Wed Feb 6th, 2008 at 08:38:24 AM EST
This is from the other side of the Atlantic, obviously, but so are many of the ET readers. And food and energy..also worldwide concerns..
Of late there has been quite a lot written (for example, in The Oil Drum - some lengthy reading here) about the conversion of starch and sugars into Ethanol (EtOH) and plant oils into biodiesel (FAEE - fatty acid ethyl esters and FAMEs - fatty acid methyl esters). Well, there is room for improvement with respect to the manufacture of these materials, no doubt. It would be nice if close to zero fossil fuel inputs went into the conversion of foods into fuels, and also close to zero fossil fuel inputs in the production of these foods. And a lot of the hype that EtOH will replace imported gasoline should be examined, and then the notion that EtOH production will keep gasoline prices low could be done away with. Not a popular thing to say, but there is only one way that gasoline and oil derived diesel prices will drop - and that is with lowered demand. Better yet, just don't support Osama Been Forgotten's supporters by sending them money in return for their oil, and/or oil derived hydrocarbons and petrochemicals, such as urea. But I digress.
Diary rescue by Migeru
[editor's note, by Migeru] fold inserted.
As we all know, oil prices are on the rise, and so are natural gas (Ngas) prices. We have consumed most of the easy to get oil in the Western Hemisphere, and a large fraction of the Ngas of North America. In order to keep the same supply rate of Ngas, we need to keep drilling more and more wells, since well productivity is definitely on the decline. And importing LNG from North Africa and the Middle East just puts us into competition for this with countries that have a more stable currency and real money in their bank accounts, like Europe, Japan, India and China. Thus, making the energy we need is going to be really important as time moves along.
Furthermore, using this energy efficiently - well who can argue with that. The U.S. average fuel efficiency for cars is a pathetic 20 mpg or so - we did better with the Model T. There is room for lots of improvement on that aspect. For example, doubling fuel efficiency to that of Europe (which now has a higher standard of living than the U.S.) would allow us to drop gasoline consumption from 9.6 million barrels/day to 4.8 mbpd. the same can be done by moving cargo hauled long distance from truck to train. And freight trains are relatively easy to electrify...since all existing freight locomotives are diesel electrics anyway...just wire up the lines and quit using the diesel, at least so much (it's a nice back-up option, though).
Actually, when we start getting efficient with fuels...that's when renewable fuels start to make the greatest impact. Dropping the hydrocarbon portion of the gasoline from 9.2 mbpd to 4.4 mbpd ups the EtOH content from 4.1% to 8.3%. Increasing efficiency by another factor of 2 (suburbs --> cities, Plug In Hybrid cars @ 100 mpg average efficiency (where electricity powers the initial 20 miles or so traveled/trip), telecommuting, etc) would drop gasoline consumption to 2.4 mppd. That same 400,000 bpd of EtOH could provide 20% of the nation's transportation fuel.
But, gasoline will probably still be a factor in the cost of this fuel mix, even if a small amount of crude oil derived material is actually used in the fuel mix. In fact, crude oil will probably set the price of biofuels for some time. And biofuels won't be able to have much effect on liquid fuel prices, due to the way in which items like fuel are priced.
Anyway, I went and bought some baked corn chips yesterday in preparation for Taco Tuesday - 7 oz for $2.49, or roughly $5.69/lb for essentially corn! That is roughly 56 times the price of corn...even if the corn component cost 20 c/lb (milling, transport, etc)...that is not where the expense is occurring. The next time somebody claims that corn price rises due to converting the starch in corn to EtOH, it's going to be tough to not hurl on the spot. So, there is some needed balance required in the EtOH story, but I'm not seeing it much these days.
So many people must assume that corn is just grown at cost....well, it has been for several years, and that was not a pretty picture, either. And it did not help with the corn chips price, either. Now that prices are getting to the point where profitable farming can be considered....comes the call to feed the poor of the world. But who will buy their food? Odds are, they don't want to buy our stuff, anyway, they would rather grow their own, or buy locally grown material. Will anybody sign a long term deal with U.S. farmers to cover costs and provide for a decent standard of living in return for food...not likely. Besides, if prices are kept dirt cheap, then expenses need to be that way too, ranging from fertilizer to the existence of small towns in farming areas. Example 1 - fertilizer prices are once again on the march...
$505/ton in Tampa in bulk on 1-17-08. Oh well, so much for $150/ton NH3.....
But, if we go back to EtOH for a bit...taking the carbs out of corn and making fuel from them instead of making the starch into sugar to feed our young, future diabetics via sugar water drinks...that does not make much sense. Same for feeding a populace suffering from an epidemic of obesity.."pass the carb's please".....or feeding grains and beans to cows that just stand around in feed lots and who have little need for carb's except to grow fat....or toot it out of both ends. Animal proteins don't come from plant carbohydrates...is that too complicated? A very convenient way to stretch the food supply is to eat fewer quantities of animals who are grown on harvested grain...that too could help lessen the obesity epidemic.
There are lots of ways to start making EtOH in ways that minimize fossil fuel usage...for example, the operation at the Corn Plus facility, where the thin stillage is used to provide all steam for the facility, and this in turn drops the need for 1/3 of the energy used to dry the WDG into DDG. And obviously, taking the fossil fuel input out of fertilizer and out of the tractor fuels would be very helpful, too. But, this does not come at zero price, and even if it is not much more than what is currently the prevailing energy/fertilizer prices, it is a bit more..that's all that matters, and external costs be damned. Similarly, making the capital improvements to use less fossil fuels (the CornPlus boiler cost ~$15 million, about 7 times what a normal Ngas fired arrangement would be) would not work unless Ngas prices are high enough to justify this expense...
Anyway, the Food Fight is on. Beware the true believers, who think that food should be grown at cost, and dissemenated around the world at minimal price, so we can bankrupt the third and forth world farmers while we bankrupt our own. Or so we can trade raw materials like grains in return for the manufactured items that could also be "home-grown". And beware those political types who think that home grown fuel can provide sufficient mass quantities of cheap EtOH to replace the 6+ mbpd of gasoline from imported crude needed to keep the SUckV's of suburbia motoring at record rates in a spendthrift mode. Or who claim that my $2.49 x 7 oz bag of taco ingredient is so expensive because EtOH manufacture from corn has raised the price of bulk corn towards $5.60/bshl (10 c/lb), from its previous level of 4 to 7 c/lb.