More thoughts on ethanol after the State of the Union...what will farmers do, and have they read the research?
Posted by Heading Out on January 29, 2007 - 11:45am
Topic: Alternative energy
Tags: cellulosic ethanol, corn production, ethanol, Food and Policy Research Institute, research [list all tags]
In the State of the Union message this past week, the President gave, as part of his solution to the increasing problems of gasoline supply, an increasing emphasis on ethanol. There has been some considerable debate about whether this will work, but I thought I would follow a couple of different thoughts today. The first relates to what the farmers might be doing in order to benefit from this coming bonanza, and the second is to see how much research is actually being done.
Looking around for some information (thanks to Google) I came across the Food and Policy Research Institute which is a joint program between the Universities of Iowa and Missouri. It makes projections each year on the future development of the markets, and since it is located in the Midwest, it seemed a good starting place to look at what might be going to happen in the corn business. Interestingly in their latest report on ethanol the number that they project for ethanol production is not that different from the President’s (35 billion gallons).
Estimates of the long-run potential for ethanol production can be made by calculating the corn price at which the incentive to expand ethanol production disappears. Under current ethanol tax policy, if the prices of crude oil, natural gas, and distillers grains stay at current levels, then the break-even corn price is $4.05 per bushel. A multi-commodity, multi-country system of integrated commodity models is used to estimate the impacts if we ever get to $4.05 corn. At this price, corn-based ethanol production would reach 31.5 billion gallons per year, or about 20% of projected U.S. fuel consumption in 2015. Supporting this level of production would require 95.6 million acres of corn to be planted. Total corn production would be approximately 15.6 billion bushels, compared to 11.0 billion bushels today. Most of the additional corn acres come from reduced soybean acreage. Wheat markets would adjust to fulfill increased demand for feed wheat.
What I found interesting about that statement (the full report is available as a pdf) was the remark about where the corn would come from. And on the basis that a picture is worth a thousand words, I found this within another pdf presentation , that had some interesting numbers.
What it shows is that the Institute does not see a significant change in the amount of acreage that will be planted, as the following table also shows, through the next few years.
Now what this is going to do to our export market for grain does not likely bode well for those folks down in Mexico worried about the rising price of tortillas , though it may encourage more local production.
The presentation also had a bioconversion chart, that may be useful, so I am including this also.
Now if corn can thus increase the amount of ethanol to close to what the President needs, one presumes that the remaining 10% or so of new production will come from ethanol produced from a cellulosic source. The Government plan for cellulosic research came from a workshop held in 2005, following which DoE published a roadmap for research to meet the goals. Doe has a special Biomass Program . It is interesting to see where the program is investing. There are two efforts at National Labs, one at PNNL , which is the Pacific Northwest National Lab located at Hanford in Washington State. Interestingly one of their projects is with UOP, and I did hear a rumor the other day that UOP were one of the partners in the award from DARPA on the jet fuel from biomass program – we will see.
The other National Lab that gets significant funding is the National Renewable Energy Laboratory , although that program does not look quite as large, it also houses the National BioEnergy Center. Under partnership with the Department of Agriculture there is also a Biomass Research and Development Initiative The projects they finded last year (for a total of $17 million) were:
One thing struck me, going through to try and find this information, and it was that there are not a whole lot of different programs that are easy to find. Now I know that there is some private research going on ( Vinod Khosla springs to mind), but if we are to put some $1.8 billion into this program, one would have thought that there would have been a bit of a stronger research base on which to properly invest to get the needed results in the time available. I guess one will have to wait and see where the money actually gets spent.
Back in August the Government had announced that they will spend $250 million on two BioEnergy Research Centers
U.S. Department of Energy (DOE) Secretary Samuel W. Bodman announced today that DOE will spend $250 million to establish and operate two new Bioenergy Research Centers to accelerate basic research on the development of cellulosic ethanol and other biofuels. The Secretary made the announcement with Congressman Jerry Weller (IL-11th), local officials and biofuels stakeholders during a visit to Channahon, IL. . . . . . . Universities, national laboratories, nonprofit organizations and private firms are eligible to compete for an award to establish and operate a center. Awards, based on evaluation by scientific peer review, will be announced next summer. The centers are expected to begin work in 2008 and will be fully operational by 2009.The centers’ mission will be to conduct systems biology research on microbes and plants, with the goal of harnessing nature’s own powerful mechanisms for producing energy from sunlight. A major focus will be on understanding how to reengineer biological processes for more efficient conversion of plant fiber, or cellulose, into ethanol, a substitute for gasoline.
The only problems I have with this effort is that it concentrates the funding rather than spreading it among a larger number of investigators, thereby limiting the number of fresh ideas that will be developed (one occasionally gets the idea that the federal view on innovation is that it wasn’t invented at MIT or some such place it has little promise), and secondly, given the length of time it is going to take to establish these centers, it is unlikely to have any impact at all on the current production plans.
ED by PG...Don't forget about Engineer Poet's interesting piece on this as well, Sustainability, Energy Independence, and Agricultural Policy.
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Krugman laced into corn for ethanol in NYT editorial today...sorry I don't have a link. He described it as "a really bad idea with bipartisan support"
Ethanol from cellulose has been a sham from the beginning. There is very
little real difference in energy advantage between corn and cellulose. Here's
why-- (I think the paper in Science by Farrell contains the information I am
referring to: _http://rael.berkeley.edu/EBAMM_
(http://rael.berkeley.edu/EBAMM) )
"Ethanol from cellulose has been a sham from the beginning."
Why? Because you say so?
Aside from being wrong, you've also managed to highlight Farrell's work wherein cellulosic ethanol production is advocated for its GHG, petroluem input reduction and positive EROEI values.
Krugman is correct in his analysis but wrong in his conclusions. This is what he said in today’s NYT column (behind a pay wall)
This analysis is flawed. If we are to consider ethanol as a primary fuel, and an even partial replacement for fossil fuels, then we must allow the ethanol production infrastructure to stand on its own spindly straw legs. We must demand self-sufficiency of the fuel, and assume in our calculations corn production and distillery are run on ethanol--not gasoline.
After all, we are looking to ethanol to replace some or all of our petroleum, so we must consider the entire corn-to-ethanol process is fueled by ethanol. Otherwise why use petroleum in a pointless inefficient conversion when the resulting ethanol is less energy dense and would require larger storage than gasoline? So some of the ethanol flowing out the back end of the ethanol plant must be rerouted around to the receiving dock to make more ethanol.
Hence the need for Net Energy calculations. Krugman’s UoM researchers stopped calculating at a very very inopportune moment. This is what they did.
This is the final calculation they neglected.
So 16.7 billions gallons/4 = 4.2 billion gallons.
Thus to restate Krugman's conclusions:
pete
I think it should go like this:
I don't entirely agree with this point either:
We don't demand that other energy systems are self sufficient. No one says a windmill must be be only constructed using energy from wind. There are good reasions why the ethanol should, and eventually probably will, be rerouted around to the receiving dock. Once adequate scale exists, it should be possible to construct farm equipment that runs on hydrous ethanol. In this configuration, engines get nmore output from the same BTUs, EROEI would improve from reduced transportation of fuels, and hydrous ethanol can have water content of 5% or so, reducing energy wasted in distillation.
However, in the meantime, any requirement that ethanol facilities use only ethanol for their fuel input is impractical for reasons that have nothing to do with the theoretical utility of the exercise.
yes we do. If they are to be our primary energy source. We don't bother to make fossil fuels out of fresh vegetables so why make ethanol from coal.
If this is only an energy-conversion scheme as you suggest then why not go straight from coal to gasoline using fischer tropsch synthesis? Why bother to convert diesel to corn and then coal to ethanol? There are so many wasted steps and opportunities for inefficient energy conversion in these schemes.
Theoretically yes we could build them. But then that assumes a positive eroei, which is questioned by very competent scientists. Regardless and practically an 'adequate scale' can never exist. Not if we hope to motor and eat.
Correct. There is no ethanol available and there never will be because these ludicrus schemes will not scale up.
Actually, you are wrong on two counts. No one is claiming that ethanol can or should be our primary energy source and there are a lot of non-oil inputs into finding, producing and refining petroleum products.
The bulk of scientists do seem to claim that ethanol from corn does have a slightly positive energy balance. There is no reason why US corn-based ethanol could not scale to a size adequate to fuel significant portions of its inputs using its outputs.
None of this means that corn-based ethanol isn't a farce at best. The marginal amount of new energy producted is certainly not justified by the environmental damage done in producing it. Further, the plan to produce huge quantities of ethanol distracts from other solutions such as electric vehicles and conservation from higher prices.
I am opposed to the current US corn-based ethanol programs. I am just think that the arguemnt can be better made on these facts and that there is no need to make up new ones.
I've been thinking about dusting off my old 1958 John Deere combine, which can harvest shelled corn, and growing a field to see what kind of return I can get.
If the economy goes into recession and the price drops, I'll just feed the crop to my cattle, who truly love a little corn to supplement their hay.
If you've got a paid-for ranch, and a paid-for combine, it seems like raising some corn could be a pretty good deal.
And, of course, use the corn proceeds to buy some more solar panels and a wood-burning stove.
The focus is on corn but not sugarbeets do you know why? The #'s look better.
Well, then I guess we'll need a sugar-beet subsidy ...
LOL...of course, I missed that.
We have close to that, in a sugar subsidy. With current sugar at .18 cents per lb, and return to etoh around .10 cents, beets have a long way to go. And I imagine the sugar industry will fight sugar to etoh tooth and nail.
No doubt a bunch are wondering that. Where the numbers start crunching is in an operation's soy to corn spread. I've read a few ag notes which suggest switching 20% out of soy into corn. But all also say to lock in your base corn with a contract today, right now, use the soy 20% for spec. today's contract is 4.00.
Especially with gas down, many are wondering if these prices will hold. They've been burned before, often, and aren't sure they want to jump. Today's contract future price looks great, but Sep prices are another matter.
It would be nice, if not done on TOD already, is for RR or someone to post a series of tables depicting the relationship between corn prices, ethanol prices and oil prices. I believe 2.00 gas and $4.50 corn won't fly, but it'd be nice to see the break even spread over a range of oil and corn prices.
I agree that the ethanol focus in public policy is absolutely the wrong thing to do in terms of facing the Peak Oil and Global Warming problems.
The real focus ought to be on conservation, followed by conservation, and then a bit more conservation. Lower the ecological footprint of the average US consumer dramatically. It will happen sooner or later, one way or the other.
After focus on this significant cultural transformation -- ELP -- we can make our next priority to fund more research and implementation of renewables. We should focus on generating electricity from wind and solar and biomass plants, and also should focus a bit on liquid fuels, although I don't see any sustainable way to get liquid fuels.
Somehow the whole energy plan seems tailored to bolster American car companies rather than to make positive changes with regard to energy security.
Energy security includes the sustainability component. Extraction of energy from plants that deplete soil and use massive amounts of water will not be helpful for very long, especially at considerable scale.
The problem seems to be that people love to throw around the word conservation, but much less frequently get into "how".
I think that a uniform global carbon tax, or even oil tax, would spur conservation. A tax in the US would create some conservation, but there could be partial "Jevon's Paradox" related offsets in other countries if the US conservation drove prices down.
Voluntary conservation is a nice idea, along the lines of "let's just be nice to each other". But it is hardly a policy prescription for one of the largest problems facing mankind.
IEEE Spectrum magazine has an article about ethanol.
Loser: Corn-o-copia.
Estimates corn ethanol EROEI to be 1:1 at best. Using coal to distill it will only make enviromental issues worse.
Corn ethanol appears to be a bad idea ecologically and for global warming.
But it will be pursued to maximum effect, because in the end it will be fantastically profitable for a few people.
Consider it this way:
It is like discovering a coal-fed oil well in Illinois.
I guess I approve of the systems biology initiative, but I wonder why straight chemical engineering (gasification, etc) isn't being seriously investigated as well?
Isn't this going after the really difficult path instead of the easier path?
Plants and microbes have their own evolutionarily dominated needs.
I wonder what the btu return would be on just burning the corn kernels for heat in a corn/pellet burner vs the btu return for ethanol. Both energy analysis and economic analysis should look at the return on investment for alternative allocations of resources. Those who support ethanol based on an allegedly positive EROEI neglect to point out what the alternative returns would be both from an economic and energy standpoint. Of course, when you are being subsidized, you only worry about whether or not the subsidy is big enough to render a profit.
There is, of course, the argument that supporting ethano production now with taxpayer's money will lead to bigger real returns in the future. I think that is about the only slim reed available to support this boondoggle.
tstreet,
Here is one part of the equation.
Shelled corn contains about 7-8K btu/pound.
http://www.hearth.com/econtent/index.php/articles/corn1
Burning the corn probably does make more sense from a purely thermodynamic standpoint. However what we are after here is liquid fuel, not just btus. You can't burn corncobs in your Hummer.
You sir, are 100% correct.
Peak Oil is a LTF or liquid transportation fuels crisis -not an energy crisis- ergo the thrust of any mitigation strategy must be focused on transportation fuel production but more specifically, net petroleum reduction applied from within our existing infrastructure.
Yes, but I use far more propane than gas. It makes more sense to burn gasoline in my Prius and corn in a corn burner. If we are going to use corn for its btu content, why not use it where it will do the most good and have the best EROEI? If the concern is that we have a liquid fuel problem, then replacing propane is relevant. For that matter, we also have a potential natural gas problem so the same logic would apply.
"I wonder why straight chemical engineering (gasification, etc) isn't being seriously investigated as well?"
Gasification has been investigated, however, investigations of this sort -irrespective of the alt energy production path addressed- are expensive, time consuming and typically true R&D efforts that may never progress to commercial deployment.
As such, these types of investigations are often government based initiatives that are only as 'serious' as the dollars that support it.
Have you seen Thomas Reed's website?
http://www.woodgas.com/history.htm
I feel that burning woodgas or the gasification route to methanol and dimethyl ether (for diesels) has been neglected or deliberately ignored. Stock objections to the methanol route from the ethanol lobby include:
If gasification technologies received just 10% of what we are paying to subsidize ethanol, we would have a robust and practical silver BB in five years.
Yes, there is indeed a lot of debate as to whether or not methanol should be reconsidered as an alt fuel replacement - DME as well, albeit to a lesser degree.
There are a number of issues surrounding methanol deployment as you point out and that certainly includes the effects of the ethanol lobby, however, the benefits of one fuel over the other are negligible.
One of the more interesting papers that I've read on the subject focused on the methanol/ethanol tug-o-war in Sweden. Ethanol won out (if you could call it that) because of one single element - agricultural surplus.
The main problem with methanol outside of the above then is:
a) the public doesn't know about it
b) there are no federal incentives supporting its usage
c) it is far cheaper to produce methanol from NatGas feedstocks thus, there are no commercial incentives supporting the production of bio-methanol
d) dwindling continental NatGas supplies necessitate a better usage strategy i.e. heat for homes
iogen pdf
The problem with many ethanol processes is the energy requirements for heating. Solar and wind could be used for this, but generally they don't. Corn requires energy inputs for cultivation as well. Some processes also produce large amounts of CO2. I think Iogen is on the right track with fungus and termite guts.
Corn needs lots of nitrogen. Which means more natural gas demand - and seasonal peaks, at that, which may co-incide with winter draw.
It also creates competiton for the resource.
Question is, given the fickleness of goverment policy, will gas rich countries invest in more urea capacity, or consider it too risky?
Fickle politics aside, even the escalating cost may dissuade US farmers from too heavy a focus on corn.
The Oil Drum
In his guest post yesterday ("Ten Fundamental Principles of Net Energy") Cutler Cleveland demonstrated that unless we calculate the energy costs to manufacture a primary energy replacement from dwindling petroleum supplies, then that scheme is merely an inefficient liquid-fuel conversion gimic.
The assumptions of Food and Policy Research Institute outlined above need to be edited for mathematic content. Thus :
So we would need to increase our current corn production six-fold just to supply 20% of projected fuel consumption.
There is no such land on the planet earth. Is this insane or what?
pete
that would be 'gimmick' not 'gimic'
pete
You can edit your posts, as long as no one has replied to them.
Thanks Leanan. So I see it is now too late to go back and fix both.
pete
Another big booboo.
Meant to say “unless we calculate the energy costs to manufacture a primary energy replacement using the primary energy replacement for input instead of dwindling petroleum supplies . . ”
Sorry. In my rush to publish I was not completely diligent I hope this is the end of this :(
pete
From Saturday's Wall Street Journal Online:
All Eyes Are on Corn Prices at ADM
http://online.wsj.com/article/SB116984798458589394.html ($$$)
Which corresponds well with the 4.05 break-even corn price HO quotes above. Because corn is now at or very close to that price.
The dealers don't want the junkies switching from cocaine to heroin.
No... what the $4.05 benchmark tells us is this won't scale up. ADM has cleared the one-time money. Now, too many distilleries are in the game. Maybe we can grow enough corn to drive the per/bushel price down... or maybe we will have a drought in Kansas.
What has to happen is simple: the news media has no choice but to investigate ethanol and report honestly. Pretending "surprise" or feigning ignorance at the boondoggle next year won't make circulation numbers rise. MSM's credibility is on the line if this goes much further.
The WSJ coverage has indeed been negative lately. But it's not new. Barrons ran a very negative piece many months ago.
Another piece today does not pull punches:
Alternative-Fuels Push May Inspire Some Better Bets
http://online.wsj.com/article/SB117003284887090721.html?mod=DEN
($$$)
A couple of days ago they ran a piece called:
Very, Very Big Corn
which ended with:
Robert Rapier could have written it!!
(for the record, I'm not claiming he's actually a lobbyist!! Don't sue me, RR!)
Some earlier quotations in the Big Corn piece:
And I think I'll stop there to avoid further abusing copyright.
It's not just the WSJ that is questioning this push. Many on TOD have noted the growing opposition by our export nations, ie Mexico and tortillas. Last fall livestock producers hemmed and bitched, but really didn't want to come out to soon on anything which increased farm prices. They might get serious if this continues too long and high, or if passed through higher meat prices decrease sales.
Note this commen