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99 comments on Peak Oil and The Energy Utilization Chain (EUC)
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This hasn't gotten much attention, but it is in fact happening. The price of DDGs is falling steadily even as the price of corn rises. This is adding to ethanol costs, and is only projected to get worse. I think we will get to the point that excess DDGs are burned for fuel.
I think one of the points I was trying to make was that if the DDGS did not exist, cattle would be fed something else, something that would have its own energy content. So, the energy credit (if there really is one) should really be the energy content of the most likely alternative feed that the DDGS displaces, not the DDGS itself. This may or may not be the correct way of looking at it, but I've had a gut feel from the very start that something was a little dodgy about the DDGS credit.
I know very little about agriculture, but is it not also true that cattle can only tolerate a certain percentage of DDGS in their feed mix without suffering adverse effects? If so, then it would not be too hard to picture the market for DDGS getting saturated pretty quickly as more and more ethanol plants come on line.
You are probably right that at some point a large fraction of the DDGS will be burned just to recover some heat value from an otherwise next to worthless material.
The other big change coming is that companies will start extracting more of the corn oil from the DDG product (already happening at a few plants). This is positive in several ways. From what I understand, less energy is than required to dry the DDG, we pick up another high-value product stream (corn oil -- think biodiesel) and the resulting DDG product can be used for the pork and poultry industries, which so far have been unable to use much DDG at all.
Although there will be short term market issues due to the extremely rapid growth of the ethanol business, we will run out of land to grow corn long, long before we run out of a way to utilize the by-product.
I saw on a recent ag report that nationwide, cattle are not finishing out as well this past year. Do you have any theories about this? They mentioned drought conditions being one, and many people are jumping to the conclusion that its the DDG being fed. What are your thoughts on this?
There is raging debate in the industry about how much feeding DDG is responsible for what has been a significant decline in cattle grading over the last couple of years.
From our personal experience, I think DDG is a significant culprit, and we are investigating how to address the issue.
Very interesting.
We feed cattle, so use a lot of DDG's. Earlier this summer we were contracted DDG from our local ethanol plant for $88 per ton, corn was about $2.00 a bushel at that time. Corn is now worth $3.50 and DDG has shot up as well. Trying to buy some now would cost about $130 per ton. About a 50% price rise. National market reports show this same thing happening across the country.
As long as corn to ethanol is heavily subsidized, DDG's will seldom be burned for fuel as they are too valuable as a feed ingredient.
In the big picture, what will probably happen over the next few years is that corn planting will rise substantially, soybean planting will decline. Historically, the livestock industry has gotten it's protien from soybeans (meal) -- much of that demand will now be filled by DDG.
Here is some Christmas cattle trivia: The MROI (Milk return on Energy invested) is about 5:1
Absolutely is. I have seen several news reports on this. Here is a blurb from Ethanol Producer magazine:
http://www.ethanolproducer.com/article.jsp?article_id=2338
I also have a reference around here from November that I will try to track down. Finally, I have seen an analysis that predicts that the DDGs market will completely saturate pretty soon as ethanol production continues to ramp up.
DDGS prices will continue to decline as expanding ethanol production expands available supplies.
From a USDA report:
The value of byproduct credits declined from 30 cents per gallon in 2003 and 2004 to about 22 cents per gallon in 2005.
That's from a PDF. You can see the exerpts here:
http://www.futurepundit.com/mt/mt-altcomments.cgi?entry_id=3663
Scroll down to comments by "Randall Parker."
Regards
My opinion is that MTBE substitution is the current driver of ethanol production in the US, not use as an alternative fuel. The economics are just not there.
Regards and thanks for your frequent and useful comments.
Nevertheless, I firmly believe that biodiesel, ethanol, CTL, GTL, tar sands and in general all the "whatever-to-liquids" programs are driven by the quest to keep the whole post-petroleum era looking and acting as much as possible like the Oil Era. There is too much capital invested in the whole liquid fuels regime for it to change overnight. The internal combustion engine drives our planetary economy and society.
Yet the quest is ultimately destined to fail, for reasons analyzed extremely well in this site (EROEI + GHG). Oh, they may very well serve as stopgap measures as we (if we) transition to a purely Electric Era, but not much more beyond that. The sooner we realize that the Sun is the only source of permanent energy, the better our future.
Regards
http://www.verasun.com/fuel/biodiesel.htm
Can't disagree on your observation regarding the sun, but is it possible that biomass done right provides a nice "battery" in that equation?
The key is to get started now.
Look at this weekly report issues by USDA -- DDG currently $110 to $130 per ton.. http://www.ams.usda.gov mnreports/SJ_GR225.txt
Not sure where everything will shake out, but DDG is certianly not cheaper. There will be serious mis-location issues over the next couple of years, made worse with high cost of transportation, but the feed market is pretty efficent. DDG will be priced at its feed value. Main value of DDG is it's protien, and the US/north American/global protien market to date is very large.
Oh, and really appreciate the cow picture.. drives home the point that under skyrocketing energy costs, we will all eat less meat!! and who knows, even though I feed cattle, we may be more healthy as a nation by cutting meat consumption :(
http://www.ams.usda.gov/mnreports/SJ_GR225.txt
Thks again.
You are a scholar and a gentleman!
Soybeans are 75% soybean meal (which itself is about 48% protien), so with the coming flood of DDG's, we will be awash in protien and I really believe that soybean acerage will drop significantly under current policy.
One interesting side note, in our part of the world (northeast Kansas), we can grow about as much bio-diesel an acre from a wheat-doublecrop sunflower program as a single crop of soybeans, and have a full "food" crop to harvest that year as well.
Bunge North America, the North American operating arm of Bunge Limited (NYSE: BG), announced that it is expanding the crush capacity of its soybean processing plant in Council Bluffs, Iowa, by more than 11 million bushels per year. When the expansion is complete by harvest 2008, the facility will have an annual crush capacity of nearly 77 million bushels, the largest in the United States.
Wow, now just get yourself and your neighbors to run your tractors on straight sunflower oil and at least we'll know we won't starve. I'm only half joking.
That would be a waste.
http://www.communitysolution.org/04conf/af1.html
So the dry distillers' grains is a pre-emergent herbicide, in other words it stops weed seeds from sprouting. As soon as they sprout, they die. That's because what I've done by putting this stuff in the soil is I've fed seed-eating fungi and bacteria. There's a population explosion, when the weed seeds sprout, that exploding biology eats the little roots of the weed seeds. It's really a tricky little system, really fun. So the farmer doesn't need to buy Round-Up anymore, because he's got it built in, and he doesn't need to buy the GMO corn.Examine what others are doing in the field, look into the patent claims. Look at the comments of farmers who are using the method.
Taking the DDG and making a biochar to make a terra preta would also be a fine plan. But burning for energy? Using the waste for betting the food supply change is a FAR better plan.
If you use transplants, they can survive some fungal activity, in fact to the point were black mold can grow right up the plant, if you go overboard on the spent-grain fungal activity.