge of energy production if the EROEI of our energy sources continues to decline. In the early days of oil production, the EROEI was over 100. Now, it has declined to somewhere between 10 and 20. So let’s look at the implications as the EROEI declines from 20. Here is what it takes to get 10 units of energy (gross, not net) at various EROEI values.

A 20 to 1 EROEI it takes an investment of 0.5 energy units to get 10 out

At 10 to 1 it takes 1 energy unit to get 10 out

At 5 to 1 it takes 2 energy units to get 10 out

At 2 to 1 it takes 5 energy units to get 10 out

At 1.5 to 1 it takes 6.67 energy units to get 10 out

At 1.3 to 1 it takes 7.69 energy units to get 10 out

At 1 to 1 it takes 10 energy units to get 10 out

So, dropping from an EROEI of 20 to 1 down to 1.3 to 1 takes over 15 times the energy inputs (7.69/0.5) to output the same amount of energy.

Net Energy

But here is what so many – included that poster I quoted above – fail to understand. Look at the net energy.

At 20 to 1, an investment of 0.5 units got 10 back out. The net is 9.5 units.

At 1.3 to 1, it took an investment of 7.69 units got 10 back out. The net is 2.31 units.

At 1 to 1, an investment of 10 units got 10 back out. The net is 0 units – all you have done is converted one energy form into another. (And of course at less than 1 to 1, you have actually lost usable energy during the process).

If we wish to net 10 units, then at 20 to 1 we have to produce a total of 10.53 units (you are solving 2 equations here; EROEI = Out/In and Net = Out – In; For EROEI = 20, the solution is Out = 10.53 and In = 0.53). For an economy that requires 10 units of energy to run, we need an excess of 0.53 units to net that 10. (And if you want to pick nits, 10.53 is rounded from 10.5263157894737).

Now drop the EROEI to 1.3. We now have to produce a total of 43.33 – an excess of 33.33 – to get the 10 we need to run the economy (Out = 43.33, In = 33.33; EROEI = 1.3 = 43.33/33.33; Net = 10 = 43.33 – 33.33). Thus, the requirement from dropping the EROEI from 20 to 1 down to 1.3 to 1 requires a production excess of (33.33/0.53), or over 60 times the high EROEI case.

Running Faster to Stay in Place

Therein EROEI illustrates clearly the challenge we face. As EROEI declines, energy production must accelerate just to maintain the same net energy for society. At an EROEI of less than 2, the amount of energy required to net our current energy usage far exceeds even the most optimistic proposals for our production capacity. Others have concluded much the same: The status quo can’t be maintained if EROEI continues to decline.

Many don’t grasp this concept. If they did, they would understand why a falling EROEI is reason for concern.

March 5, 2008 Posted by | energy balance, eroei, eroi | 441 Comments

Perpetual Confusion over Energy Balances

People continue to be confused about the energy balance of gasoline versus ethanol. The ethanol lobby, in my opinion, deliberately spreads this sort of misinformation to persuade people that producing ethanol is a wise usage of our BTUs. I have tried to clear up the confusion on a number of occasions, most recently when Vinod Khosla once again claimed “corn ethanol has almost twice the energy balance compared to gasoline“:

The Handy-Dandy Khosla Refuter

But the issue lives on, as strong as ever. A couple of days ago, Stuart Staniford wrote the following essay at The Oil Drum:

The Fallacy of Reversibility

In the essay, Stuart takes on one of the major tenets of many peak oilers: That peak oil will mean a return to localized agriculture. Stuart argued that it would not. I warned him that he would take his lumps for arguing against a popular position (and he did) just as I did when I have argued against the peak oil conventional wisdom that Saudi oil production has peaked.

But in that thread, the energy balance issue once again came up. And here was one response:

I hate to jump in because I went round and round with RR on this a while back, but also because I think the costs of ethanol are being externalized, particularly water costs, and I don’t like seeing food go to fuel. But I agree with you. The slight-of-hand that Nate is using is that he ignores the oil feedstock when refining oil, but you have to include it when making ethanol (system boundaries have to be drawn that way I have been told), so you get this 8:1 number for oil refining and 1.3:1 for ethanol, and all the “awl bidness” folk say QED.

BUT… for grins, lets suppose all the oil you had in the world was 1800 barrels. When that is gone you are out, kaput, no more. Then you can ask what will I do with this. Well you could pump and refine it into diesel using 200 barrels and ending up with 1600 barrels of diesel. 8:1 OK well and good.

Or you could take take that 1800 barrels less pumping cost (let’s say negligent for argument sake) and produce 2340 (1.3 x 1800) barrels of oil equivalent in ethanol.

Now for further grins, let’s assume that the usage is 540 barrels per year. Having pumped and refined diesel you will be out, kaput, done, in about 3 years, but when making ethanol, each year, when a new crop is planted you will still have 1800 barrels, and now you have a sustainable energy supply. Woohoo!

Now these “ethanol haters” will rightfully claim that we can’t replace our current FF useage with ethanol, ignoring the fact that they have been spouting nonsense about efficiency of oil versus ethanol. But with the right ethanol production from say celulosic sources, we could ease the burden on the oil consumption extending our nonrenewable resources, particularly so, if we also agressively conserve oil and recycle some of the water used in ethanol production. Here you will be told that the “devil is in the details”, because there is no viable celulosic process. But hold on now, GE just invested in just such a process, with the idea that they could build many plants and replace about 15% of the FF use in the future. The first plant goes on line this year if everything goes perfectly :). Anyway, you’ll go blue in the face arguing with some of these folk as they set system boundaries to ensure that oil refineries appear efficient compared to ethanol, wihtout a thought for extending the present supply of FF.

Naturally, I responded to it:

You were wrong the last time, and you are wrong now. You are not making an efficiency argument. The argument “what if there was no more oil…” is not an efficiency argument. You are correct, if there was no more oil, then it’s a different argument. But then if there was no more oil, the whole charade would come tumbling down anyway.

The oil feedstock is ancient, captured solar energy. You do not include that when doing the energy balance, any more so than you include the corn BTUS – recently captured solar energy – when doing the ethanol EROEI. (What you do include is the portion of the BTUs that were due to the fertilizer). This is what you, and so many others who are confused on this issue do not see.

What is counted in the ethanol EROEI is the energy it took to grow the corn, turn it into ethanol, and purify it. What is counted in the gasoline EROEI is the energy to extract the oil and to refine the oil. The portion of the feedstock BTUs that amount to captured solar energy are not counted in either case. Ethanol proponents wish to count them in the case of oil but not ethanol, which is why they say nonsensical things like “It is more energy efficient to produce ethanol than to produce gasoline.”

QED.

I think it’s that captured solar energy portion that they don’t seem to get. It’s really not that difficult of an argument, in my opinion. And the argument often shifts, as it did above, to “suppose we had no more oil….” But that is not an efficiency argument. It is a valid argument, just not an efficiency one. But as we debate that argument I think we need to understand, as a society, what it means to transition from an energy return of better than 5/1 in the case of petroleum to something that is around 1, plus some animal feed that gets counted as a fraction of a BTU.

January 23, 2008 Posted by | energy balance, ethanol, gasoline | 106 Comments

High Oil Prices = High Biofuel Prices

You know that forever I have beaten the drum that high fossil fuel prices would make biofuels more expensive due to their poor EROEI. If you are unfamiliar with the argument, it is essentially that most biofuels have very high fossil fuel inputs (and thus a low energy return). That simply means that when fossil fuels get more expensive, biofuels eventually have to follow. I always thought it was funny when people thought just the opposite would happen: As fossil fuels get more expensive, biofuels become more competitive. That could very well be true if you had a ubiquitous source for biofuels that had minimal fossil fuel inputs. But that isn’t what we have. And the Wall Street Journal finally noticed:

Biofuel Costs Hurt Effort To Curb Oil Price

Rising costs of biofuels and other alternative energies are making them less viable as substitutes for crude oil, a development that could frustrate efforts to bring oil prices down in the years ahead.

A few years ago, many energy economists predicted that higher oil prices would ensure the success of alternative energies such as biodiesel or wind power by making them more financially attractive. In many cases, though, the opposite has occurred: Even as crude-oil prices approach $100 a barrel, some alternatives look less attractive than in the past.

Many energy economists predicted that, did they? I guess that’s why I am not an energy economist. That this would happen is a no-brainer, again because of the energy inputs. How they could get it so wrong is beyond me.

One reason: Energy demand is now so intense that supplies of just about every kind of fuel are in short supply, driving up prices of the raw materials involved in making many alternative energies.

It is the same across the energy industry. That’s why projects keep coming in over budget. That’s why GTL projects have been abandoned, and CTL can’t get off the ground. And that’s why I think Shell’s oil shale efforts are doomed. (I know that ethanol prices lately have collapsed, but with high energy and corn prices, their margins are getting crushed and a shakeout is inevitable).

The problem is most acute for crop-based alternative fuels, like ethanol and biodiesel, though it has also proved true to some degree for solar power, nuclear power and other competing energy sources. Biodiesel, a fuel made from farm crops like soybean oil and palm oil, was in some cases supposed to be economically competitive with crude-oil prices as low as $50 a barrel, according to analysts who studied the industry.

What a surprise. Who could have predicted that?

November 5, 2007 Posted by | biofuels, energy balance, ethanol | 5 Comments

Bob Dinneen Responds to Rolling Stone

I know it’s been a bit heavy on ethanol lately, but I continue to get quite a bit of activity over the recent Rolling Stone article. That’s the whole reason for writing a FAQ. I have in the queue a half-finished essay on solar thermal, and would really like to delve into that topic a bit more. I don’t want to become “The Ethanol Blog”, but it seems like that recently.

Bob Dinneen, President of the Renewable Fuels Association (the same association that claims displacement of 170 million barrels of oil with the energy equivalent of 64 million barrels of ethanol) wrote to Rolling Stone and addressed Jeff Goodell’s recent story:

Letter To The Editor: Response to “The Ethanol Scam”

In the letter, Dinneen took a shot at me, writing “As is to be expected, Mr. Goodell relied on the figures of an energy blogger for his facts.” Goodell defended me:

For a thorough clarification, check out oil industry engineer Robert Rapier’s analysis. I know that Dinneen finds bloggers unsavory, but Rapier is among the most fair-minded and insightful critics of the energy industry I’ve come across.

And he pointed Dinneen here. So, Bob Dinneen, this one’s for you. Let’s deconstruct his letter. Jumping past the all too predictable ad hominems:

Wow, I am having to jump pretty far. Farther than I thought, as the letter is laced with ad hominems. Four paragraphs into the letter, Dinneen is waving the flag and talking about “Mr. Goodell’s Hugo Chavez.” Was this the best the RFA could come up with? Actually, I want to jump down and address the most egregious error, and the claim that I was most certain would be made by ethanol proponents:

Yet another common misconception offered by ethanol novices is that ethanol is at best energy neutral, meaning it takes as much energy to produce as it yields. As is to be expected, Mr. Goodell relied on the figures of an energy blogger for his facts. Inconveniently for his arguments, the federal government has different figures. According to the Argonne National Laboratories, ethanol yields nearly 70% more energy that it took to produce. Conversely, refined gasoline contains 20% LESS energy that it took to produce.

Can you count the errors and misleading statements? First, “ethanol yields nearly 70% more energy that it took to produce”. Then “gasoline contains 20% LESS energy that it took to produce.” Are you comparing like to like, Mr. Dinneen? Of course you aren’t. By your gasoline metric, ethanol also contains less energy than it took to produce. Why? Because you are counting the crude oil feed as an “input” to the gasoline process, but you are not counting the crude ethanol feed as an input to the ethanol process. You are not comparing like to like; you are comparing an efficiency to an energy return. So, here’s a question. If I give you some quantity of energy to invest in energy production, will you end up with more energy if you invest that into gasoline production, or into ethanol production? The answer is gasoline production, by a wide margin. And I have demonstrated that numerous times, using the pro-ethanol USDA’s own numbers. I repeat: I am using pro-ethanol sources for my analyses. So accuse me of bias if you wish, but that doesn’t change the numbers.

Which brings us to the claim of a yield of nearly 70% more energy than it took to produce. I wonder if Dinneen knows (or cares?) how the USDA paper arrived at this number. I am going to show you how they did, and cite the reports so you can check for yourself. I analyzed the reports in detail here, using their own numbers to show what they did. You can read the analysis for yourself, but here’s the executive summary.

In 2002, the USDA reported on the energy balance of corn ethanol, stating that the energy balance was 1.34 units of energy out for every unit in. As I showed, they did a little accounting trick to get that, as the real number – when full BTU credit was taken for the animal feed by-products – was 1.27. Minor quibble, but it made me alert for more accounting tricks. And we got them in a report released 2 years later.

In their 2004 report, the USDA acknowledged that they had grossly underestimated a number of energy inputs in the 2002 report. So, they corrected those numbers. But some energy inputs had gone down, and at the end of the day, the energy inputs/outputs in the 2004 report were about the same as in the 2002 report. Yet in the 2004 report, they reported that the energy ratio for ethanol was 1.67, which is where Mr. Dinneen got his number.

Now, what was it really? Look at Table 3 in the 2004 USDA report. I will just produce it for you so you can see for yourself:

Table 1. 2004 USDA Report Showing the Energy Return for Corn Ethanol at 1.06.

I know that’s kind of hard to read, but here’s what it says. (You can always check out the original if you think I am pulling any funny business). The energy produced in a wet mill process is only 2% greater than the energy it took to produce the ethanol. And I would point out that things like topsoil and aquifer depletion, energy to build the ethanol plant, etc. were not part of the analysis. (They said they didn’t have good information, so they just omitted any attempt to account for it). For a dry mill process, they reported that the energy return is 1.10, 10% energy produced, and the weighted average of the two is 1.06. Those are the raw, unmanipulated numbers. In other words, input 1 BTU of fossil fuels, output 1.06 BTUs of ethanol. And given the subsidy for ethanol, it should be clear that this is actually a subsidy for fossil fuels, which is responsible for nearly all of ethanol’s BTUs.

In Table 4, to the right, you can see the manipulated numbers, and the energy return of 1.67. So, how did they do that?

What they have done, is they have lowered the energy inputs into the ethanol process by a great deal. And the way they did that was to change their methodology. Instead of taking a credit for by-products, what they did was increase the energy alloted to the by-product. By doing this, they subtracted the energy inputs allocated to ethanol, and therefore manipulated the answer.

There is no reason that they couldn’t have boosted the energy return to any number they wanted, just by allocating more and more of the energy inputs to the by-products. I could boost the energy return to infinity by allocating all of the energy inputs to the by-product. It makes the by-product energy return look horrible, but it artificially boosts the ethanol energy return. And they aren’t reporting the by-product energy return, so you have to pay close attention to see exactly what they did.

Dried distillers grain (DDGS) has become a good dumping ground for the ethanol industry’s claims. When you point out that the energy balance is poor, they take a BTU credit for DDGS, just as if you could put in in your car and drive. But they have now figured out that they place more of the “blame” of energy of production into the DDGS and exaggerate the energy return for ethanol. But you can’t have it both ways. If the energy of production gets dumped into DDGS, it suddenly becomes a by-product with an incredibly high energy cost to produce.

Bottom line: Playing with the numbers doesn’t change the fact that ethanol production is marginally above energy neutral. Despite Mr. Dinneen’s claim that this is a “misconception offered by ethanol novices“, it is in fact true, based on the USDA’s own numbers. Mr. Dinneen and those who repeat the 1.67 number are either misinformed, or purposely misleading the public.

Mr. Dinneen concludes with:

It is entirely appropriate to have a debate about our energy policy in this country.

I agree. Here’s my proposal. Three rounds, 2,000 word limit per round, with the debate hosted here, at your site, and at The Oil Drum. I suggest the debate resolution: “Corn Ethanol is Responsible Energy Policy.” I will take the negative. If you have an alternate proposal, I would be glad to entertain it.

References

1. Shapouri, H., J.A. Duffield, and M. Wang. 2002. The Energy Balance of Corn Ethanol: An Update. AER-814. Washington, D.C.: USDA Office of the Chief Economist.

2. Shapouri, H., J.A. Duffield, and M. Wang. 2004. The 2001 Net Energy Balance of Corn Ethanol. Washington, D.C.: USDA Office of the Chief Economist.

August 9, 2007 Posted by | Bob Dinneen, energy balance, ethanol, ethanol subsidies, Jeff Goodell, Renewable Fuels Association, Rolling Stone | 85 Comments

Bob Dinneen Responds to Rolling Stone

I know it’s been a bit heavy on ethanol lately, but I continue to get quite a bit of activity over the recent Rolling Stone article. That’s the whole reason for writing a FAQ. I have in the queue a half-finished essay on solar thermal, and would really like to delve into that topic a bit more. I don’t want to become “The Ethanol Blog”, but it seems like that recently.

Bob Dinneen, President of the Renewable Fuels Association (the same association that claims displacement of 170 million barrels of oil with the energy equivalent of 64 million barrels of ethanol) wrote to Rolling Stone and addressed Jeff Goodell’s recent story:

Letter To The Editor: Response to “The Ethanol Scam”

In the letter, Dinneen took a shot at me, writing “As is to be expected, Mr. Goodell relied on the figures of an energy blogger for his facts.” Goodell defended me:

For a thorough clarification, check out oil industry engineer Robert Rapier’s analysis. I know that Dinneen finds bloggers unsavory, but Rapier is among the most fair-minded and insightful critics of the energy industry I’ve come across.

And he pointed Dinneen here. So, Bob Dinneen, this one’s for you. Let’s deconstruct his letter. Jumping past the all too predictable ad hominems:

Wow, I am having to jump pretty far. Farther than I thought, as the letter is laced with ad hominems. Four paragraphs into the letter, Dinneen is waving the flag and talking about “Mr. Goodell’s Hugo Chavez.” Was this the best the RFA could come up with? Actually, I want to jump down and address the most egregious error, and the claim that I was most certain would be made by ethanol proponents:

Yet another common misconception offered by ethanol novices is that ethanol is at best energy neutral, meaning it takes as much energy to produce as it yields. As is to be expected, Mr. Goodell relied on the figures of an energy blogger for his facts. Inconveniently for his arguments, the federal government has different figures. According to the Argonne National Laboratories, ethanol yields nearly 70% more energy that it took to produce. Conversely, refined gasoline contains 20% LESS energy that it took to produce.

Can you count the errors and misleading statements? First, “ethanol yields nearly 70% more energy that it took to produce”. Then “gasoline contains 20% LESS energy that it took to produce.” Are you comparing like to like, Mr. Dinneen? Of course you aren’t. By your gasoline metric, ethanol also contains less energy than it took to produce. Why? Because you are counting the crude oil feed as an “input” to the gasoline process, but you are not counting the crude ethanol feed as an input to the ethanol process. You are not comparing like to like; you are comparing an efficiency to an energy return. So, here’s a question. If I give you some quantity of energy to invest in energy production, will you end up with more energy if you invest that into gasoline production, or into ethanol production? The answer is gasoline production, by a wide margin. And I have demonstrated that numerous times, using the pro-ethanol USDA’s own numbers. I repeat: I am using pro-ethanol sources for my analyses. So accuse me of bias if you wish, but that doesn’t change the numbers.

Which brings us to the claim of a yield of nearly 70% more energy than it took to produce. I wonder if Dinneen knows (or cares?) how the USDA paper arrived at this number. I am going to show you how they did, and cite the reports so you can check for yourself. I analyzed the reports in detail here, using their own numbers to show what they did. You can read the analysis for yourself, but here’s the executive summary.

In 2002, the USDA reported on the energy balance of corn ethanol, stating that the energy balance was 1.34 units of energy out for every unit in. As I showed, they did a little accounting trick to get that, as the real number – when full BTU credit was taken for the animal feed by-products – was 1.27. Minor quibble, but it made me alert for more accounting tricks. And we got them in a report released 2 years later.

In their 2004 report, the USDA acknowledged that they had grossly underestimated a number of energy inputs in the 2002 report. So, they corrected those numbers. But some energy inputs had gone down, and at the end of the day, the energy inputs/outputs in the 2004 report were about the same as in the 2002 report. Yet in the 2004 report, they reported that the energy ratio for ethanol was 1.67, which is where Mr. Dinneen got his number.

Now, what was it really? Look at Table 3 in the 2004 USDA report. I will just produce it for you so you can see for yourself:

Table 1. 2004 USDA Report Showing the Energy Return for Corn Ethanol at 1.06.

I know that’s kind of hard to read, but here’s what it says. (You can always check out the original if you think I am pulling any funny business). The energy produced in a wet mill process is only 2% greater than the energy it took to produce the ethanol. And I would point out that things like topsoil and aquifer depletion, energy to build the ethanol plant, etc. were not part of the analysis. (They said they didn’t have good information, so they just omitted any attempt to account for it). For a dry mill process, they reported that the energy return is 1.10, 10% energy produced, and the weighted average of the two is 1.06. Those are the raw, unmanipulated numbers. In other words, input 1 BTU of fossil fuels, output 1.06 BTUs of ethanol. And given the subsidy for ethanol, it should be clear that this is actually a subsidy for fossil fuels, which is responsible for nearly all of ethanol’s BTUs.

In Table 4, to the right, you can see the manipulated numbers, and the energy return of 1.67. So, how did they do that?

What they have done, is they have lowered the energy inputs into the ethanol process by a great deal. And the way they did that was to change their methodology. Instead of taking a credit for by-products, what they did was increase the energy alloted to the by-product. By doing this, they subtracted the energy inputs allocated to ethanol, and therefore manipulated the answer.

There is no reason that they couldn’t have boosted the energy return to any number they wanted, just by allocating more and more of the energy inputs to the by-products. I could boost the energy return to infinity by allocating all of the energy inputs to the by-product. It makes the by-product energy return look horrible, but it artificially boosts the ethanol energy return. And they aren’t reporting the by-product energy return, so you have to pay close attention to see exactly what they did.

Dried distillers grain (DDGS) has become a good dumping ground for the ethanol industry’s claims. When you point out that the energy balance is poor, they take a BTU credit for DDGS, just as if you could put in in your car and drive. But they have now figured out that they place more of the “blame” of energy of production into the DDGS and exaggerate the energy return for ethanol. But you can’t have it both ways. If the energy of production gets dumped into DDGS, it suddenly becomes a by-product with an incredibly high energy cost to produce.

Bottom line: Playing with the numbers doesn’t change the fact that ethanol production is marginally above energy neutral. Despite Mr. Dinneen’s claim that this is a “misconception offered by ethanol novices“, it is in fact true, based on the USDA’s own numbers. Mr. Dinneen and those who repeat the 1.67 number are either misinformed, or purposely misleading the public.

Mr. Dinneen concludes with:

It is entirely appropriate to have a debate about our energy policy in this country.

I agree. Here’s my proposal. Three rounds, 2,000 word limit per round, with the debate hosted here, at your site, and at The Oil Drum. I suggest the debate resolution: “Corn Ethanol is Responsible Energy Policy.” I will take the negative. If you have an alternate proposal, I would be glad to entertain it.

References

1. Shapouri, H., J.A. Duffield, and M. Wang. 2002. The Energy Balance of Corn Ethanol: An Update. AER-814. Washington, D.C.: USDA Office of the Chief Economist.

2. Shapouri, H., J.A. Duffield, and M. Wang. 2004. The 2001 Net Energy Balance of Corn Ethanol. Washington, D.C.: USDA Office of the Chief Economist.

August 9, 2007 Posted by | Bob Dinneen, energy balance, ethanol, ethanol subsidies, Jeff Goodell, Renewable Fuels Association, Rolling Stone | Comments Off

Bob Dinneen Responds to Rolling Stone

I know it’s been a bit heavy on ethanol lately, but I continue to get quite a bit of activity over the recent Rolling Stone article. That’s the whole reason for writing a FAQ. I have in the queue a half-finished essay on solar thermal, and would really like to delve into that topic a bit more. I don’t want to become “The Ethanol Blog”, but it seems like that recently.

Bob Dinneen, President of the Renewable Fuels Association (the same association that claims displacement of 170 million barrels of oil with the energy equivalent of 64 million barrels of ethanol) wrote to Rolling Stone and addressed Jeff Goodell’s recent story:

Letter To The Editor: Response to “The Ethanol Scam”

In the letter, Dinneen took a shot at me, writing “As is to be expected, Mr. Goodell relied on the figures of an energy blogger for his facts.” Goodell defended me:

For a thorough clarification, check out oil industry engineer Robert Rapier’s analysis. I know that Dinneen finds bloggers unsavory, but Rapier is among the most fair-minded and insightful critics of the energy industry I’ve come across.

And he pointed Dinneen here. So, Bob Dinneen, this one’s for you. Let’s deconstruct his letter. Jumping past the all too predictable ad hominems:

Wow, I am having to jump pretty far. Farther than I thought, as the letter is laced with ad hominems. Four paragraphs into the letter, Dinneen is waving the flag and talking about “Mr. Goodell’s Hugo Chavez.” Was this the best the RFA could come up with? Actually, I want to jump down and address the most egregious error, and the claim that I was most certain would be made by ethanol proponents:

Yet another common misconception offered by ethanol novices is that ethanol is at best energy neutral, meaning it takes as much energy to produce as it yields. As is to be expected, Mr. Goodell relied on the figures of an energy blogger for his facts. Inconveniently for his arguments, the federal government has different figures. According to the Argonne National Laboratories, ethanol yields nearly 70% more energy that it took to produce. Conversely, refined gasoline contains 20% LESS energy that it took to produce.

Can you count the errors and misleading statements? First, “ethanol yields nearly 70% more energy that it took to produce”. Then “gasoline contains 20% LESS energy that it took to produce.” Are you comparing like to like, Mr. Dinneen? Of course you aren’t. By your gasoline metric, ethanol also contains less energy than it took to produce. Why? Because you are counting the crude oil feed as an “input” to the gasoline process, but you are not counting the crude ethanol feed as an input to the ethanol process. You are not comparing like to like; you are comparing an efficiency to an energy return. So, here’s a question. If I give you some quantity of energy to invest in energy production, will you end up with more energy if you invest that into gasoline production, or into ethanol production? The answer is gasoline production, by a wide margin. And I have demonstrated that numerous times, using the pro-ethanol USDA’s own numbers. I repeat: I am using pro-ethanol sources for my analyses. So accuse me of bias if you wish, but that doesn’t change the numbers.

Which brings us to the claim of a yield of nearly 70% more energy than it took to produce. I wonder if Dinneen knows (or cares?) how the USDA paper arrived at this number. I am going to show you how they did, and cite the reports so you can check for yourself. I analyzed the reports in detail here, using their own numbers to show what they did. You can read the analysis for yourself, but here’s the executive summary.

In 2002, the USDA reported on the energy balance of corn ethanol, stating that the energy balance was 1.34 units of energy out for every unit in. As I showed, they did a little accounting trick to get that, as the real number – when full BTU credit was taken for the animal feed by-products – was 1.27. Minor quibble, but it made me alert for more accounting tricks. And we got them in a report released 2 years later.

In their 2004 report, the USDA acknowledged that they had grossly underestimated a number of energy inputs in the 2002 report. So, they corrected those numbers. But some energy inputs had gone down, and at the end of the day, the energy inputs/outputs in the 2004 report were about the same as in the 2002 report. Yet in the 2004 report, they reported that the energy ratio for ethanol was 1.67, which is where Mr. Dinneen got his number.

Now, what was it really? Look at Table 3 in the 2004 USDA report. I will just produce it for you so you can see for yourself:

Table 1. 2004 USDA Report Showing the Energy Return for Corn Ethanol at 1.06.

I know that’s kind of hard to read, but here’s what it says. (You can always check out the original if you think I am pulling any funny business). The energy produced in a wet mill process is only 2% greater than the energy it took to produce the ethanol. And I would point out that things like topsoil and aquifer depletion, energy to build the ethanol plant, etc. were not part of the analysis. (They said they didn’t have good information, so they just omitted any attempt to account for it). For a dry mill process, they reported that the energy return is 1.10, 10% energy produced, and the weighted average of the two is 1.06. Those are the raw, unmanipulated numbers. In other words, input 1 BTU of fossil fuels, output 1.06 BTUs of ethanol. And given the subsidy for ethanol, it should be clear that this is actually a subsidy for fossil fuels, which is responsible for nearly all of ethanol’s BTUs.

In Table 4, to the right, you can see the manipulated numbers, and the energy return of 1.67. So, how did they do that?

What they have done, is they have lowered the energy inputs into the ethanol process by a great deal. And the way they did that was to change their methodology. Instead of taking a credit for by-products, what they did was increase the energy alloted to the by-product. By doing this, they subtracted the energy inputs allocated to ethanol, and therefore manipulated the answer.

There is no reason that they couldn’t have boosted the energy return to any number they wanted, just by allocating more and more of the energy inputs to the by-products. I could boost the energy return to infinity by allocating all of the energy inputs to the by-product. It makes the by-product energy return look horrible, but it artificially boosts the ethanol energy return. And they aren’t reporting the by-product energy return, so you have to pay close attention to see exactly what they did.

Dried distillers grain (DDGS) has become a good dumping ground for the ethanol industry’s claims. When you point out that the energy balance is poor, they take a BTU credit for DDGS, just as if you could put in in your car and drive. But they have now figured out that they place more of the “blame” of energy of production into the DDGS and exaggerate the energy return for ethanol. But you can’t have it both ways. If the energy of production gets dumped into DDGS, it suddenly becomes a by-product with an incredibly high energy cost to produce.

Bottom line: Playing with the numbers doesn’t change the fact that ethanol production is marginally above energy neutral. Despite Mr. Dinneen’s claim that this is a “misconception offered by ethanol novices“, it is in fact true, based on the USDA’s own numbers. Mr. Dinneen and those who repeat the 1.67 number are either misinformed, or purposely misleading the public.

Mr. Dinneen concludes with:

It is entirely appropriate to have a debate about our energy policy in this country.

I agree. Here’s my proposal. Three rounds, 2,000 word limit per round, with the debate hosted here, at your site, and at The Oil Drum. I suggest the debate resolution: “Corn Ethanol is Responsible Energy Policy.” I will take the negative. If you have an alternate proposal, I would be glad to entertain it.

References

1. Shapouri, H., J.A. Duffield, and M. Wang. 2002. The Energy Balance of Corn Ethanol: An Update. AER-814. Washington, D.C.: USDA Office of the Chief Economist.

2. Shapouri, H., J.A. Duffield, and M. Wang. 2004. The 2001 Net Energy Balance of Corn Ethanol. Washington, D.C.: USDA Office of the Chief Economist.

August 9, 2007 Posted by | Bob Dinneen, energy balance, ethanol, ethanol subsidies, Jeff Goodell, Renewable Fuels Association, Rolling Stone | 85 Comments

The Handy-Dandy Khosla Refuter

The web site Seeking Alpha has just published a new article on ethanol:

Ethanol: A Few Myths Debunked

To be honest, there are so many misconceptions and myths in the article that a better name for it would have been Ethanol: A Few Myths Repeated. I think all of these “myths” have been covered at one time or another in this blog, but he does quote Vinod Khosla at length. So, this might be a good time to re-debunk Khosla, given that he has repeated this claims many times since the first debunking.

So, once again, here are Vinod Khosla’s claims, repeated from the above article, dissected and debunked.

VK: Energy balance is not even the right question to answer. It is not the energy balance of ethanol that matters but the energy balance of ethanol relative to the energy balance of gasoline.

I agree 100%. But this is exactly the comparison that I and others have consistently made. The problem is that VK is comparing apples to bananas, as I will show.

VK: Dr. Wang at Argonne National Labs has built one of the most rigorous and transparent public models for energy balance calculations. His results indicate that corn ethanol has almost twice the energy balance compared to gasoline, yet this crucial fact is seldom mentioned in the press.

That’s because it is just flat-out wrong. If this was true, we wouldn’t even use gasoline, and ethanol wouldn’t need federal subsidies. After all, why on earth would we invest our BTUs into gasoline when we could get twice the energy return with ethanol? The reason is that VK is grossly misinformed, but he has no excuse because I have explained this to him over the phone. Twice.

VK: According to the majority of studies, corn ethanol has an energy balance between 1.3-1.8 while gasoline is substantially worse, at about 0.8 (since it takes energy to extract, transport, refine and handle gasoline).

Doesn’t it take energy to plant and harvest corn, ferment the ethanol, refine it, and transport it? Of course it does. Except with gasoline, the planting and fermenting have already been done by nature. The harvesting involves drilling a hole in the ground and extracting an energy rich, water-insoluble mixture that takes a fraction of the energy to refine that ethanol takes.

Here is the true story. If I have 1 BTU to invest, and I want a return on that BTU, where am I going to invest it to get the most value? Well, if I invest in ethanol – according to studies that the afore-mentioned Dr. Wang has co-authored – I am going to end up with about 1.06 BTUs of fuel and 0.25 BTUs worth of animal feed. So, for an investment of 1 BTU, I netted 0.06 BTUs of liquid fuel. Again that is backed up by the USDA’s own studies that Dr. Wang has co-authored.

If I invest that BTU into gasoline production, here is what I get. The worst conventional fields in the world have a 10/1 energy return on getting crude oil out of the ground. According to Cutler Cleveland (and consistent with my own personal experience), the world wide average energy return for crude oil extraction is 17/1. So, for my 1 BTU investment, I average 17 BTUs of crude in the crude tank. But I have to refine it. A heavy, sour refinery has an energy return of about 10/1 (producing gasoline, diesel, heating oil, jet fuel, etc. from the crude). So, my 17 BTUs of crude are going to take 1.7 BTUs – in the worst case – to refine. I have then invested 2.7 BTUs (1 to extract and 1.7 to refine) to process 17 BTUs of crude into liquid fuels.

Typically, there are losses of around 5% in refining crude. These losses often have BTU value that is recovered, but let’s say they don’t. Then, my gross is 17 * 0.95 = 16.15 BTUs of usable liquid fuels for my BTU investment of 2.7 BTUs. My energy return is 16.15/2.7, or 5.98. This compares to an energy return of 1.3 for ethanol (when we count animal feed as BTUs). So, gasoline has about 4.6 times the energy balance of ethanol, as opposed to VK’s claim of twice the energy balance for ethanol. He is off by an order of magnitude. Now it should start to become clear why ethanol will always need subsidies to compete.

Moving on:

VK: Electricity has an energy balance four times worse than corn ethanol. Do we stop using electricity?

No, because we can’t plug our toasters into a pile of coal. We can, however, run vehicles on the fossil fuel inputs that we used to make ethanol. That is the key difference. Electricity is a much more user-friendly form of energy than is coal. There is no advantage to recycling fossil fuels into ethanol (well, there’s coal, but I won’t go there).

VK: Dr. Wang goes on to say that energy balance is “not a meaningful number for any fuel in evaluating its benefits. “Why then does the press continue mentioning it?

It is ironic that in the same essay VK argues that the energy balance of ethanol is twice that of gasoline, he also argues that it is not a meaningful question. I have pointed out the absurdity of this position before, because this isn’t the first time he has taken it.

VK: Why do they fail to mention that electricity has a substantially worse energy balance than ethanol?

See above. Think about plugging your DVD player into a pile of coal and the picture will start to become clear.

VK: What is often inferred by the press is that it takes more petroleum to make ethanol than is displaced. This is emphatically NOT true, even in the most vintage of plants.

He is correct here, but fails to mention that the majority of the fossil fuel input into an ethanol plant, natural gas, works just fine as a vehicle fuel. Compressed natural gas (CNG) buses are very popular mass transit options, for instance.

VK: In fact if we have to pick an alternative to gasoline, then ethanol is the best choice today.

Ethanol, also known as recycled natural gas. My question is: Why go to the trouble of recycling the natural gas into ethanol, when CNG buses have a proven track record?

VK: Energy balance is the wrong question. Greenhouse gas emissions per mile driven is the right question.

Those questions go hand in hand. In fact, they are inversely proportional. The lower the energy balance, the higher the overall greenhouse gas emissions for the process. For an energy balance of 1.06, you have a 6% reduction in greenhouse gas emissions. Along with that, we get more pesticide and herbicide runoff into our waterways, increased soil erosion from expanded corn production, and we all get to pay more for our food.

We can do better. If we put half the effort into supporting conservation measures that we do into supporting corn ethanol, we could make a significant reduction in our fossil fuel usage. But, there isn’t any money to be made in that, so this option tends to be ignored. Sooner or later we won’t have a choice, but I would like to see us make the choice while we do still options.

March 8, 2007 Posted by | energy balance, ethanol, Michael Wang, Vinod Khosla | 12 Comments

The Handy-Dandy Khosla Refuter

The web site Seeking Alpha has just published a new article on ethanol:

Ethanol: A Few Myths Debunked

To be honest, there are so many misconceptions and myths in the article that a better name for it would have been Ethanol: A Few Myths Repeated. I think all of these “myths” have been covered at one time or another in this blog, but he does quote Vinod Khosla at length. So, this might be a good time to re-debunk Khosla, given that he has repeated this claims many times since the first debunking.

So, once again, here are Vinod Khosla’s claims, repeated from the above article, dissected and debunked.

VK: Energy balance is not even the right question to answer. It is not the energy balance of ethanol that matters but the energy balance of ethanol relative to the energy balance of gasoline.

I agree 100%. But this is exactly the comparison that I and others have consistently made. The problem is that VK is comparing apples to bananas, as I will show.

VK: Dr. Wang at Argonne National Labs has built one of the most rigorous and transparent public models for energy balance calculations. His results indicate that corn ethanol has almost twice the energy balance compared to gasoline, yet this crucial fact is seldom mentioned in the press.

That’s because it is just flat-out wrong. If this was true, we wouldn’t even use gasoline, and ethanol wouldn’t need federal subsidies. After all, why on earth would we invest our BTUs into gasoline when we could get twice the energy return with ethanol? The reason is that VK is grossly misinformed, but he has no excuse because I have explained this to him over the phone. Twice.

VK: According to the majority of studies, corn ethanol has an energy balance between 1.3-1.8 while gasoline is substantially worse, at about 0.8 (since it takes energy to extract, transport, refine and handle gasoline).

Doesn’t it take energy to plant and harvest corn, ferment the ethanol, refine it, and transport it? Of course it does. Except with gasoline, the planting and fermenting have already been done by nature. The harvesting involves drilling a hole in the ground and extracting an energy rich, water-insoluble mixture that takes a fraction of the energy to refine that ethanol takes.

Here is the true story. If I have 1 BTU to invest, and I want a return on that BTU, where am I going to invest it to get the most value? Well, if I invest in ethanol – according to studies that the afore-mentioned Dr. Wang has co-authored – I am going to end up with about 1.06 BTUs of fuel and 0.25 BTUs worth of animal feed. So, for an investment of 1 BTU, I netted 0.06 BTUs of liquid fuel. Again that is backed up by the USDA’s own studies that Dr. Wang has co-authored.

If I invest that BTU into gasoline production, here is what I get. The worst conventional fields in the world have a 10/1 energy return on getting crude oil out of the ground. According to Cutler Cleveland (and consistent with my own personal experience), the world wide average energy return for crude oil extraction is 17/1. So, for my 1 BTU investment, I average 17 BTUs of crude in the crude tank. But I have to refine it. A heavy, sour refinery has an energy return of about 10/1 (producing gasoline, diesel, heating oil, jet fuel, etc. from the crude). So, my 17 BTUs of crude are going to take 1.7 BTUs – in the worst case – to refine. I have then invested 2.7 BTUs (1 to extract and 1.7 to refine) to process 17 BTUs of crude into liquid fuels.

Typically, there are losses of around 5% in refining crude. These losses often have BTU value that is recovered, but let’s say they don’t. Then, my gross is 17 * 0.95 = 16.15 BTUs of usable liquid fuels for my BTU investment of 2.7 BTUs. My energy return is 16.15/2.7, or 5.98. This compares to an energy return of 1.3 for ethanol (when we count animal feed as BTUs). So, gasoline has about 4.6 times the energy balance of ethanol, as opposed to VK’s claim of twice the energy balance for ethanol. He is off by an order of magnitude. Now it should start to become clear why ethanol will always need subsidies to compete.

Moving on:

VK: Electricity has an energy balance four times worse than corn ethanol. Do we stop using electricity?

No, because we can’t plug our toasters into a pile of coal. We can, however, run vehicles on the fossil fuel inputs that we used to make ethanol. That is the key difference. Electricity is a much more user-friendly form of energy than is coal. There is no advantage to recycling fossil fuels into ethanol (well, there’s coal, but I won’t go there).

VK: Dr. Wang goes on to say that energy balance is “not a meaningful number for any fuel in evaluating its benefits. “Why then does the press continue mentioning it?

It is ironic that in the same essay VK argues that the energy balance of ethanol is twice that of gasoline, he also argues that it is not a meaningful question. I have pointed out the absurdity of this position before, because this isn’t the first time he has taken it.

VK: Why do they fail to mention that electricity has a substantially worse energy balance than ethanol?

See above. Think about plugging your DVD player into a pile of coal and the picture will start to become clear.

VK: What is often inferred by the press is that it takes more petroleum to make ethanol than is displaced. This is emphatically NOT true, even in the most vintage of plants.

He is correct here, but fails to mention that the majority of the fossil fuel input into an ethanol plant, natural gas, works just fine as a vehicle fuel. Compressed natural gas (CNG) buses are very popular mass transit options, for instance.

VK: In fact if we have to pick an alternative to gasoline, then ethanol is the best choice today.

Ethanol, also known as recycled natural gas. My question is: Why go to the trouble of recycling the natural gas into ethanol, when CNG buses have a proven track record?

VK: Energy balance is the wrong question. Greenhouse gas emissions per mile driven is the right question.

Those questions go hand in hand. In fact, they are inversely proportional. The lower the energy balance, the higher the overall greenhouse gas emissions for the process. For an energy balance of 1.06, you have a 6% reduction in greenhouse gas emissions. Along with that, we get more pesticide and herbicide runoff into our waterways, increased soil erosion from expanded corn production, and we all get to pay more for our food.

We can do better. If we put half the effort into supporting conservation measures that we do into supporting corn ethanol, we could make a significant reduction in our fossil fuel usage. But, there isn’t any money to be made in that, so this option tends to be ignored. Sooner or later we won’t have a choice, but I would like to see us make the choice while we do still options.

March 8, 2007 Posted by | energy balance, ethanol, Michael Wang, Vinod Khosla | 6 Comments

Postscript with Wang and Khosla

I think the thread on efficiency of ethanol versus gasoline left a lot of things hanging, and there have been some communications with Dr. Wang and Mr. Khosla since then. So, I wanted to more or less close the book on this and share those communications. I don’t want to spend another 300+ posts arguing about efficiency, but I do want to let the readers know how this all turned out.

Dr. Wang was clearly miffed about my usage of “sleight of hand.” While I do not consider usage of this phrase insulting, I felt like the right thing to do was to apologize since Dr. Wang took offense. So, I e-mailed back to Dr. Wang, Tom (who never again responded) and Mr. Khosla. Again, my comments are in blue, Dr. Wang’s are in green, and Mr. Khosla’s are in red:

Dear Tom, Dr. Wang, and Mr. Khosla:

First of all, let me apologize for the offense you took at my usage of “sleight of hand.” Never in my life have I considered that phrase insulting, but clearly you were insulted by it. I have used that term on many occasions, and had that term used against me. For me, it just means that things are not as they appear to be. So please do not presume that I was being intentionally insulting, because I was not.

Second, I have been stunned at the response from publishing our exchange. Between my R-Squared blog and The Oil Drum, the exchange received well over 400 responses to date, and I got around 200 e-mails. And while you may consider me combative and stubborn, I am also open-minded and very analytical. I engage in this discourse as much to learn as to convey information, and I was able to understand through those responses just why people are so confused about this issue of gasoline efficiency versus ethanol efficiency.

The reason I am engaged in this debate is that it is very important to me that we pursue the correct energy policy. While I have argued in favor of certain solutions, I have also spent a lot of time debunking certain claims. I don’t believe we do ourselves any favors, nor do we help ourselves make educated decisions by allowing myths to persist.

I agree with Mr. Khosla that maybe there are other questions that are better asked. We can debate many different angles over whether or not we should be advocating ethanol from corn. But this particular point of contention is about whether the claim “the efficiency of producing ethanol is better than the efficiency of producing gasoline” is accurate. I have lost count of how many times I have heard some variation of this claim. Tom, in your initial response to me, you included an attachment which made the claim:

“As you can see, the fossil energy input per unit of ethanol is lower–0.74 million Btu fossil energy consumed for each 1 million Btu of ethanol delivered, compared to 1.23 million Btu of fossil energy consumed for each million Btu of gasoline delivered.”

That is simply a false claim. Dr. Wang will probably acknowledge that this claim as written is incorrect, and yet it is derived from his work. That is why I say people are being misled as a result of his work. Perhaps it is unintentional, but when people make a claim such as the one above, they have misinterpreted what is being said, and used this misinterpretation to promote the ethanol agenda.

The real critical point when comparing the two processes is to make sure the boundaries are drawn in exactly the same place and definitions are consistent. When this is done it becomes clear why the above claim as written is incorrect. But please don’t misinterpret this into thinking that I am trying to completely rebut all ethanol arguments. I am addressing a single issue.

Again, please accept my sincere apologies for offending you. That was not my intent.

Sincerely,

Robert Rapier

Dr. Wang responded:

Dear Mr. Rapier,

Thank you for your email. Apparently, you know that I was pretty upset with your original way of characterizing my work and my character. Working in the scientific area, I am very careful in using language for characterizing others’ work and personalities. I expect that others would do the same to me. Simply put, just like you with great intention of pursuing facts, I have been doing the same myself in my professional career. To characterize me of knowingly misleading the public in biofuel debates is simply wrong. I am gratified that you realized that I treat such mischaracterization seriously.

Getting into the technical discussion that you originated, we all agree that energy efficiency is defined as energy output divided by all energy input (including energy in the feedstock itself). That is, we will take into account Btus in gasoline, ethanol, and all process fuels consumed for producing gasoline and diesel in our accounting for energy input. The amount of process fuels is about 0.25 for each Btu of gasoline produced from 1 Btu in crude oil. Meanwhile, for each Btu of ethanol produced from corn, which is from solar energy during corn growth, about 0.75 Btu of energy are consumed. This amount includes fossil energy (namely, petroleum, natural gas, and coal) in fertilizer production, corn farming, ethanol production, among many other activities. With this definition of energy efficiency (as it is accepted by all of us), ethanol has worse energy conversion efficiency (1/(1+0.75)=58%) than gasoline (1/(1+0.25)=80%). Note that in both calculations, the one Btu in ethanol and gasoline is taken into account as energy input, since they are energy eventually from solar energy in the ethanol case and petroleum energy in the gasoline case. Now you can see that such efficiency calculations take all Btus into account (renewable or non-renewable). That is, the efficiency calculations treat all Btus the same. In reality, all Btus are not created equal. I will get back to this point later.

What has been debated about bioethanol is ENERGY BALANCE, not energy efficiency. Energy balance is defined as the energy in the fuel minus FOSSIL energy input to produce the fuel. Why only fossil energy? That is because to many, fossil is non-renewable. As long as we use it, it will be gone, and it takes millions of years to get it back, if ever. But anyway, we can debate whether energy balance is a right matrix to use for energy policy evaluations. I, together with Mr. Khosla and many others, maintain that energy balance is NOT a good matrix for energy policy debates. But energy balance for ethanol has been debated for more than 20 years and it seems that there is still no way near an ending of this debate.

Now if one thinks a little more about energy balance calculations, one realizes that the calculation excludes renewable energy in energy input accounting, which a small step to the right direction to differentiate different types of Btus. But it adds all three fossil energy types (petroleum, natural gas, and coal) together. The calculation treats all fossil Btus equal, which is still not accurate for energy policy debates. For example, the US has several hundred years of coal supply, while it may have only 10-20 years of oil supply. I do not think that both of us would disagree that the US should value petroleum Btus more than coal Btus. But energy balance calculations do not provide us results to differentiate these two different types of Btus. Mr. Khosla alluded you about the flaws of energy balance calculations in his email.

With the energy balance definition, fossil energy input for one Btu of ethanol produced is still 0.75 Btu. However, fossil energy input for one Btu of gasoline is 0.25 Btu of fossil process fuels consumed PLUS the one Btu in crude oil that is converted into gasoline. Now you may see that the difference between a fossil energy-based fuel (gasoline) and a renewable fuel (ethanol) lies in the Btu embedded in the fuel itself. If it was not this difference between fossil fuels and renewable fuels, we all would conclude without any calculations that renewable fuels could not compete with fossil fuels with respect to energy (that is, all Btus are taken in account with differentiation).

I have made arguments against energy balance comparisons among energy products because they can be less meaningful or misleading. In the past ten years, I have tried to steer the debate on energy products to meaningful issues such as petroleum reductions, fossil energy reductions, greenhouse gas emission reductions, and reductions in criteria pollutant emissions. My point has been that even though corn ethanol has a positive fossil energy balance value, such debates are not that meaningful. I elaborate this step by step in some of my conference presentations. If you read my publications, you would see the consistency in what I think is more important to debate.

I hope this clarifies my positions. By the way, you indicated that you have read some of my publications, I encourage you to take a look at of the report that I coauthored in May 2005 in which I discussed problems of energy accounting and presented well-to-pump energy efficiencies for many transportation fuels including gasoline and corn ethanol. The report is posted at http://greet.anl.gov.

Regards,

Michael Wang

I note in his response that he acknowledges that the efficiency of producing gasoline is indeed higher than for producing ethanol. But he also says the debate is about how much fossil energy is contained in the input. I disagree with this, because the claim I have been rebutting is “it is more energy efficient to produce ethanol than gasoline.”

I responded:

Dear Dr. Wang,

Thank you for the cordial response. It seems that we agree on two key issues. First, the claim that ethanol proponents often make – “it is more efficient to produce ethanol than gasoline” – is wrong. Second, the debate is about more than just this one claim. Furthermore, you touched on the very reason this debate means so much to me: Peak Oil.

I believe that oil production will peak in a few short years, and it will have very serious ramifications for society. Without a doubt, we need to seriously research every possible alternative. This is primarily the reason that I spent my graduate studies at Texas A&M University working on cellulosic ethanol.

However, in my view the current national infatuation with ethanol hampers our preparations for a post-petroleum world. I have talked to many people who think that once the oil starts to run out, we will just switch over to ethanol. After all, they will say “E85 can lead us to energy independence.” Or they will repeat some other ethanol myth. That kind of thinking, in my opinion, lulls the public into complacency and provides a fig leaf for politicians so they don’t have to seriously address the key issue, which I believe is: We are going to have to learn to make do with a much lower per capita energy usage after oil production peaks.

On the one hand, I applaud Mr. Khosla’s willingness to invest in cellulosic ethanol, because I think cellulosic ethanol can indeed make an impact, and I think it has great potential. But on the other hand, I am very concerned about the consistent message I hear from the public that there is really nothing to worry about since cellulosic ethanol will save us once oil production peaks. If Mr. Khosla’s cellulosic ethanol ventures fail, it will be much more serious than a mere business failure. This has ramifications for the entire country. Failure will mean that we lost precious years in which we could have been making national preparations for Peak Oil. The fact that this threat is not being taking serious enough frightens me, and that is why I take this debate very seriously.

I hope that helps you better understand my position. And yes, incidentally I have read pretty much all of your publications, and I frequently run simulations with the GREET model.

Sincerely,

Robert Rapier

Dr. Wang responded, but in his response he just indicated that he had made a typo in his earlier response, and he thanked me for my e-mail. At this point, I thought the correspondence was finished, but Mr. Khosla weighed in with some final comments:

Robert, you should then stop talking about the irrelevant variable of “production efficiency” or even “energy balance” or “fossil energy balance” and change the debate to (a) petroleum reduction (since we have lots of coal fossil energy to produce corn ethanol and if you care about the environment also talk about (b) GHG reductions per mile driven. It is not what you say but how it is perceived/interpreted by the masses that is critical.

I am optimistic that at some point increasing CAFE will be mandated to reduce energy used in passenger transportation. I am highly supportive of that. I am not trying to convince anybody that we shouldn’t worry about reducing our energy use. Though I worry about peak oil, personally I think that the GHG problem is much more urgent. Market prices will address peak oil but if we have sufficient oil there is not market mechanism to reduce GHG emissions.

There are certainly some interesting points made in this correspondence, but I think it does vindicate my initial position. We can find metrics that favor ethanol, but energy efficiency of production is not one of them. What the proponents are saying is that for ethanol, we are going to count the captured solar energy from growing the corn. For oil, we are going to ignore the millions of years of captured solar energy. We are going to ignore that nature has already done the heavy lifting for us, that we are trying to replicate on an annual basis with ethanol. What you have is a metric, but it isn’t an efficiency metric.

September 2, 2006 Posted by | critics, energy balance, ethanol, Michael Wang, Vinod Khosla | 7 Comments

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