The more things change, the more they stay the same
Posted by Heading Out on April 28, 2006 - 10:32am
Topic: Miscellaneous
Tags: ethanol, hydrogen, peak oil [list all tags]
Continues below the fold...
Well, we're back to being a five-day wonder. People are again shocked that prices have gone up. I wonder if this is now going to be an annual ritual, as we progress from winter to summer, and corporate profits are announced. Unfortunately, as the press release from my colleagues notes, the reason for the price increase is not amenable to the solutions that are now being thrown around. In which regard, it was interesting to hear the spokeslady from the API actually mention peak oil, in her remarks on the News Hour tonight.
It is difficult to educate the public at this time. They want something done in a circumstance where there is not that much, in the short term, that will make the situation much better and some things that are coming (such as the Hurricane season) which may likely make it worse. The tried and true formulae (the "give them cake" suggestions from both parties) only work when this is a short-term problem. When it becomes, as it increasingly is, an ongoing situation then the paradigm must change. (As was commented earlier, illustratively, we need to transition from paying the winter fuel bill of the disadvantaged to paying for insulation of their houses).
But to change the attitudes you must first have the public, and their servants, educated. We are blessed that a small fraction already are, but as yet the rest are still in what Prof G called it last year, the river phase, or Denial (took me a minute!). As I noted the words peak oil are starting to get more attention, but the true implications are yet to sink in.
Yes, we have the new encouragement for long-term solutions such as ethanol, but there we need to look at the numbers. Which are, as the President noted:
Last year, America used a record 4 billion gallons of ethanol. There are now 97 ethanol refineries in our country, and nine of those are expanding and 35 more are under construction. The ethanol industry is on the move, and America is better off for it.However, if we use 20 million barrels of oil a day, and the 4 billion gallons is less than 100 million barrels a year, or 260,000 barrels of ethanol a day - about 1.3% of our gas needs, and thus to get to 5% we would need to treble production - which requires a fair amount more corn. In other parts of the world, which use sugar instead, it is already taking prices to 25-year highs with half of Brazil's sugar crop now going to ethanol. Business week has just reviewed the history of ethanol production and concludes:Many of these refineries are in the Midwest -- the Midwest because that is where the source -- you know, the feed stock for ethanol comes from.
That happens to be corn.
But what's really interesting, there are new plants springing up in unexpected areas, like the Central Valley of California, or Arizona, or, of course, in the sugar fields of Hawaii. After all, sugar can be used for ethanol. As a matter of fact, it's a very efficient feedstock for ethanol.
The recent price spikes for gasoline have forcibly reminded the people of Chicago and Wisconsin of what happened when ethanol was forced on them during the summer of 2000. Moreover, the promise of energy independence that Brazil has explored through ethanol is widely misunderstood. Recently a Brazilian official, commenting on our third and most recent attempted conversion to ethanol, said that when Brazil tried using agricultural crops for ethanol, it achieved only a 1:1.20 energy conversion rate, too low to be worth the effort.FINAL BOW? On the other hand, ethanol from sugar cane delivered 1:8 energy conversion, which met the national mandate. Unfortunately for us, sugar cane isn't a viable crop in the climate of our nation's heartland. But the part of Brazil's quest for energy independence that the media usually overlooks is that ethanol wasn't the only fuel source the country was working on: Its other, more important, thrust was to find more oil. To that end, last week Brazil's P50 offshore oil platform was turned on. Its anticipated daily output is high enough to make Brazil totally oil independent.
More smog, infinitely worse gas mileage, huge problems in distribution, and skyrocketing prices for gasoline. Maybe now that we're witnessing the third act in America's ethanol play, the upcoming epilogue will close this show forever. Even great advertising works only if the product does.
Hydrogen, even if developed as fast as possible, is going to take about 20 years, if it will work at the scale needed even then. (And there are significant doubts, since it has to be created as a secondary use of energy). Other than that we don't have much inspirational creativity as far as new programs go, and those that exist are still getting done away with. I learned in the last Energy Crisis that to expect energy companies to invest in new ideas when they are getting buried in money using the old ones is not really fruitful. I suspect, adverts in the paper not withstanding that we are in the same condition again today.
Well, wonder what is going to take it off the front pages this year. Might as well get out the dust cloths and mothball this until next April, when we can bring it out again. After all it's about time for Michael Lynch to start appearing on the talk shows again, together with Saint Daniel de Yergin.
Speaking of agenda setting power: How is it that Lynch & Yergin seem to effortlessly get major MSM airtime, yet Westexas & Khebab cannot get a simple letter published, and no mainstream reporter is knocking at the TOD HQ door asking to interview our vaunted TOD topdog data freaks?
It is pissing me off because the National Agenda is keeping the unwashed masses from knowing the truth, and the MSM is stifling our Peakoil Outreach efforts. Hell, we get some useless talking head on TV acting like an expert for 15 minutes, yet anything Matt Simmons says the MSM cuts down to a five second soundbite!
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?
Lynch, Yergin, and the USGS are both the acknowledged "experts" in the real world and those preaching a message that addicts want to hear: "Lots of oil, if those other people were willing to produce it." The addicts hear, "no shortage, other people withholding supply to increase profit." You do see that this is the message people are willing to believe, right?
The PO message will be considered when the "experts" are discredited. They were "proven right" the last time around, when oil prices dropped in the 80s. We know what really happened, but the addicts prefer to believe that Reagan frightened OPEC into giving up.
Is Yergin to modern oil, as Woodward is to modern scandals?
Lynch attacked, saying, "Julian and a lot of the people making these arguments are not that familiar with the technical terms in the oil industry."
Darley was far too polite, saying, "So I'm afraid I disagree with both those statements on factual grounds."
Someone posted that Kerry lost the "meta-debate" because he let Bush's people Swift-boat him without fighting back. I listen to these Peak Oil debates, and the only one willing to mix it up with these guys seems to be Kunstler, who (no offense) seems to have the least scientific background.
This is a good thing. Did you ever consider the ramifications if Canada, Mexico, and other major oil exporters to the US suddenly stopped selling us oil? Becareful for what you wish for.
This will inevitably happen if you give credence to Westexas & Khebab's theory as I do-- it is much better for the US to be proactively prepared for this situation by biosolar Powerup. Detritus entropy dictates that even Canada, Mexico, etc will eventually run out too, but remember the Sun will keep shining for the next few billion years. Declaring war on Mexico or Canada will be entirely counter-productive because that will set off a massive internal civil war.
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?
>This will inevitably happen if you give credence to Westexas & Khebab's theory as I do-- it is much better for the US to be proactively prepared for this situation by biosolar Powerup
Sorry, I have to disagree. As soon as the US gov't publically acknowledges Peak Oil virtually all exporting nations will nationalize energy access and virtually stop exporting in order to make their own preparations. Since US domestic production in nearing heavy depletion there would be insufficient resources to make that transistion. Much of the industrialized world would also endure the same suffering. Undoubtedly chaos and perhaps even a collapse of the United states is likely.
The US faced a near crisis during the Oil Embargo when the US only needed to import about 7% of its oil. Today, the US imports about 60% of its oil. We also need to consider Natural Gas imports from Canada, which was not a factor in the 1970's.
The best policy the US can proceed which is to begin a large scale domestic energy development program under the umbrella of "National Security" and "Geopolitical Instablity" as a reason to motivate the US public to ween its self off foriegn oil imports. The rest of the industrialized world could also make prepations without fear of being suddenly cutoff. Unfortunately it may be too late.
Recently, I been concerned that we are already past peak energy production. Increasing we can see that the oil production is increasing only from non-conventional sources of oil (Tar Sands & GTL) and Heavy Crude, which has a lower EROI. If we consider the amount of energy extracted per investment in infrastructure and processing, I believe we might see a decline in over all energy production.
A barrel of Light sweet crude delivers more useable energy to the consumer than a barrel of heavy crude. Even if global production continues to rise, if we include the refining and extraction losses, its quite possible global energy production is already in decline.
> the Sun will keep shining for the next few billion years.
The problem is that the industrial world consumes approximately 400 years of stored sunshine every day (from fossil fuels). In order to reach a sustainable energy consumption the entire globe would need to reduce its energy use by a factor of over a thousand.
In my humble opinion the best course of action is for people to assume responsiblity for their own welfare instead of waiting for gov't to take action. Peak Oil isn't just a gov't problem, it is your problem too. I believe it would be easier to convince the entire world abandon all monotheistic religions and begin worshiping pagan gods again, than it would to convince the population to abandon their energy consumption and lifestyles forever.
Hey Super G, any idea on all of the strange characters in the "classic" posts?
Great work HO as always.
Thanks for your fine comments, as usual.
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).
The US Dept of Energy's "Alternative Fuels Data Centre" has a list of E85 Vehicles.
In regard to running it in an engine, the usual mix is in the 5 - 15% range, in which case it is already in a lot of the gasoline that is bought at the pump. It is only when it is put into cars at the 85 - 100% level that the engine needs to be modified, and while one can buy cars that can run either on this or regular gasoline, there is not that much call for them yet, since folks still prefer to drink their moonshine, rather than pour it in the tank.
I wonder about what seems to me to be "intentional ignorance" which is sustained by media, the political establishment, and corporate culture.
Even witt denial still dominant, are we at a cultural tipping point where suddenly "peak oil" gets mentioned as a real issue to deal with here and now -- along with global climate change?
I do note bits of comprehension as I talk with people from day to day. This is encouraging.
And yet the local political establishment where I live is still focused on how to raise public money to pay half-billion-dollars each for three sports stadiums: one for the MN Twins, one for the Vikings, and one for the U of MN football team.
I ache for public discourse to focus on strategies for addressing peak oil and global climate change, but there is still this huge disconnect between public discourse and reality.
Perhaps if we get things like the TOD editorial out -- and the Peak Oil Poster and such -- we can bring aboput the much-needed tipping point all the sooner.
Reality-based public discourse -- what a wonderful dream!
(BTW -- I did link to the TOd editorial in a local Minneapolis e-democracy discussion list, and e-mailed the link to our Mayor and some state legislators as well.)
And BTW - what is up with natural gas? 11-month lows? How much lower can it go?
I do expect a scorching summer leading into another mellow winter(global warming). Put it this way -- I'm hovering and waiting for a few more weeks of bearish inventory data, and I'd be surprised to see anything below $6.000 at any point from now on.
" Domestication was also a radical change in the distribution of wealth within the plant world. Plants can spend their solar income in several ways. The dominant and prudent strategy is to allocate most of it to building roots, stem, bark--a conservative portfolio of investments that allows the plant to better gather energy and survive the downturn years. Further, by living in diverse stands (a given chunk of native prairie contains maybe 200 species of plants), these perennials provide services for one another, such as retaining water, protecting one another from wind, and fixing free nitrogen from the air to use as fertilizer. Diversity allows a system to "sponsor its own fertility," to use visionary agronomist Wes Jackson's phrase. This is the plant world's norm.
There is a very narrow group of annuals, however, that grow in patches of a single species and store almost all of their income as seed, a tight bundle of carbohydrates easily exploited by seed eaters such as ourselves. Under normal circumstances, this eggs-in-one-basket strategy is a dumb idea for a plant. But not during catastrophes such as floods, fires, and volcanic eruptions. Such catastrophes strip established plant communities and create opportunities for wind-scattered entrepreneurial seed bearers. It is no accident that no matter where agriculture sprouted on the globe, it always happened near rivers. You might assume, as many have, that this is because the plants needed the water or nutrients. Mostly this is not true. They needed the power of flooding, which scoured landscapes and stripped out competitors. Nor is it an accident, I think, that agriculture arose independently and simultaneously around the globe just as the last ice age ended, a time of enormous upheaval when glacial melt let loose sea-size lakes to create tidal waves of erosion. It was a time of catastrophe.
Corn, rice, and wheat are especially adapted to catastrophe. It is their niche. In the natural scheme of things, a catastrophe would create a blank slate, bare soil, that was good for them. Then, under normal circumstances, succession would quickly close that niche. The annuals would colonize. Their roots would stabilize the soil, accumulate organic matter, provide cover. Eventually the catastrophic niche would close. Farming is the process of ripping that niche open again and again. It is an annual artificial catastrophe, and it requires the equivalent of three or four tons of TNT per acre for a modern American farm. Iowa's fields require the energy of 4,000 Nagasaki bombs every year.
Iowa is almost all fields now. Little prairie remains, and if you can find what Iowans call a "postage stamp" remnant of some, it most likely will abut a cornfield. This allows an observation. Walk from the prairie to the field, and you probably will step down about six feet, as if the land had been stolen from beneath you. Settlers' accounts of the prairie conquest mention a sound, a series of pops, like pistol shots, the sound of stout grass roots breaking before a moldboard plow. A robbery was in progress.
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Focusing on pesticide pollution, though, misses the worst of the pollutants. Forget the polysyllabic organics. It is nitrogen--the wellspring of fertility relied upon by every Eden-obsessed backyard gardener and suburban groundskeeper--that we should fear most.
When farmers dump nitrogen on a crop, much is wasted. It runs into the water and soil, where it either reacts chemically with its surroundings to form new compounds or flows off to fertilize something else, somewhere else.
That chemical reaction, called acidification, is noxious and contributes significantly to acid rain. One of the compounds produced by acidification is nitrous oxide, which aggravates the greenhouse effect. Green growing things normally offset global warming by sucking up carbon dioxide, but nitrogen on farm fields plus methane from decomposing vegetation make every farmed acre, like every acre of Los Angeles freeway, a net contributor to global warming. Fertilization is equally worrisome. Rainfall and irrigation water inevitably washes the nitrogen from fields to creeks and streams, which flows into rivers, which floods into the ocean. This explains why the Mississippi River, which drains the nation's Corn Belt, is an environmental catastrophe. The nitrogen fertilizes artificially large blooms of algae that in growing suck all the oxygen from the water, a condition biologists call anoxia, which means "oxygen-depleted." Here there's no need to calculate long-term effects, because life in such places has no long term: everything dies immediately. The Mississippi River's heavily fertilized effluvia has created a dead zone in the Gulf of Mexico the size of New Jersey. "
Hydrogen, in principle, might offer energy for transportation without CO2 production. As Kunstler discusses, there are a lot of problems other than strict scale in using hydrogen, however produced.
If so, then it would seem that no-one in the distribution line is making more money now than they were 3 years ago.
At the beginning of 2003, crude oil was about $30/barrel, for it to be up 400% percent would make it $150/barrel - clearly not the case.
Sorry, I just re-read my original comment and I said that the price had risen by almost 400%. That is, as you say, incorrect. I meant to say that the price now is almost 400% (almost four times) the April 2003 price (just eye-balling the graph.
Similarily, the price of Unleaded has indeed only risen by approx 100% or is now twice (200% of) it's April 2003 price.
Anyway, my point was that the fluctuations in the price of crude do not directly match the changes in price for unleaded, percent for percent. Which appears to be related to the fact that the cost of crude only accounts for 50-odd percent of the cost of unleaded.
To give you a preview, this is what my model suggests for what gasoline prices should be at different crude levels. Remember there is a lot of play in these numbers. So I would allow for as much as a +/-25% range around what I list here.
$120 crude equates to $3.67 gasoline
$150 - $4.36
$200 - $5.52
These are all in 2006 Dollars and "market factors", so if it takes awhile to reach these levels of crude prices, other dynamics may change the equation and therefore the price.
This is a huge perception problem (at least here in the corn belt where I live). The public is generally led to believe that ethanol will someday seamlessly replace gasoline, so they think there is no need to adjust to a lower energy lifestyle. The myth is that we can just keep burning gasoline the way we always have, because soon we'll have unlimited ethanol to replace it.
First off - ethanol is pennies a glass when to comes to the price of gasoline.
Second - ethanol fermented from corn is an entirely different animal than that of cellulosic ethanol derived from biomass.
Third - celluslosic ethanol is already in production both north and south of the 49th parallel.
Fourth - the DOE has confirmed that 1 bilion tons of biomass can be produced in the U.S. p/a algae notwithstanding.
Fifth - Chrylser, Toyota, GM and Ford have all committed to building flex-fuel vehicles in large quantities by 08'.
And for those of you getting their shit in a not over Cali...
Pacific Ethanol is opening 4 ethanol plants primarily focused on the W.C.
So chill Team Defcon! CHILL!
I wonder if you could quote some production numbers and who is actually producing cellulosic ethanol?? For everything I have read, many problem still exist concerning cellulosic ethanol and that massive production is still out of the equation..
By the way, Business Week has an interview with T. Boone Pickens, and there are links to some alt fuels article in Popular Mechanics, etc here
http://abnormalreturns.wordpress.com/2006/04/27/pickens-and-peak-oil/
I've been reading the energyresources listserve since y2000. Two or three years ago Milton Maciel from Brazil started posting regular erudite comments regarding Brazil's ethanol development that began to systematically call in question list readers' common assumption that Pimental's corn ethanol net energy results also would apply to cane ethanol. Thus far I have found Maciel credible about cane ethanol in Brazil.
Recently he responded to the "Learning From Brazil" article in Mother Jones. His comments are fairly extensive, so I replicated them on my website for your consideration.
http://www.eia.doe.gov/neic/quickfacts/quickoil.html
So, Ethanol is already providing more than twice the percentage that you calculated... it doesn't look like that 5% will be much of a problem.
By the way the Business week article you cite was a commentary from a Dallas radio talk-show host.
"But the renewable fuels mandate coupled with the phase-out of MTBE and state fuel requirements is expected to produce a need for about 395,000 barrels of ethanol a day, or 6.1 billion gallons in 2006, according to the Energy Department."
http://www.marketwatch.com/News/Story/Story.aspx?guid=%7BBE931661-B3CF-48E3-9936-095F66C70291%7D& ;siteid=google
If we really do produce this much ethanol this year then ethanol production will be about 4.2% of gasoline producion on a gallon for gallon basis. 5% is starting to sound really easy!
As to whether 1 gallon of ethanol provides the same utility as 1 gallon of gasoline that is a whole other debate.