329 comments on Khosla Responds: "Imagining the Future of Gasoline: Reality or Blue-sky Dreaming?"
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329 comments on Khosla Responds: "Imagining the Future of Gasoline: Reality or Blue-sky Dreaming?"
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Yes. I have read through and commented on the drafts as he was working on the essay. We also spent another hour on the phone this week discussing some of these arguments. I obviously still have areas of disagreement, but I will let others make their specific criticisms known.
Whether readers agree or disagree with Mr. Khosla's ideas, I think we can all agree that debating the issues is the best way to get past hype and myth and into what can be scientifically supported.
Am I being unfair?
So this is not exactly Star Trek technology.
I believe in counting chickens when they are hatched. In this case, I think a commercial plant, esp. with open books, would be "hatched."
You can guarantee that some variation of this will become known as the new, worse version of Monsanto's "Frankenfoods" or "terminator seeds."
Just as the petrochemical driven Green Revolution morphed into the reviled slogans above, so too with FTF (food to fuels). Right now biofuels are the darling of the sustainable development crowd, but that will change in short order when masses of economically marginal "consumers" begin to starve and die.
As you point out, "Trajectory" is what counts. And the Trajectory is to gradually convert food staples and cropland to motor fuels.
Imagine the bumpersticker
The first part might contain the name of a company, country, or even individual (if they become too closely identified with FTF). The last part might contain a motive or result, "so SUVs can drive, while people starve." etc.
If you dive into this, you and your companies will risk becoming the new Monsantos.
One thing I wonder about is his belief that cellulosic ethanol will outcompete biodiesel in gallons per acre. Currently, that is so not the case. Putting aside the ecological problems with palm oil, it's 5000 kg per hectare, far better than any currently producing ethanol crop. And what about biodiesel from algae? That's the fair point of comparison with cellulosic, which isn't quite there yet either.
Unless the problems of biodiesel from algae are more than efficiency and scaling...
But I think his rejection of EROEI is weird. What ultimately matters is how much energy we can use in total.
But I am playing devil's advocate. Speculating on future trends is what entrepreneurs are in business to do. Governments shouldn't bet on one horse when there's a whole field of promising contenders and new breakthroughs are announced every month. Better they should all compete without subsidies or preferential treatment.
On the one hand, it is fairly clear that we can not replace every drop of oil we use from corn. On the other hand it seems equally obvious that ethanol, particularly if you are willing to consider cellulosic (I tend to agree with Odogragh here however), could play a very important role in offsetting declining oil supply.
I read somewhere that if you wanted to replace all global electricity consumption with solar technology, you would ahve to cover the entire earth with panels - so solar is worthless, right?
I see no facts criticised with no facts. Save the atta-boys for something worth reading not put-downs.
I believe your solar assertion, while I realize that you were using it to make a point, is erroneous.
http://www.quaker.org/tqe/2006/TQE145-EN-Hybrid-Details.html
OK, it's one source and who knows how close it is, but let's see what happens...
Assume 4 sun hours per day (4 hrs at 1000 watts/sq.m), a 12% efficient panel will produce 1000x0.12x4x365=175,200 Whr per year. Take 4000 TW (4E15 Watts) divided by 175,200 = 22.8E9 square meters, = 22831 sq. km = 8800 sq. mi. for a square area that equates to 93 miles x 93 miles. To cover the electrical use for the entire country.
So unless the 4000TW number is off by orders of magnitude, we are nowhere near having to cover the US with solar panels to provide our current consumption (which BTW could be easily reduced substantially, but that's another topic). Does the rest of the world consume orders of magnitude more electricity per surface area than the US? I'd bet dinner not, and I only bet dinner when I know I'm going to win.
I wonder how much demand you could satisfy by covering a substantial fraction of all the roofs with solar panels? I realize currently that is cost-prohibitive, but I hope we see this happen someday.
The NanoSolar plant being built in/near silicon valley will produce 430MW of panels per year, supposedly at much cheaper prices than anything currently available. That's enough panels for one heck of a lot of rooftops, and from just one plant. It's a safe bet that if they come close to their price points and production volumes after they ramp-up that we'll see them getting tons of additional funding and building more plants.
I think it would be downright funny if all this talk about ethanol, hydrogen, CTL, etc. was largely derailed by one of the "old school" renewables, solar, that finally had the major price breakthrough we've all been hoping for since the 1970's.
Why would you put all the solar panels in one 93 square mile area? For one it would become a huge terrorist target. Second it would be vulnurable to natural disasters (tornados, earthquakes, etc..)
I think a distributed solution of using business and household rooftops makes way more sense. Supplement that with wind and tidal power, and it could go a long way towards getting households and small business into a more sustainable model.
It doesn't solve the liquid fuel problem though.
Rooftops are the perfect place for panels, and there's way more than enough existing roof space to cover that 8800 square miles. The only down side today is the high up-front cost, and the low supply of panels due to heavy solarization in Europe and Germany in particular.
Also, in California, at least, they figure 5 hours of sun/day; some are now starting to use 6 hours. Right now, I'm expected to be putting out 5.6KW/day; I'm actually at 9 +/- 0.3. Remains to be see what happens during 35 or 40 staight days of rain.
Rat
I think at some point it will become apparant that we can live pretty comfortably with alot less electricity than that though, so we really won't need even as much generation as you calculated.
There is alot of energy in wind and solar, you just can't put them in your gas tank. Oh well.
You can if we had electric vehicles. Has everyone seen this?
http://www.teslamotors.com
I can. Here are the raw numbers I will start with:
Total land are in the U.S. = 3,718,711 sq mi. http://en.wikipedia.org/wiki/United_states
Percent arable land in the U.S. = 18.01% https://www.cia.gov/cia/publications/factbook/geos/us.html
Average corn yield per acre (2005) = 148.4 bushels http://www.usda.gov/nass/aggraphs/cornyld.htm
So, 18.01% of 3,718,711 is 669,740 sq mi arable land, times 640 acres per square mile is 428633504.7 acres of arable land, times an average yield of 148.4 bushels times 3 gallons ethanol per bushel is about 190 billion gallons of ethanol. The U.S. uses about 150 billion gallons of gasoline per year. I don't have the exact energy conversion between ethanol and gasoline, but the amounts of energy are in the same ballpark. So we could theoretically not only fuel our trucking fleet but all of our automobiles, and an be energy independent without sacrifice if we just grow corn of every arable acre in the country. Fortunately, Canada is obligated by NAFTA to supply us with natural gas, so we can still make fertilizer to keep the corn yields up, and we can still eat if we can find an optimal deer population that will feed us but without eating so much corn to have an significant impact on yields.
This is looking easy. On an unrelated topic, I think I can run a marathon in about an hour and twenty minutes based on my time in the 100m when I was in high school.
Ah, but the trucking fleet runs mainly on diesel, which is not included in the gasoline number. Diesel has an even higher energy content than gasoline, and diesel engines are far more efficient. So, to replace the 50 billion or so gallons of diesel we use each year would take around 100 billion more gallons of ethanol.
Regarding the energy content of gasoline versus ethanol, ethanol has about 65% of the BTUs of gasoline.
However, using your numbers, it does seem that it could make a difference. I have argued before that 10% of consumption on a BTU basis would make ethanol a huge contributer to replacing declining oil reserves. Even 10% of gasoline use would mean a lot, both in terms of its contribution as a fuel and as a replacement for the lightest refinery products - freeing up much needed capacity.
So, 10% of 150 billion gallons times 1.3 (to convert from volume to BTU) equals about 20 billion gallons. This is about 10.5% of the 190 billion gallons figure you cite for all US agricultural land.
Now, I also acknowledge that taking a mid-range EROEI figure of of 1.25, the net contribution to energy is only about 2% of gasoline use with the remainder being converted from other fuel sources.
My point is not that it is a good thing to do. It may not be. However, this analysis reveals a lot more about the actual tradeoffs than dismissing it because it can't solve all of our energy problems single handedly.
The average yields cited per acre are in places that have 8-10 feet of rich soil and sufficient water.
"Ethanol, butanol and any liquid fuel that has a shot at replacing our gasoline needs has to scale up to 2,000-3,000 gallons per acre."
Using your own calculations if cellulose ethanol is scalable to 2,000 bushels per acre as Mr. Khosla seems to believe, then it would require less then 10% of the U.S. arable land to completely replace our gasoline consumption with cellulose based ethanol. 10% seems like a much more reasonable number and something that may be achievable.
However this changes the main question to, "What is the evidence that Cellulose Ethanol can be scaled to 2,000 bushels per acre, given current methods." I think this question deserves much consideration, because it is at the heart of the debate.
No! You do not need to cover the entire earth with panels to replace the entire electricity demand with solar. For rough calculations... The earth is receiving an average of 1,000 watts/m2 with half the earth's surface lit at any given time, 5x10^14 m2. This yields 2.5x10^17 average watts at any moment. With 8760 hours available per year, this yields 2.2x10^21 watt/hr or 2.2x10^12 GW/hrs!! Solar cells vary in their efficiency from 6% to 30%. Most solar cells have around 14% effeciency. Thus using 14% effeciency that gives 3.1x10^11 GW/hrs per year.
In 2003, the world used 14,781 billion killowatt/hrs or 1.4x10^7 GW/hrs for easy comparison above. That is 4 orders of magnitude lower.
Maybe you meant only on available land mass? The oceans make up 71% of the earth's surface. Thus that reduces available energy to 9x10^10 GW/hrs per year. Obviously, it is still orders of magnitude more than needed.
So what percentage of land mass would be needed? .02%!!
- Jack
-PoP
http://sharesleuth.com/2006/08/moonshine_blindness.html
This doesn't undermine the potential of another company to do it right, but there's a lot of hype about innovation that isn't being matched with results (or even effort).
:-)
Agreed. I found it much more compelling and convincing than the presentation which RR critiqued to begin this discussion. Something very tangible has been gained and it has been fun and engaging to watch the discourse play out. Kudos, Mr Khosla, on your efforts.
Most of the early critiques here are kind of annoying and nitpicking. "It's too long" -- c'mon. It was written for an audience that values detailed analysis over the punchy and dumbed-down distillations (often misleading) you'd get in commercial contexts.
The pricing issue with ethanol seems like a serious issue though. Mr Khosla, you invoke a conspiracy theory of your own after waving off readers who believe in such things. Somehow, after 20 years of incentives, the oil industries are still manipulating the price to remain at precise margin above gasoline? I'd like a more compelling (or at least better supported) explanation there.
One comment I'd like to add is that it is not only in poor counrties that the rural poor are likely to benefit from a large increase in ethanol production but also farmers and rural communities in the U.S. and the E.U. too. The price of corn is ludicrously low now, and if increased ethanol production can bring a doubling of corn prices, that would diminish greatly the subsidies that U.S. tax payers pay to farmers while also increasing incomes in very small marginal communities in the corn-growing and grass-growing regions of the U.S.
In my opinion, cost-benefit analysis should include social costs and social benefits, and in this case the economic and social benefits to rural America are potentially huge.
I hope Mr. Khosla is correct in his vision. In any case, we will know within a few years if some of his essential and questionable premises are right--or are merely excessively optimistic assumptions. Either some of the technologies for producing alcohol from grass will scale up and work at low cost--or they won't; the outcome may be clear pretty soon, in a couple of years or thereabouts.
The rural farmer will make no more money on corn for ethanol than they do for corn now. ADM stock isn't up 50% over the past calendar year because the rural farmer is pulling down the ethanol money.
This money for the rural poor is the same lie trotted out every time venture capitilists and multinational corps have needed us to vote for their politicians in the past.
Please compare previous promises of sudden money for the rural poor to how events actually played out.
It is the old give me your vote now and I promise wealth and happiness later.
I hate to be so pessimistic,,but I have heard this too many times and have yet to see the working farmer gain.
If ethanol could stand on it's own merits they wouldn't have to trot these tired lies out in front of us again.
Hopefully I'm wrong, maybe there is a farmer on TOD that can tell me different. If so I will happily vote for ethanol just to bring some money into the fields.
Regards
If the production of ethanol increases the demand for corn, please explain why you think this would not tend to cause the price of corn to increase.
Econ 101 strikes again.
I wish someone could show me the money helping out the rural poor and small farmer now.
This tired lie of vote for the politician that supports X and it will bring money into the poor folks has been around since the coal companies told it to the people of appalachia 150 years ago.
Are any farmers seeing good money from ethanol now?
We are making ethanol now right?
<Econ 101 strikes again>
You are exactly right..Every farmer in America is salivating to make whatever the ethanol crop dejour is. And they will grow millions of tons of it,,but guess what. Vinod's ethanol plant will only need 1/2 a million tons this season,,.so the farmers will get what they get every year...dick.
If the ethanol industry wants to help the rural poor why don't they contract a fair price on the front end. Tell me now how much they will pay per bushel.
Not when you have the crop du jour gushing out of the silos ,,and oops ,,suddenly low demand.
In these hear parts, relying on arguments from economists means you are gonna have to prove what you say, not just hand wave.
Now the orginal poster expressed:
Please compare previous promises of sudden money for the rural poor to how events actually played out.
It is the old give me your vote now and I promise wealth and happiness later.
And your response was:
In fact (not fantasy) new ethanol distilleries have saved more than one small Minnesota town.
- When Don Sailorman uses the word "fact" he's been known to tie that to global sea water levels not rising and that e85 gets better milage in cars.
- Exactly how is an Ethanol plant NOT a manufactoring job?
Farming has historically ment long hours and low pay per gunga2006, and thus far Mr. Sailorman hasn't actually rebutted gunga2006's position.Lets move onto 'Econ 101':
Making booze from corn does mean a market for the corn. Howwever, such a world also means that the ultra-cheap energy that drives the tractors and makes rural land prices so high will be going away. Considering how most modern farming is done, exactly how will more expensive fuel and less valuable land effect operation of the modern farm? (Hint: The land is used as collateral to borrow against to buy the fancy, big, tractors and other equipment) If fuel prices go up and land prices drop ($7000 an acre 'farmland' becomes $500 an acre) how high does ethanol have to rise to balance out the spreadsheet?
Sorry about the multiple posts in reply but the more I think about this the more obvious it seems.
Say in a given year, CY2007, ethanol increases demand for corn by a factor of X. All of this talk of big money is ensuring supply will increase by a factor of X+.
If the price per bushel is going to rise, why don't the ethanol plants contract their price per bushel on the front end? Because they are pushing production to ensure supply is greater than any given years demand.
The ethanol proponents could kill this argument today. Vinod could come in and say " Gunga, you a**hole, I'm contracting a per bushel price of $X on the front end which is more than the poor farmers have ever seen. "
Most farmers would love to know how much they will be paid per bushel before they put seed to ground. If the price per bushel is going to be so high why don't the points of demand use front contracts instead of waiting to price the product at the silo?
Econ 201- The source of supply is fractured and the different sources of supply don't coordinate production for the most part. The point of demand relative to supply is consolidated and can choose their source of raw material.
This is why the small American farmer historically stays hand to mouth.
If ethanol will help America's energy needs let it stand on it's own. I just have a hard time accepting this, "all you poor folks will be paid" arguement until I see the money going to the fields.
Regards
The "Minneapolis Star Tribune" did a series on this topic not long ago, and so has WCCO TV news and various other Minnesota news organizations in case you want particular names, dates, amounts, profitability, and specific impacts on certain rural communities.
Is ethanol a silver bullet? Of course not. Could it be a silver BB? I'd say yes, based on hard evidence that exists now.
If the farmers saw money coming to the fields they wouldn't become ethanol plant ownners.
In yesterday's news, our US-house representative, Tom Osborne, spoke of concern of ethanol expansion moving too fast for our infrastructure. Of our 12 plants producing ethanol right now, only 4 are farmer-owned. See article:
http://www.Kearneyhub.com/sitelprinterFriendly.cfm?brd=268&dept_id=577571&newsid=17032387
Please provide a link showing us that most of Minnesota's ethanol plants are farmer owned.
The article also mentions that 12 plants are producing, 9 are under construction, and 23 are in the planning stages. Currently 1/3 of our corn is going towards ethanol. That means when all 44 are up and running, 8 of them will not have any corn to buy, because 36 of them will be using 100% of the corn produced in this state to produce ethanol. A lower post suggests the same situation in Iowa. Think about the implications of this: farming every inch of land that can possibly be farmed because of increased corn prices--farming what is now CRP land(often the only resting land, or wildlife habitat in an area of intensively farmed land), plowing up more virgin prairie, irrigating even more, less diversity in farm production (more corn-less of anything else), larger farms, more industrial farming, increased cost of food and any corn based products, less US ag exports, etc. In my drumbeat post, citing an excellent article from the Omaha World-Herald this past Sunday, it stated that a $100 million ethanol plant can be paid for in 1 year's worth production.
http://www.theoildrum.com/comments/2006/8/6/9105/08126/9#9
Now, reading between the lines, there is one hell of an incentive for investors to build these ethanol plants, get them paid for in one year, and then bail out?? (my guess) So, I differ in thinking with Tom Osborne, in that I am relieved that only 4 of our 12 plants are farmer owned, because I seriously don't think these plants will be operating in five years from now, but thats just MOHO. Now, I know that I have just provided some insight for a VC to speculate on when to get out of his investment in ethanol--I'd say about one or two years from now, if not sooner.
Renewable resources such as solar and wind with a move towards electricfication of transportation, increased rail both electric and other, and conservation are the way to go. The sooner we can move towards decentralizing our infrastructures the less hard we'll fall, but it doesn't look like that will happen soon enough.
http://www.kearneyhub.com/site/printerFriendly.cfm?brd=268&dept_id=577571&newsid=17032387
http://www.theoildrum.com/comments/2006/8/6/91051/08126/9#9
Any industry has the potentiality of growing too fast. (or too slow)
As you may or may not be aware, the hot new idea in Minnesota is to make legal the gadgets that will convert your car to run on flex-fuel--anything from E-85 to pure gasoline, and any blend in between. If this idea flies (and I think the odds are good), then it seems reasonable to expect a rather rapid expansion in the demand for E-85 in Minnesota, where it sells for forty cents a gallon less than 87 octane gasoline. Thus, if this gadget becomes popular, the demand for E-85 in this state could increase at double-digit percent rates for some years to come.
As so often happens, Minnesota leads the rest of the country in progressive ideas;-)