Many of my essays here are reprinted at The Energy Collective. Following a reprint of my recent essay examining DARPA’s extraordinary claim on the cost of algal fuel, a reader named Durwood Dugger (this gentleman, I presume) posted some very interesting comments that are worth reproducing here. His original comment can be found here.
I was at the AIAA (American Institute of Aeronautics and Astronautics) meeting in Orlando in February and participated in the biofuel for aviation workshop round-table discussion at the invitation of NASA. I have been producing algae (not for fuel) for commercial purposes for the last 38 years. None of the presentations or the discussions in round table discussion in which I participated leads me to believe that DARPA is going to reach their $2/gal. algae goals and especially not anytime soon.
So, is DARPA just trying to protect it’s current research contractors after several studies have shown algae is neither cost efficient, nor environmentally friendly as a net carbon reducing primary energy source at the near term prices of petroleum? If you look at 2008 DARPA there is nothing more in the PR release than a restatement of their original goals and projections. As someone who is very familiar with the research in this field, I can see no factual evidence given in this current PR or other published data that provides a credible basis that anyone is anywhere near obtaining those $1-2 gallons cost/price goals. No current researchers have produced and published audited and credible results anywhere close $2/gal costs. NREL and several private developers can’t get algae oil production costs below $18 gallon. (See NREL’s Road Map For Biofuel Development).
As you so well pointed out, most of the algae oil costs are energy costs in extraction, separation, drying and stabilization. It isn’t probable that DARPA is any closer because of improbable cost differences between current research and what McQuiston is claiming for DARPA.
I know several DARPA research contractors and they certainly aren’t anywhere close to $2/gallon in their cost estimations. Algae production and extraction technologies are not new – they have been around for 80 years or more. This makes the probability of sudden scientific breakthroughs that also seemingly violate the laws of thermodynamics – even more improbable.
What isn’t being broadly recognized is that for algae to contribute to our energy needs in any significant way, algae cultivation will require chemical fertilizers (again I’ve been doing this for a while.). This dependent relationship between biofuel production and petroleum based fertilizers are being ignored, denied and or dismissed by many government grantor’s who are either too ignorant or too self-servingly corrupt to address this obvious contradiction of logic in pursuing biofuels in a declining petroleum/fertilizer environment producing rapidly increase costs of the same.
The use of petroleum based fertilizer is of no small consequence. As petroleum prices rise – necessarily so do fertilizer prices and consequently so do the costs of the biofuels that are produced with them. More than 85% of the world’s food supply is produced with petroleum based fertilizers – 95% of world foods are petroleum dependent in transportation to market and consumers. Peak oil – no matter when it inevitably occurs – does not bode well for for biofuel economic feasibility, or for that matter – the global human food supply.
Photosynthesized biofuels incorporate two forms of energy – solar and chemical. The solar comes from an off planet sun and the chemical energy comes from an on planet and therefore finite petroleum supply. The net energy to be derived from photosynthesis is essentially from the solar energy coming from off Earth. Photosynthesis is less than 20% efficient (not to mention the processing energy algae oil requires) so it takes a lot of sunlit area to make much biofuel energy. Then combine the need for finite petroleum based fertilizers and biofuels literally have an uphill battle in cost efficiency over time – and one which they cannot win under the current technological criteria.
Clearly, if there were biofuels that could be produced for $2/gallon we would all be driving on this fuel. The petroleum companies would be selling off their drilling rigs. Instead we are not using biofuels and petroleum companies are expanding there drilling rig fleets as we discuss this and greatly – check it out on the web. Since oil platforms cost billions and have a 30 year life, you can tell where the petroleum producers are putting their money and it’s not in algae oil.
Everyone – about this time is saying, “Oh, but we can use waste to grow algae.” Using waste water as a nutrient source turns out to be problematic because most waste sources are not in areas with sufficient space to allow commercial scale algae production. Looking at all waste water sources that are feasibly located, you end up with a very, very small fraction of the amount space required to significantly impact energy requirements – probably less than 3%. Waste from humans and CAFO’s could be a significant source of nutrient for algae production, but only if we re-configure the nations waste treatment and CAFO infrastructure systems to use if effectively. This is something that isn’t going to happen in our current economic environment – where the nation’s tax revenues are being used almost exclusively to wage wars for… wait to guarantee middle eastern oil field access and to prop up it’s failed greed corrupted banking system and related stock market financial instrument sales systems.
It would seem more logical economically – in the face of declining petroleum reserves to invest in primarily in photovoltaic solar, wind, tide, and wave energy which is less reliant (only uses petroleum energy and products in initial fabrication) in the long term on petroleum than any biofuels. If we used our remaining petroleum reserves just for lubricants, fertilizer, special chemicals and even plastics, but not for transportation fuel – it would last us a much longer time. Perhaps enough time to bridge the technological gap between petroleum and the next most economically and environmentally efficient (really the same thing) source of energy.
Poorly phrased and misleading PR from DARPA’s hapless McQuiston only compounds our energy problems and even further reduces the publics confidence in our government and it’s faith in science and technology. Not exactly what is needed in the face of the problems that face us.
By now I have had at least a dozen people send me the link or ask me to comment on the recent DARPA announcement that they can produce algal oil for $2 a gallon. My fellow blogger Lou Grinzo has already made a few comments, and I share his skepticism. It is an extraordinary claim, to me ranking up there with “We have invented time travel.” Then again, if you invented the Internet, I suppose people tend to cut you a lot of slack.
But it is true that extraordinary claims require extraordinary evidence, and in this case I find the latter to be lacking. First, the claim:
US military to make jet fuel from algae
Scientists at the Defense Advanced Research Projects Agency (DARPA) have already successfully extracted oil from algal ponds, and is now about to begin large-scale refining of the oil.
My son and I successfully extracted oil from algae as part of his 8th grade science project. Extracting oil is not particularly technically challenging. But here is where it gets interesting:
Special assistant for energy with DARPA, Barbara McQuiston, said unrefined oil produced from algae currently costs $2 per gallon, but the cost is projected to reduce to around $1. The refined and processed jet fuel is expected to cost under $3 per gallon.
My friend John Benemann once said to me that whenever people make claims like this, offer to buy all of the oil they have to sell. What you quickly find out is that they have no oil to sell. So that would be my question to Barbara McQuiston. If you can produce it for $2 a gallon, would you sign a contract to deliver it to me in volume for $3 a gallon? I suspect I already know the answer to that. It’s like the guy whose sign advertises the cheapest gasoline in town, but when you stop in his tanks are empty.
Perhaps McQuiston was misquoted. But anyone who has ever done a major project knows that unless construction is well underway, the claimed time schedule is completely unrealistic:
The refining operation would produce 50 million gallons of oil derived from algae each year and is expected to begin full-scale operations in 2011. Each acre of algal farm pond can produce 1,000 gallons of oil. The projects are run by private companies General Atomics and SAIC.
Digging a little deeper, I found this, which puts things in a bit more perspective:
SAIC Awarded $25 Million Contract by Defense Advanced Research Projects Agency
Under this contract, SAIC will lead a team of industrial and academic organizations to develop an integrated process for producing JP-8 from algae at a cost target of $3/gal. SAIC and its team will develop technologies and processes to help achieve DARPA’s goal including integrating algae strain selection, water and nutrient sourcing, farming, harvesting, separation, triglyceride purification, algal oil processing, and economic modeling and analysis.
Hmm. That refers to ambitious goals rather than targets that have actually been achieved.
SAIC’s work on the contract will happen in two phases. Phase 1 will concentrate on technology selection and development, pilot plant site analyses, system integration, and economic modeling and analysis, culminating in a lab-scale production capability, preliminary production facility design, and the delivery of samples for testing. SAIC will also develop detailed commercialization and qualification plans showing a path to commercial and military systems viability. Phase 2 will focus on the final design, integration and operation of a pre-pilot scale production facility.
Those statements – from 3 weeks ago – don’t mesh at all with the claims from McQuiston. In Phase 2 they will build a “pre-pilot” facility? How on earth then could they have any idea of how much it is going to cost them to produce the oil?
No, I don’t believe they can produce algal oil for $2/gallon. I don’t believe anyone can, particularly if they are growing the algae in open ponds. I think back to my Interview with an Algae CEO, and his comment “Boy, you should see my electric bill.” The entire chain of algal oil production is energy and water intensive. So my suspicion is that McQuiston didn’t really mean that they can produce oil for that price. She may have stated that as a goal, and that got turned into a claim.
The other possibility is that because DARPA is a branch of the U.S. government, and government agencies need funding, maybe they are being a bit liberal with their claims in order to ensure funding.
I suspect that in a couple of years we will be doing the post-mortem on this one when we find that there is no $2 algal oil to be found anywhere.
I am hopping on a plane again today, this time bound for the Orlando Energy Conference. The topic I will present is An Overview of Global Energy Issues. Good thing they asked for something easy and non-controversial. 🙂
This is the last trip I have scheduled for this year, and I am hoping not to have to travel again for a while. Following Orlando, I will spend a few days at the family farm in Oklahoma, where Internet access has yet to make an appearance. Therefore, I will be slow to return e-mails and respond to comments. If all goes according to plan I will be back in Hawaii on November 21st (after having missed my wife’s birthday for the 4th consecutive year).
I quite enjoyed the presentations at the Pacific Rim Summit. I got to talk to a lot of people about what they were doing, and I got to hear the latest from the algae and cellulosic ethanol camps. With the exception of the guys doing algae fermentations, the mood wasn’t great as the challenges of turning cellulose into ethanol and algae into fuel start to manifest themselves. Like I have said before, we have been trying to commercially make ethanol from cellulose for 100 years. There were multiple panels going on simultaneously, though, and I didn’t get to see all of them. Maybe the news in some of the other panels was better.
Then there is Joule Biotechnologies. They gave one of the talks at lunch one day. To say people are skeptical is an understatement. I don’t really know what to make of them. I can’t find enough information yet to give them a really thorough critique, but I am not a big fan of issuing press releases following lab tests. Note that they haven’t yet advanced to pilot scale (that comment came out during the talk – that they were moving toward piloting), and they are already making pretty bold claims about yield, cost, and solving the energy crisis. Personally, I think I would wait to see how these things scale. As one cellulosic ethanol executive commented this past week, “These things don’t scale like you think they should.” That’s right, they don’t. That’s why most technologies don’t make it out of the lab. Always better to make conservative claims and then deliver beyond expectations than to make wild claims and fall short.
Anyway, here are the slides I presented at the Pacific Rim Summit. There is some overlap with what I presented at the First Nations’ Futures Program at Stanford University on September 27th, but there are a number of new slides there.
At some point I will probably write some posts around the theme of these slides, throwing in my notes pages to put the slides in context. To put these slides in some sort of context, here were three of the slides and the notes I had jotted down for them. From the Outline slide:
We have talked a lot about sustainability this week. I must have heard that word a few dozen times the past couple of days. So who in here lives sustainably? We don’t, and our parents didn’t. Some of our grandparents may have, but for the most part they didn’t either. As a society, it has been a very long time since we lived sustainably.
So, why is it important then? I once had a friend say “There really is no need to worry too much about sustainability. Mother Nature will ultimately resolve the problem.” The problem with that statement is that I might not like how Mother Nature solves the problem. Hence, it is important to move toward sustainability voluntarily.
From the Coming to Grips slide:
I am presently reading Big Coal by Jeff Goodell. Jeff opens with a comment that I think captures the nature of the problem we face. When we go to the gas station or turn on a light switch, we don’t have to face the consequences of our dependence – the externalities. The consequences are there nonetheless, as Pat Gruber of Gevo noted yesterday when he said “There’s mercury in our fish, and I don’t like that.”
Our actions have consequences. Who said that? My oldest son can tell you. He hears that all the time, because he doesn’t always connect the fact that when he takes certain actions, sometimes there are bad consequences. The difference between him and the person filling up with gas is he does get to face them immediately.
I also don’t know who said that last one – Deal with reality or reality will deal with you – but again it’s like something I tell my kids. The future is coming whether you plan for it or not. If you plan for it, you tilt the odds in your favor.
From the slide My Paradigm:
We all view the world through a set of lenses. These are my lenses, and they shape my opinions. I know where we are, but I want to know where we are going to be in 3 , 5, 20 years from now. I believe that we will end up paying a lot more for oil than we do now. I often point out to people that consumers in Europe pay the equivalent of $250/bbl for oil. Thus, I believe the technologies will need to compete against a higher future oil price.
We are burning fossil fuels at an unsustainable rate, and we have gotten away with it for a century. We won’t get away with it for another century.
As competition for biomass heats up, low-cost biomass is going to vanish. If your business model is based on tipping fees, then I don’t believe that’s a sustainable model. Jim Imbler from Zeachem commented yesterday that Macdonald’s in San Francisco used to pay to have their waste grease hauled off. A lot of people starting making their own biodiesel, and now not only does MacDonald’s charge for the grease, but the mob is stealing it. That’s my long-term view of biomass, and that theme has been repeated all week. You better lock in your feedstock. You don’t have the same luxury as an oil company to switch to a supplier halfway around the world. The energy density of biomass makes that proposition problematic.
Finally, those “renewable” solutions that are heavily dependent upon fossil fuels won’t compete. More on that later.
Anyway, off to the airport now. Probably no new posts from me for a week.
My presentation is tomorrow, but I have sat through some very interesting presentations over the past couple of days here at the Pacific Rim Summit on Industrial Biotechnology and Bioenergy. They have five panels going at once, but I have been sitting in on the cellulosic ethanol, algal fuel, and biomass logistics sessions for the most part. They will have links up to the presentations at some point, but I have been taking a lot of notes (12 pages of notes so far!)
On algae, these were some of the more pessimistic comments from various presenters, some of whom are executives at algae companies:
“Algae carries a great deal of technical risk.”
Asked about expected cost of algal oil: “I don’t know, because we don’t have any plants.”
“Photobioreactors (PBRs) are not a smart way to make algal fuel.”
“To scrub the emissions from a coal-fired power plant would require 35,000 acres of PBRs at a cost of $5 million per acre. But we might be able to get that down to $1 million per acre.”
“I calculate that it will take 36,000 acres of PBRs to scrub a power plant. The bottom line for those who would propose to use algae in this way? Abandon all hope.” – comment from the next presenter
“ExxonMobil is investing in algae but they said it would take 10 years to figure out if it was going to work.”
“Based on the absolute maximum solar capture at the equator, the theoretical maximum production of algal oil at the equator is 17,486 gallons per acre per year. The reality in Honolulu is about 833 gallons per acre per year. The energy balance – even with very optimistic assumptions and not including all of the unit operations – is well below 1.7 units out per unit in.”
“25 gallons of water is consumed per gallon of algal oil produced.”
“Algal oils are not economically viable.”
Now in fairness, these were comments of various presenters and some of the audience members took exception to some of the comments. One person commented that the water usage from corn ethanol when the corn has to be irrigated is much higher. Someone else pointed out that these comments did not apply to the fermentation approaches.
Incidentally, as a science project my oldest son is growing Spirulina at home under different conditions. We are also attempting to extract oil from some Haematococcus samples that we have. As a science project, I think this is fine (although it is more difficult than you might imagine). But nobody here seems to be too optimistic about algal fuels in either open ponds or PBRs anytime soon. I think the jury is still out on the fermentation approaches such as what Solazyme is working on.
So I am finally back home for the next 10 days, and slowly catching up. I had a good trip to Panama and then to Stanford. I had my luggage sniffed by dogs when I connected in El Salvador, and then when connecting in LAX Gwen Stefani and her husband walked by within 3 feet of me. I told my wife that I probably could have touched her, but then I might have been delayed by a trip to the L.A. County Jail. I also read Oil on the Brain on the long plane trips, and will soon post a review of that. I will also put up the slides I delivered at Stanford.
One of the things I did on the trip was take a tour of an algae farm. I spent some time with the CEO, and got to ask numerous questions. He had some very interesting comments, which I will capture below. Because he has to work in this industry, I am not going to identify him or his company. Below I will indicate his comments as CEO and mine as RR.
RR: Talk about some of the challenges of growing algae.
CEO: The list is exhaustive. It takes a lot of water. It takes a lot of electricity. Solar penetration is only about an inch into the water, so we really have to keep the ponds mixed well. One thing people never mention is the phosphorous requirement. Phosphorous is a limited resource, but a critical one for the algal growth. If you are trying to make oil, then you have to stress the algae and push it into a lipid production mode. But that causes growth rates to stall. If you engineer algae for higher oil production rates, they can’t out-compete the native species in the ponds.
RR: I talk to John Benemann on a fairly regular basis, and he has said much the same. He likes algae for the potential, for the water treatment possibilities, and as something that should continue to get funding for lab research. But he is pretty harsh on the uber-optimists.
CEO: Yes, I know John as well. He has done some good work in the field. Have you seen his latest paper?
RR: (He shows me the paper, and I acknowledge that I do in fact have that one).
RR: I was looking at those open ponds and wondering if the evaporation rates wouldn’t be problematic. That could create seriously high water usage, especially for those schemes that propose to use open ponds where the solar insolation is high (like in the Arizona desert).
CEO: Yes, those open ponds require a lot of fresh water. You should see our water bill.
RR: What about photobioreactors? Some people envision them as a solution to some of the problems (evaporation, contamination) of the open pond system.
CEO: They are ungodly expensive relative to how much algae they can produce.
RR: So how do you foresee the future of algal fuels?
CEO: There is no future. Look, some of these guys are out there committing fraud with their yield claims. Nobody is making fuel except for small amounts in the lab. I just don’t see how anyone will ever make cost-competitive fuel from algae.
RR: How about fermentation approaches like Solazyme? I haven’t written that off yet.
CEO: Yes, but they are using sugar, and sugar is food. They say they won’t always use sugar, but who knows?
RR: I could see their model working in Brazil as sugarcane ethanol does. Instead of fermenting to ethanol, they could ferment to oil. I also recently had someone write to me and claim they were using a feedstock other than sugar.
CEO: Maybe cellulose?
RR: If it is cellulose, I am on the next plane to go see them. That would indeed be a tremendous breakthrough, presuming their conversions are reasonable. I presume you get a lot of phone calls from aspiring algae fuel producers wanting to do a deal?
CEO: Oh yeah. All the time. Someone with a business plan and no appreciation for the scientific challenges wants to form a company and go after investors. It used to happen every other day, but has tailed off some now.
RR: So you see the main barrier to commercialization of algal fuel as cost?
CEO: Yes, but it is important to note why the cost is high. I don’t see much hope of dramatically cutting those costs. For algae that has other uses – like in the nutraceutical market – the economics are sometimes there because the product is much more valuable. I can make 4-5 times as much revenue per acre growing algae for the supplements market, and at a lower cost than it would take to make fuel.
RR: How about if you extracted oil as a byproduct of the nutraceutical market? I could see that working if you had a much higher value product carrying the costs. On the other hand, you probably aren’t going to get a whole lot of oil.
CEO: Exactly. You could produce oil in that scenario, just not in bulk.
RR: OK, many thanks for your time.
CEO: My pleasure.
This is the final installment of a three-part series that examines some of the renewable energy options that are presenting themselves as possible contenders to step up as petroleum steps down the depletion curve. The previous installments were:
Today I want to talk about Biofuel Niches. Here is how I would define a Biofuel Niche: A technology that is capable of supplying, long-term, up to 10% of our present liquid fossil fuel consumption, often by utilizing specific, localized synergies.
This definition covers a great number of possibilities, and I don’t pretend that I will even cover a large fraction of them. But I want to cover some specific fuels – like cellulosic ethanol – that I believe can work in a niche. If readers can think of others, let’s discuss them. I want to lead off with some of the options I categorized as “Pretenders”, and then discuss corn ethanol which I did not discuss in the previous installments.
To reiterate, my views are based on the following expectations: 1). That the average oil price over the next 10 years will exceed $100/bbl; 2). That biomass prices will rise in response to demand, putting a premium on efficient conversion technologies; 3). That these biofuel technologies will eventually have to compete on the basis of oil price and not government handouts. This latter point is key, because it favors those technologies that can decouple from fossil fuel inputs.
I classified this as a pretender based on the fact that technological improvements are needed in order to make algal biofuel economical – yet the hype over algae is mind-boggling. We don’t even know if it will work at scale, and yet it is going to be the solution to all our problems? Following my previous essay, I had a discussion with someone involved in testing fuels for the U.S. military. They are optimistic about the future of fuel from algae, but admitted that they were only able to secure algal fuel for testing at the cost of $100/gal! How likely is it that there will be a more than 20-fold decrease in production costs?
Having said that, there are three situations in which I think algae can work. Two of these are niches. The first is a situation in which the oil is produced as a by-product. Algae has a great number of uses in consumer products, and oil can be produced as a by-product of those consumer products. As a hypothetical, assume that algae can be engineered to produce a valuable pharmaceutical. This is certainly not science fiction; the first commercial usage of genetic engineering was to design bacteria to produce human insulin. Imagine instead algae, and oil that is removed during processing. The costs are largely born by the more valuable primary product. The problem of course is that this approach isn’t scalable. Imagine again that something like insulin production is the primary role of the algae. If you tried to scale that up to a significant fraction of our fuel usage, you will have thoroughly saturated the market for the insulin. But perhaps if we can pair up a number of primary products with algal oil production, algae can make a contribution to our fuel supply.
The second situation is similar. If algae production is one step in an integrated energy complex, it could work. For instance, I was recently asked to comment on just such an approach by Desert Biofuels, a company in Arizona. Without endorsing their specific approach, this sort of approach may work. (Actually their approach is quite complex and has unique technical risks). But algae can be effective at cleaning up waste water. Imagine algal-cleanup as one step of an integrated complex, and the costs go down substantially.
The only scalable approach I can see is for algae to be engineered to excrete their oil in situ. What drives the cost of algae up so much are the difficulties of collecting the algae, separating from water, and then separating the oil from the algae. (Often overlooked is that the oil must be further processed to biodiesel or green diesel). Now imagine a pond of algae in which the oil “leaks” out while the algae grow. The process of collecting the oil would be dramatically simplified. A caveat of course is that engineered algae tend to get out-competed by native strains. The bigger caveat is that this technology doesn’t exist, but companies are working on it.
The wild card out there is the Solazyme approach. Think sugarcane ethanol, except instead of yeast producing ethanol you have algae producing oil. The approach is interesting – which is why I mention it – and gets away from many of the problems inherent in trying to produce fuel from algae. Is it more efficient than sugarcane ethanol? I think it’s too early to tell. But one poster at The Oil Drum indicated that during a Q&A with a Solazyme representative, he couldn’t come close to a believable answer regarding scale-up costs. So while I think this one bears watching, it is far too early to suggest that this will pan out.
For a balanced overview of fuel from algae, see Biotech’s green gold?
I see two major problems with the scalability of cellulosic ethanol. First, the logistical challenges of getting a lot of biomass into the plant is going to limit the size of the plant. As I pointed out in an essay on Coskata, to run their proposed plants would take the equivalent of over a million trees per year. In terms of rail cars, this is over 1 per hour, 24 hours a day, 365 days a year in and out of the plant to dump the biomass. And bear in mind that this is really a gasification to ethanol plant, with higher forecast yields than a conventional cellullosic process (i.e., a real cellulosic plant of this size would require even more biomass).
But beyond that, the ethanol that is produced from the cellulosic process is at a far lower concentration than that of corn ethanol. That means big energy inputs in order to make pure ethanol.
A good niche application for cellulosic ethanol could be a situation in which there is a lot of waste heat available near a point source of biomass. Generally, there isn’t a lot of high quality waste heat that would contribute a lot to the steam needs of a cellulosic ethanol plant. But picture something like a cogeneration unit near a collection point for woody waste. The waste is being collected and is coming in anyway for disposal, and the heat output from the cogen unit may improve the economics.
Another alternative could be if there is another very cheap source of steam around that can’t be better utilized. If you had a lot of coal in the same location as a lot of biomass, again a cellulosic process might work (but I would argue that depending on the source of biomass, gasification might be a more efficient solution here).
While not generally considered a biofuel, I discussed hydrogen in my “Pretenders” piece so I will address it here as well. In my opinion, the most interesting realistic option for hydrogen is as energy storage for excess power. For instance, let’s say you have a neighborhood in which most houses have enough solar panels to produce excess electricity at mid-day. Once the batteries are charged, what else can you do with that excess electricity? If it can’t be diverted to someplace that has a need, then it may make sense to electrolyze water to produce hydrogen. This is not a very efficient process, and not something you would do under normal circumstances, but in this case it could be the best storage option.
Once the hydrogen is produced, it could either be used to fuel stationary fuel cells for the neighborhood when the solar panels aren’t producing, or it could be compressed and used to fuel hydrogen combustion engines.
A niche, you say? Aren’t we producing 10 billion gallons of corn ethanol already? True, but I am talking about something that could actually stand on its own in the long run – unsubsidized – and still make a decent net contribution to our energy supplies. In that case, producers might still be able to sell 10-15 billion gallons of ethanol a year and make a profit, but the distribution pattern would be different. In a state with ample rainfall and rich soil, corn ethanol may be able to stand unsubsidized by making and consuming the ethanol locally. Corn ethanol may be a fine solution for Iowa (although E85 is not even cornering the market in Iowa, where it should be in its optimal market). Stretching it beyond a local solution is where the economics start to break down and the scheme only works with subsidies.
Here are some examples of what I am talking about. When corn ethanol is produced far from corn supplies – like in California – the economics became difficult due to the cost of shipping the corn to the plant. I talked about that in 2006, when I warned of the potential problems of Pacific Ethanol’s plans to do just that. They filed for bankruptcy earlier this year.
Another example is when ethanol is produced from a state in which ethanol’s energy balance is poor (e.g., parts of Nebraska, due to corn’s irrigation requirements) and then shipped to California. If you look at the USDA’s most recent paper on corn ethanol’s energy balance (the one in which they used creative accounting), you can see from Table 2 that Nebraska’s energy inputs for growing corn are about 20,000 BTU/bushel above the Midwest average. (By comparison, Iowa’s are 11,000 BTU/bushel under the Midwest average). This has the overall impact of actually causing Nebraska’s net energy from producing ethanol to be negative unless one adds a BTU credit for co-products. With such a marginal energy balance (and I haven’t even mentioned the Ogallala Aquifer) it hardly makes sense to produce ethanol in the drier regions of Nebraska. It makes even less sense to then spend more energy shipping that ethanol far from the point of origin.
Those are some of the major niche applications I see, but there are certainly others. What corn ethanol could be for Iowa, sugar beet ethanol may be to the EU and palm oil may be to Malaysia. The key to success for any of these is not to try to scale something that should operate in a niche. When we attempt to do this, we open up a can of perpetual subsidies in order to force something that doesn’t fit, and often get unintended consequences in the process.
This article was initially titled “Pretenders, Contenders, and Niches.” However, the section on pretenders grew to the point that I have decided to split the essay up into three parts. The first part, Biofuel Pretenders, will cover many of the current media and political darlings. The second part, Biofuel Contenders, will discuss some options that have received less attention, but in the long term are more likely to have staying power. The final part, Biofuel Niches, will discuss situations in which some of the pretenders might actually work.
Reality Begins to Sink In
There was an interesting article in the Wall Street Journal this past week:
A few pertinent excerpts:
The biofuels revolution that promised to reduce America’s dependence on foreign oil is fizzling out.
Two-thirds of U.S. biodiesel production capacity now sits unused, reports the National Biodiesel Board.
Producers of next-generation biofuels — those using nonfood renewable materials such as grasses, cornstalks and sugarcane stalks — are finding it tough to attract investment and ramp up production to an industrial scale.
This all boils down to something I have said on many occasions: You can’t mandate technology. Just because you mandate that 36 billion gallons of biofuel are to be produced by 2022 doesn’t mean that it has a remote chance of happening. This is not a hard concept to understand, but it seems to have eluded our government for many years. The government would probably understand that they couldn’t create colonies on the moon in 10 years via mandate. They know they can’t cure cancer via mandate. But in the area of biofuels, they seem to feel like they can just conjure up vast amounts of hydrogen, cellulosic ethanol, or algal biodiesel.
Domestically produced biofuels were supposed to be an answer to reducing America’s reliance on foreign oil. In 2007, Congress set targets for the U.S. to blend 36 billion gallons of biofuels a year into the U.S. fuel supply in 2022, from 11.1 billion gallons in 2009.
Cellulosic ethanol, derived from the inedible portions of plants, and other advanced fuels were expected to surpass corn ethanol to fill close to half of all biofuel mandates in that time.
But the industry is already falling behind the targets. The mandate to blend next-generation fuels, which kicks in next year, is unlikely to be met because of a lack of enough viable production.
Most people don’t realize that the Germans were the first to produce ethanol from cellulose. That happened in 1898. For our political leaders and many industry boosters, cellulosic ethanol is a recent discovery, and thus they expect big leaps in the technology in the next few years. These expectations completely ignore the fact that researchers have been hard at work on making cellulosic ethanol a reality for decades – with little success.
In President Bush’s 2006 State of the Union address, he broadly expanded the mandate for ethanol. He voiced his strong support for cellulosic ethanol, and included billions of gallons in the Renewable Fuel Standard – as well as billions of dollars of financial support.
How quickly our politicians seem to have forgotten the 2003 State of the Union, in which Bush set forth his vision of the hydrogen economy:
“A simple chemical reaction between hydrogen and oxygen generates energy, which can be used to power a car producing only water, not exhaust fumes. With a new national commitment, our scientists and engineers will overcome obstacles to taking these cars from laboratory to showroom so that the first car driven by a child born today could be powered by hydrogen and pollution-free.”
We spent some two billion dollars toward that goal. Once again, this ignored many technical and economic realities, and so in May 2009 the headlines read:
Hydrogen Car Goes Down Like the Hindenburg: DoE Kills the Program
The dream of hydrogen fuel cell cars has just been put back in the garage. U.S. Energy Secretary Steven Chu announced yesterday that his department is cutting all funding for hydrogen car research, saying that it won’t be a feasible technology anytime soon. “We asked ourselves, ‘Is it likely in the next 10 or 15, 20 years that we will covert to a hydrogen car economy?’ The answer, we felt, was ‘no,’” Chu said.
My prediction is that in the not too distant future we will start to see headlines like this for cellulosic ethanol. The troublesome barriers to commercialization are quite fundamental, and aren’t likely to be resolved by government mandate. If enough money is thrown at it, cellulosic ethanol will of course be produced. But it can never be a scalable, economic reality.
Broadly speaking, in the world of next generation biofuels there are contenders, pretenders, and niches. Over the past decade, we have thrown a lot of money at pretenders and have little to show for it. There are many reasons for this, but fundamentally I believe it boils down to the fact that our political leaders can’t sort the wheat from the chaff. If a proponent extols the benefits of hydrogen, cellulose, or algae – the politicians just don’t know enough to ask the right critical questions. They listen – often to the very people who will benefit from more funding – and then they allocate money. Billions of dollars and little progress later, they or their successors may begin to realize that they have been misled and they start to dial the funding back.
Here is how I define a next generation Biofuel Pretender: A company or group that makes grandiose promises about the ability of a technology to displace large amounts of fossil fuel, despite facing significant (and often unrecognized) barriers to commercialization.
Here are some examples:
The poster child for the pretenders. Proponents ignored practical realities in many different areas, including fuel cell vehicles that cost a million dollars, the fact that most hydrogen is produced from natural gas, the fact that the energy density of hydrogen is very low, and the fact that there are multiple issues with hydrogen storage and transport. Technical breakthroughs were being counted on to solve these challenges. After all, we put a man on the moon. Surely we could solve these challenges.
The real problem is that the potential for success falls rapidly as the number of needed breakthroughs pile up. Imagine for instance that the following – cost of production, cost effective storage, and cost effective transport – each have a 25% chance of achieving commercial viability in the next 20 years. The total chance for success of all three in that case falls to 1.5% – so this is overall probability of success. Thus, the vast majority of technologies that require multiple technical breakthroughs will fail to materialize commercially except perhaps over a much longer period of time.
As was the case with hydrogen, this one requires multiple technical breakthroughs before commercial (unsubsidized) viability can be achieved. I won’t go through them all now, as I have covered them before. The fundamental reason that cellulosic ethanol won’t scale up to displace large amounts of gasoline is that the energy efficiency of the process is so low. You have the sugars that make up cellulose locked up tightly in the biomass – which has a low energy density to start with. So you add energy to unlock the sugar and turn it into ethanol, and then you end up with ethanol in water. More energy inputs are required to get the ethanol out. Even if the energy can be supplied by the by-products of the process like lignin, the net BTUs of liquid fuel that you end up with are going to be low relative to what you started with.
For example, assume you start off with 10 BTUs of biomass. You expend energy to get it to the factory, to process it, and then to get the water out. You burn part of the biomass to fuel the process, and input some fossil fuel. You might net something like 3 BTUs of liquid fuel from the 10 BTUs of biomass you started with.
Don’t confuse this with fossil fuel energy balance, though. If the external energy inputs in this example only amounted to 1 BTU of fossil fuel, one could claim a fossil fuel energy balance of 3/1. But that doesn’t change the fact the final liquid fuel input is a small fraction of the starting BTUs in the biomass.
This is analogous to the situation with oil shale, which is why I have compared the two. There may in fact be a trillion or more barrels of oil shale locked up in Colorado, Utah, and Wyoming. But if the extraction of those barrels required a trillion barrels worth of energy inputs and lots of water – then that oil shale might as well be on the moon. That means that a trillion barrels isn’t really a trillion barrels in the case of oil shale, and a billion tons of biomass is much smaller than it seems when talking about cellulosic ethanol.
So despite the claims from the EPA that the “Renewable Fuel Standard program will increase the volume of renewable fuel required to be blended into gasoline from 9 billion gallons in 2008 to 36 billion gallons by 2022” – that is not going to happen unless the government is willing to throw massive amounts of money at an inefficient process.
Like many, I was initially enchanted by the possibility of weaning the world away from fossil fuels by using fuel made from algae. Proponents wrote articles suggesting that we could do just that, provided the necessary investments are made.
Sadly, the story is much more complex than that. The U.S. DOE funded a study for many years into the potential of algae to produce fuel. (For an overview of where things stand from John Benemann, one of the men who co-authored the close-out report of that study, see Algal Biodiesel: Fact or Fiction?) The problem is again one of needing to surmount multiple technical hurdles, and the close-out report states that reality. Again, I won’t go into those details, as that has been covered before.
While it is a fact that you can produce fuel from algae, the challenges are such that John has written that you can’t even buy algal biofuel for $100/gallon. He said that if you want to separate the reality from the hype, just try to secure a contract with someone to supply you with algal fuel.
First Generation Biodiesel
This story is primarily about 2nd generation fuels, and as such I won’t get into corn ethanol issues. But I will say a bit about biodiesel. As indicated in the Wall Street Journal story, conventional biodiesel producers are in trouble. Briefly, a conventional biodiesel producer is someone who takes vegetable oils or animal fats and uses methanol (almost all of which is fossil-fuel derived) and converts that into an oxygenated compound (called a mono-alkyl ester). This compound has been defined as ‘biodiesel’, and can be used – subject to certain limitations – in a diesel engine.
Again, the problems are fundamental. It takes a lot of effort (energy, cost) to produce most of the oils that are used as raw materials, and then you have to react with methanol – which usually contains a lot of embodied fossil fuel energy. Up til now, the first generation biodiesel producers have benefited from a high level of protectionism (to the extent of punishing the more efficient 2nd generation producers). But even with the protectionism and the subsidies, producers are still struggling to survive.
There are a number of miscellaneous pretenders that we probably don’t need to discuss in depth, such as various free energy schemes or water as a fuel. If you think you might be dealing with a pretender, one caution flag is when their promoters are from backgrounds that have nothing to do with energy. For instance, the person who founded the dot.com that ultimately morphs into an energy company is almost certainly a pretender who is chasing investment funds.
To summarize, the biofuel pretenders fall into several broad categories. The big ones are:
• Most would-be cellulosic ethanol producers
• Most would-be algal biofuel producers
• Most first generation biodiesel producers
This isn’t to say that none of these will work in any circumstances. I will get into that when I talk about niches. But I will say that I am confident that none of these are scalable solutions to our fossil fuel dependence. The problem is that political leaders have been, or are still convinced that there is great potential for some of these and we waste billions of dollars chasing fantasies. This is a great distraction, causing a loss of precious time and public goodwill as taxpayer money is squandered chasing schemes that ultimately will not pan out.
In the next installment, I will talk about contenders – options that I think can compete with fossil fuels on a level playing field.
I am working on a story inspired by last week’s Wall Street Journal article:
It is taking longer than anticipated, but hopefully I will have something up tonight or early tomorrow. Until then, I thought I would share a couple of odd energy stories this Sunday. The first, courtesy of Solar Roadways’ press page:
US DEPARTMENT OF TRANSPORTATION AWARDS $100,000 RESEARCH CONTRACT TO SOLAR ROADWAYS
Funds intelligent roads and parking lots
SOLAR ROADWAYS, SAGLE, IDAHO (August 25, 2009)- Solar Roadways today announced that it has been awarded a DOT contract that will enable them to prototype the first ever Solar Road Panel.
The Solar Roadways will collect solar energy to power businesses and homes via structurally-engineered solar panels that are driven upon, to be placed in parking lots and roadways in lieu of petroleum-based asphalt surfaces.
The Solar Road Panels will contain embedded LEDs which “paint” the road lines from beneath to provide safer nighttime driving, as well as to give up to the minute instructions (via the road) to drivers (i.e. “detour ahead”). The road will be able to sense wildlife on the road and can warn drivers to “slow down”. There will also be embedded heating elements in the surface to prevent snow and ice buildup, providing for safer winter driving. This feature packed system will become an intelligent highway that will double as a secure, intelligent, decentralized, self-healing power grid which will enable a gradual weaning from fossil fuels.
Replacing asphalt roads and parking lots with Solar Roadway panels will be a major step toward halting climate change. Fully electric vehicles will be able to recharge along the roadway and in parking lots, finally making electric cars practical for long trips.
It is estimated that is will take roughly five billion (a stimulus package in itself) 12′ by 12′ Solar Road Panels to cover the asphalt surfaces in the U.S. alone, allowing us to produce three times more power than we’ve ever used as a nation – almost enough to power the entire world.
I like the idea of converting roads into energy producers, but it seems like a real long-shot. A number of questions immediately spring to mind, but their FAQ attempts to take many of them on. I call it to your attention not because I think it will work (I haven’t had time to study it), but simply because of the novelty of the idea.
The second story is about a highly integrated variation of the algal fuel concept in Arizona:
How it works
• Farm waste (straw, wood chips, cattle manure) heated in “gasification” unit.
• Gasification produces hydrogen and carbon monoxide, and creates a charcoal-like fertilizer called “biochar.”
• Gases are burned to make electricity, producing carbon dioxide.
• Carbon dioxide is pumped into ponds to nourish algae.
• Small crustaceans called daphnia eat the algae.
• Daphnia are harvested, pressed and cooked to process oil.
• Oil is refined to biodiesel; daphnia waste can feed animals.
• The biochar, electricity, biodiesel and daphnia waste is sold.
I was asked to comment on the scheme, and did so near the end of the article – following comments from Professor Mark Edwards, whose book I reviewed here. As I said, it is pretty complicated and interconnected, which provides more technology risks. Water usage in the desert will also be high, unless they are using some kind of waste water.
On the other hand, I think algal fuel can only work as part of an integrated scheme that provides other products/benefits (unless of course there is a breakthrough in which algae can be made to excrete their oil without having to harvest them).
It’s the end of a very long day, but I couldn’t resist commenting on the recent story from Joule Biotechnologies:
CAMBRIDGE, Mass.–(BUSINESS WIRE)–Joule Biotechnologies, Inc., an innovative bioengineering startup developing game-changing alternative energy solutions, today unveiled its breakthrough Helioculture™ technology—a revolutionary process that harnesses sunlight to directly convert carbon dioxide (CO2) into SolarFuel™ liquid energy. This eco-friendly, direct-to-fuel conversion requires no agricultural land or fresh water, and leverages a highly scalable system capable of producing more than 20,000 gallons of renewable ethanol or hydrocarbons per acre annually—far eclipsing productivity levels of current alternatives while rivaling the costs of fossil fuels.
Joule SolarFuel liquid energy meets today’s vehicle fuel specifications and infrastructure, and is expected to achieve widespread production at the energy equivalent of less than $50 per barrel. The company’s first product offering, SolarEthanol™ fuel, will be ready for commercial-scale development in 2010. Joule has also demonstrated proof of concept for producing hydrocarbon fuel and expects process demonstration by 2011.
The press release is a couple of weeks old now, and I ignored it at first. It almost reads like satire. Maybe it is? But I have seen it picked up now and reported at face value by some sites. So I thought I would weigh in.
Seriously, since we starting running cars on oil 100 years ago, how many disruptive technologies have there actually been in this area? None. There have been improvements, but we are still running most of our cars on oil. A disruptive technology would be something that resulted either in us running most of our cars on something other than oil, or something that caused us to abandon our cars for something else.
Cold fusion-powered hovercraft? Now that would be disruptive. A battery with a 200-mile range for a full-sized car? Also disruptive. When we start to run short of oil? Disruptive in a different way. But the press release above? I have seen a thousand others just like it. Eventually maybe one of these disruptive pretenders will pan out. But if I was a betting man…
Tom Whipple elaborated on this story today (which is what prompted me to go ahead and write this up):
Yet another potentially disruptive technology has been announced. This time a small company, Joule Biotechnologies, up in Cambridge MA says it has developed a process to produce hydrocarbon based fuels from carbon dioxide and water. As with any too-good-to-be-true announcement skeptics abound – just on general principles.
The process is centered on a “photobioreactor” (think a solar panel with liquid inside) which contains brackish water and a still secret microorganism that has been genetically engineered to absorb carbon dioxide and excrete hydrocarbons when subjected to sunlight.
Somebody with a mathematical bent calculated that if an area the size of the Texas panhandle were covered with photobioreactors, they could produce enough fuel each year that we could say goodbye to oil – drilling, depletion, OPEC, refineries, some forms of pollution, and all the rest. This is sounding much too good to be true for the company estimates the fuel could be produced for $50 a barrel.
The next step, of course, is to get this out of the laboratory and into a pilot plant so we can all see if turning CO2 and water with the help of some sunlight into fuel can really work. A pilot scale plant is planned for the southwest (where they have lots of sunlight) early next year which would be followed by a large scale demonstration plant in 2011.
These people haven’t even built a pilot plant, yet they are talking about widespread production at $50/bbl. Please. Just once I would like to see one of these far-fetched press releases end with “Product is currently for sale for $50/bbl.” If you notice, this is always what is expected. It just never materializes.
This marks the final installment of answers to questions recently submitted by readers. This final installment covers the impact of E10 on fuel efficiency, my general optimism (or lack thereof), algal fuel, thermodynamics and energy limitations, Accoya, and litigation. Once again, thanks to the readers who submitted questions, and thanks to those who helped answer them. Without the help I received, this might have been a 10-part series.
Here are the links to the previous installments:
Part 2 – Covered coal-to-liquids, technology hype, green gasoline, refining improvements, allocation of money toward renewables, electricity consumption, the Automotive X Prize, Big Oil, cellulosic ethanol, and Exxon’s recent algae announcement
Wendell Mercantile wrote: The average fuel economy in Minnesota, which mandates E10, was 11% worse than in Wisconsin where drivers are allowed to choose. Minnesota drivers actually went fewer miles, while burning more fuel to do it. Answer
Melanie wrote: Reading over your last Q&A session, you seemed pretty optimistic. Have the events over the course of the last 2 years left you with the same amount of optimism or more/less? Answer
Mike wrote: I know your stance towards algae biofuel companies, but I want to bring a company to your attention called PetroAlgae. (I couldn’t find a reference to them on your blog.) I think they’re pursing a very nice model of licensing instead of building and also combining food with fuel production. They are claiming that the proceeds from the proteins should almost cover the costs of the whole process. With your expertise (and maybe knowledge about their processes), could you say something about the feasibility of those claims? Answer
Evan asked: 1 How can a nation/person “create” more energy/matter, if they do not take it from another nation/person?
2 Will renewable energy be able to account for the fundamental law of conservation of energy/mass? Economically?
3 If the US is the least efficient user of highly demanded fossil energy, why is its currency(time) worth so much? Do Americans just work too much?
4 Will we see currency exchange rate changes, which are weighted more upon per capita (person) energy efficiency? Answer
James Clary asked: What do you think about the economist article about hardening soft wood?
takchess asked: Q: Do you envision that there will be a lot of IP lawsuit once cleantech is mainstream? Do you think this will be or is a disincentive for investment in this area? Answer
This one was debated at length in the comments following the question thread, but I just wanted to add that I have posted a guest essay on this topic before: Wisconsin Tops Minnesota. It was written by Gary Dikkers.
That’s a good question. I suppose in general I am more optimistic over the short term, primarily because I saw a relatively fast response to high oil prices. People did cut back on consumption, which was encouraging. The downside is that we are still dealing with fallout from those high oil prices. Not that I have ever been someone who could entertain the thought of a multi-billion person die-off due to peak oil, but I feel better about the overall prospects for humanity. I don’t feel as optimistic about the prospects for the economy, though. I think we are approaching The Long Recession (and may have entered it). I have never seen such a poor job market before. This is going to be extremely tough for a lot of people who have gotten used to a certain standard of living.
I am seeing this first hand in the engineering ranks right now. Since I started my career, demand for engineers has always exceeded supply. Presently, that is not the case (as I am finding because I am still trying to place some engineers that we recently laid off). The Wall Street Journal just reported that 50% of this year’s college graduates do not have jobs. If the job market is to improve, we have to have a recovery. If recovery causes demand for oil to increase, prices are going to climb and the recovery may stall. Wash, rinse, repeat.
I think the way we live is going to change. That’s not necessarily pessimism, because the way we live has to change. I don’t think many people would suggest that our current consumption (and not just of oil) is sustainable. The pessimistic side of me says that the way we live will change because that change will be forced upon us in unpleasant ways (e.g., people simply no longer able to maintain their standard of living), instead of governments making wise policy moves to prepare us for a future in which cheap energy is no longer plentiful.
I have heard of PetroAlgae, and just spent a bit of time on their website. Let me first say that I think upwards of 90% of the bioalgae companies out there are being highly irresponsible with their investors. The technology isn’t close to being capable of producing cost-competitive fuel, and we have companies grossly over-promising (or even committing outright fraud).
On the other hand, I do believe that algae can be a niche solution. The problem is that it is being pedaled as a scalable solution, and therefore companies are popping up all over the place to take investors money. Most will inevitably declare bankruptcy after a few years.
But let’s talk about the niches. In my opinion there are a couple of ways algae could work. If it is to be truly scalable so that it can be a big contributor to our fuel supplies, I only see one obvious path. Algae must be developed that can excrete oil. In this way, the algae can grow, you skim off the oil, and you avoid the materials handling nightmare of harvesting and processing the algae. But that is going to require new technology, and unfortunately the invention of new technology isn’t a given.
The second way that I think algae can work is if there is a valuable co-product that offsets the production costs. This is PetroAlgae’s claim. The problem I see with this approach is that it isn’t scalable. You are going to be limited by the ability to put co-product in the marketplace. If the co-product is sufficiently valuable (let’s say you engineer algae that can produce insulin), then you could indeed offset the expense of algae production. But as it scales, you start to flood the market with this valuable co-product, and it is no longer so valuable. Or, if the co-product is already a commodity, it isn’t going to command a high enough price to offset production costs. Thus, I think this approach will be limited to niches. The approach described in the previous paragraph is the only one I think can be scalable.
Specifically on PetroAlgae, let’s look at one of the claims made in the video hosted on their site. Executive VP Bill Haskell makes the claim that a commercial licensee of a PetroAlgae system can produce 1.5 million barrels of transportation fuel a year. Krassen Dimitrov has made a case (PDF warning) that I have yet to see seriously challenged that based on the solar insolation falling on the earth at best one might produce 1 gallon of algae-based fuel per square meter of area.
If we look at the 1.5 million barrel claim above, that ultimately translates into a land requirement of 15,560 acres for just growing the algae. That is a 24.3 square mile plot of land. To put that in perspective, this is a plot of land 4.5 times the size of the largest refinery in the U.S. (which also has a capacity of 140 times greater than that claimed for the algae production facility that occupies 4.5 times the amount of land). And we haven’t even begun to consider processing all that algae.
Bottom line? I think their claims are exaggerated. I suspect that if you asked them to produce data justifying that 1.5 million barrel claim, one would find that they are making projections from small experiments and don’t actually have data to back that up.
Let me try to answer these questions all together, because they are driving at the same theme. This isn’t really about creation of energy. Both fossil fuels and biofuels are about harnessing solar energy. In the case of fossil fuels, that is solar energy that was gathered over millions of years and cooked at high pressures and temperatures by the earth. Discovery of this ancient solar energy provided a windfall of energy that most of us take for granted.
We know this windfall is going to run out some day, and we already don’t like the fact that we have to rely on other countries to sell us part of their windfall. So we try to come up with schemes for capturing that solar energy and processing it immediately. This can of course be done in many ways, from direct solar capture, through the growing and conversion of biomass into energy. Generally the attempts to use solar power in real time suffer from various shortcomings (as do fossil fuels). However, some of those shortcomings are masked by the fact that the solar power that is being capture in real time is supplemented to a large extent by that same fossil energy we are seeking to replace.
The core of the problem is that many people – and I would say that most of our political leaders – don’t really appreciate the huge differences in the net energy from fossil fuels and the net energy from most renewable fuels. I have seen schemes floated in which our fossil fuels are displaced by cellulosic ethanol. You know what’s missing from those scenarios? The energy to produce the cellulosic ethanol. When that is taken into account, the primary energy production required to run a world on renewable energy is far greater than the primary energy production required to run a world on fossil fuel. So we have to do one of two things. We have to get used to the idea of eventually using a lot less energy, or we have to find better schemes for converting sunlight. (Or we will have to devote huge amounts of manpower to energy production – diverting productivity from the rest of the economy). In the short term, we will continue to draw heavily upon our fossil fuel reserves, but that can’t last forever.
In closing, let me offer up an example of how primary energy would need to increase if we switched from the high energy returns offered by fossil fuels to the much lower energy returns of most fossil fuels. Here are some numbers I have put together in the past. In a fossil fuel-based society, the energy return is currently somewhere around 10/1. Of 85 million barrels per day, 8.5 million of those barrel equivalents were used to produce the oil. For the sake of this exercise, let’s assume that oil was used to make oil. That leaves us with a net of 76.5 million barrels with which to power the world.
[Note: Thanks to Engineer-Poet for pointing out a math error here.] Now, drop the energy return of that same society to a biofuel range of 1.3 to 1. We have to solve two equations here: Net Energy = Energy out – Energy in, and Energy return = Energy out/Energy in. Solving these two equations for a net of 76.5 million barrels of oil means we have to produce a total of 255 million barrels of oil equivalent. In the fossil fuel society, it takes 85 million barrels of total production to sustain it. In the low energy return society that approximates today’s biofuels, it takes 255 million barrels per day to sustain it. That means that if we tried to run the world on low energy return biofuels, we would need to triple the overall energy output over what we produce today.
People who say energy return doesn’t matter fail to grasp this point. Unless biofuels are able to substantially improve their energy return – or we have a huge reduction in consumption – a lot more resources are going to have to be devoted to the energy sector.
Of course caveats abound when using an energy return to evaluate a biofuel. As I pointed out in one of my essays on Coskata, it is also possible to have a very good energy return and not net out much energy. Consider an example in which you start with 100 BTUs of biomass, consume 99 BTUs of the biomass to convert it to 1 BTU of liquid fuel, and input 0.1 BTUs of fossil fuel in the process. You could argue that your fossil fuel energy return was 10/1, but your conversion efficiency was terrible. You started with 100 BTUs of biomass and ended up with 1 BTU of liquid fuel.
These are some of the considerations we have to undertake as we try to ramp up biofuels to displace fossil fuels.
You probably knew this – which is why I imagine you asked the question – but I was interviewed for that article. The interview took place way back in January, and I had forgotten about it until someone sent me the link.
I thought the article captured the gist of the interview in a concise manner. The key points I make to people about Accoya are generally around the modification of the hydroxyl groups in the wood, and how that impacts the properties of the wood.
I do want to reiterate that despite the career change I am in the process of making, I still feel like Accoya is a fantastic product with a bright future. I will maintain an advisory relationship to Accsys/Titan Wood after I leave, so you will probably see me writing about it on occasion in the future.
There are several lawyers who read this blog, and almost every time I make a negative comment about their profession, one or more of them sends me a note. And I will probably get one after this.
In my opinion, litigation is attracted to big piles of money. Even if 99% of lawyers only go after cases with strong merit, there are always going to be some lawyers ready to file a suit at the slightest whiff of cash. My feeling is that we have too many lawyers, and the marginal lawyer has to find a way to make a living. So we get more lawsuits than we should have.
There is a lot of money flowing into the clean tech sector, and there are many people jumping in who may not have a clear picture of who owns various IP. That is a prescription for lawsuits. So, yes, I do expect more lawsuits as clean tech goes mainstream. That is the society we live in. Will it be a disincentive to invest? I don’t know. I do know that the money that flows out of the sector and into lawyers pockets won’t necessarily be invested back into the sector. So there will be a drain in my opinion. It could be that it is a tiny fraction in relation to the overall investments. Let’s hope so.
OK, as far as I know I got the ones that hadn’t been addressed already (either in previous essays or by someone else in the comments). If someone feels like they didn’t get a question answered, ask in the comments following this essay and I will try to address it.
- Accsys Technologies
- air pollution
- airline industry
- airplane transportation
- Al Gore
- algal biodiesel
- alternative energy
- American Coalition for Ethanol
- American Petroleum Institute
- auto industry
- avoided cost
- Barack Obama
- Barbara Boxer
- Bill Gates
- Bill O'Reilly
- Bill Richardson
- biomass gasification
- Black Swan
- blend wall
- blog statistics
- Bloom Energy
- Bob Dinneen
- book review
- Brazilian ethanol
- Brian Schweitzer
- Business Week
- car pooling
- carbon offsets
- carbon sequestration
- carbon tax
- cash for clunkers
- cellulosic ethanol
- Changing World Technologies
- Chevy Volt
- Chuck Schumer
- climate change
- combustion engine
- compression ratio
- conspiracy theories
- corn prices
- Craig Thomas
- credit crisis
- crude oil
- curriculum vitae
- Cyclone Gonu
- dan kammen
- Dan Rather
- deepwater drilling
- deficit spending
- Dick Cheney
- diesel engine
- distributed energy
- domestic production
- Doug MacIntyre
- due diligence
- E3 Biofuels
- Ed Markey
- electric cars
- electricity usage
- energy balance
- energy consumption
- energy crisis
- energy independence
- Energy Information Administration
- energy iq
- energy policy
- energy security
- energy storage
- environmental regulations
- ethanol mandate
- ethanol prices
- ethanol production
- ethanol separation
- ethanol subsidies
- Exxon Valdez
- farm policy
- farm prices
- Financial Sense
- fischer tropsch
- food prices
- Fox News
- free energy
- fuel cells
- fuel efficiency
- game wardens
- gas inventories
- gas prices
- gas shortages
- gas tax
- gas wells
- gasoline blending
- gasoline demand
- gasoline imports
- General Motors
- genetic engineering
- Global Energy Holdings Group
- global warming
- Goldman Sachs
- green building
- green diesel
- greenhouse gases
- Growth Energy
- guest post
- Gulf of Mexico
- Harry Reid
- health care
- heating oil
- Hillary Clinton
- Hirsch Report
- hubbert linearization
- hubbert peak
- huffington post
- Hugo Chavez
- Hurricane Ike
- Hurricane Katrina
- Jamie Court
- Jeff Goodell
- Jeff Rubin
- jet fuel
- Jim Doyle
- Jim Kunstler
- Jim Mulva
- john benemann
- John Dingell
- John Edwards
- John McCain
- john simpson
- Jon Stewart
- jon tester
- Joseph Kennedy
- Judy Dugan
- ken deffeyes
- Ken Salazar
- kidney stone
- Krassen Dimitrov
- land prices
- Larry Page
- law enforcement
- Lisa Margonelli
- Mark Edwards
- Mark Jacobson
- mass transit
- Matt Simmons
- Media coverage
- methane coupling
- Michael Wang
- Money Morning
- Morgan Downey
- Nancy Pelosi
- Nassim Nicholas Taleb
- national debt
- National Geographic
- natural gas
- new york city
- nitrogen fixation
- North Sea
- nuclear energy
- ocean currents
- ocean thermal energy conversion
- off topic
- oil companies
- oil consumption
- oil demand
- oil discoveries
- oil exploration
- oil exports
- oil imports
- oil inventories
- oil lease
- oil prices
- oil production
- oil refineries
- oil reserves
- oil rigs
- oil shale
- oil spills
- oil watchdog
- oil wells
- opinion survey
- osmotic power
- Pacific Ethanol
- palm oil
- Paul Sankey
- Peak Convenience
- Peak Demand
- Peak Lite
- Peak Oil
- personal finance
- peter maass
- plasma gasification
- population control
- posting etiquette
- price gouging
- price manipulation
- profit margins
- Prop 87
- Public Citizen
- PVT Solar
- pyrolysis oil
- Rahm Emanuel
- range fuels
- rate schedule
- Ray Kurzweil
- reader submission
- Red Cavaney
- refining margins
- renal colic
- renewable diesel
- renewable energy
- Renewable Fuels Association
- Robert Bryce
- Robert Cohen
- Robert Hirsch
- Robert Menendez
- Robert Zubrin
- Rolling Stone
- Ron Wyden
- Sarah Palin
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- smart grid
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- solar hot water heater
- solar power
- solar PV
- solar thermal
- Solix Biofuels
- South Africa
- speed limit
- Steven Chu
- Strategic Petroleum Reserve
- sugar subsidies
- sugarcane ethanol
- summer gasoline
- survival training
- T. Boone Pickens
- tar sands
- Ted Kennedy
- Tesla Motors
- The Daily Show
- The Guardian
- Thermal Depolymerization
- thin film solar
- tidal energy
- Tim Hamilton
- Titan Wood
- TMO Renewables
- Tom Cruise
- topsoil depletion
- Tyson Foods
- Tyson Slocum
- United Kingdom
- universal health care
- Venture Beat
- Vinod Khosla
- wall street journal
- Warren Buffett
- water car
- water usage
- wave power
- Web 2.0
- wheat prices
- wind power
- windfall profits
- Windows Vista
- winter gasoline
- Yellowstone National Park
- zero point energy