The Oil Drum

68 comments on The more things change, the more they stay the same

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Charles Mackay on April 27, 2006 - 11:02pm

What do you think is the current energy conversion rate in the US? A recent story in my home state of New Jersey indirectly implied that the energy used in shipping and processing the materials needed to make ethanol resulted in less energy - although it was still profitable to make, probably because of government subsidies.

Thanks for your fine comments, as usual.

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LevinK on April 28, 2006 - 12:38pm

Part of the answer is also that some of the energy inputs are also cheaper per BTU than the output.

Current price of ethanol is ~2.50/gallon, which translates into $29.7/mln.BTU.

If for example the ethanol plant uses natural gas for the destilation process it will pay some ~$7/mln.BTU. And if it uses coal, the cost would be only $1-2/mln.BTU. Even if it uses electricity the cost would be quite lower than the output - $14.50/mln.BTU (for $50 per mgawatt-hour).