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By Robert Rapier on Aug 9, 2009 with no responses

Answering Reader Questions 2009: Part 4

This marks the final installment of answers to questions recently submitted by readers. This final installment covers the impact of E10 on fuel efficiency, my general optimism (or lack thereof), algal fuel, thermodynamics and energy limitations, Accoya, and litigation. Once again, thanks to the readers who submitted questions, and thanks to those who helped answer them. Without the help I received, this might have been a 10-part series.

Here are the links to the previous installments:

Part 1 – Covered plasma gasification, natural gas projections, free energy, promising alternative energy technologies, and GTL

Part 2 – Covered coal-to-liquids, technology hype, green gasoline, refining improvements, allocation of money toward renewables, electricity consumption, the Automotive X Prize, Big Oil, cellulosic ethanol, and Exxon’s recent algae announcement

Part 3 – Covered advice to engineering students and some books I recommend

The Questions

Wendell Mercantile wrote: The average fuel economy in Minnesota, which mandates E10, was 11% worse than in Wisconsin where drivers are allowed to choose. Minnesota drivers actually went fewer miles, while burning more fuel to do it. Answer

Melanie wrote: Reading over your last Q&A session, you seemed pretty optimistic. Have the events over the course of the last 2 years left you with the same amount of optimism or more/less? Answer

Mike wrote: I know your stance towards algae biofuel companies, but I want to bring a company to your attention called PetroAlgae. (I couldn’t find a reference to them on your blog.) I think they’re pursing a very nice model of licensing instead of building and also combining food with fuel production. They are claiming that the proceeds from the proteins should almost cover the costs of the whole process. With your expertise (and maybe knowledge about their processes), could you say something about the feasibility of those claims? Answer

Evan asked: 1 How can a nation/person “create” more energy/matter, if they do not take it from another nation/person?

2 Will renewable energy be able to account for the fundamental law of conservation of energy/mass? Economically?

3 If the US is the least efficient user of highly demanded fossil energy, why is its currency(time) worth so much? Do Americans just work too much?

4 Will we see currency exchange rate changes, which are weighted more upon per capita (person) energy efficiency? Answer

James Clary asked: What do you think about the economist article about hardening soft wood?

How to toughen up softwood: A hard act to follow Answer

takchess asked: Q: Do you envision that there will be a lot of IP lawsuit once cleantech is mainstream? Do you think this will be or is a disincentive for investment in this area? Answer

The Answers

Answer

This one was debated at length in the comments following the question thread, but I just wanted to add that I have posted a guest essay on this topic before: Wisconsin Tops Minnesota. It was written by Gary Dikkers.

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That’s a good question. I suppose in general I am more optimistic over the short term, primarily because I saw a relatively fast response to high oil prices. People did cut back on consumption, which was encouraging. The downside is that we are still dealing with fallout from those high oil prices. Not that I have ever been someone who could entertain the thought of a multi-billion person die-off due to peak oil, but I feel better about the overall prospects for humanity. I don’t feel as optimistic about the prospects for the economy, though. I think we are approaching The Long Recession (and may have entered it). I have never seen such a poor job market before. This is going to be extremely tough for a lot of people who have gotten used to a certain standard of living.

I am seeing this first hand in the engineering ranks right now. Since I started my career, demand for engineers has always exceeded supply. Presently, that is not the case (as I am finding because I am still trying to place some engineers that we recently laid off). The Wall Street Journal just reported that 50% of this year’s college graduates do not have jobs. If the job market is to improve, we have to have a recovery. If recovery causes demand for oil to increase, prices are going to climb and the recovery may stall. Wash, rinse, repeat.

I think the way we live is going to change. That’s not necessarily pessimism, because the way we live has to change. I don’t think many people would suggest that our current consumption (and not just of oil) is sustainable. The pessimistic side of me says that the way we live will change because that change will be forced upon us in unpleasant ways (e.g., people simply no longer able to maintain their standard of living), instead of governments making wise policy moves to prepare us for a future in which cheap energy is no longer plentiful.

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I have heard of PetroAlgae, and just spent a bit of time on their website. Let me first say that I think upwards of 90% of the bioalgae companies out there are being highly irresponsible with their investors. The technology isn’t close to being capable of producing cost-competitive fuel, and we have companies grossly over-promising (or even committing outright fraud).

On the other hand, I do believe that algae can be a niche solution. The problem is that it is being pedaled as a scalable solution, and therefore companies are popping up all over the place to take investors money. Most will inevitably declare bankruptcy after a few years.

But let’s talk about the niches. In my opinion there are a couple of ways algae could work. If it is to be truly scalable so that it can be a big contributor to our fuel supplies, I only see one obvious path. Algae must be developed that can excrete oil. In this way, the algae can grow, you skim off the oil, and you avoid the materials handling nightmare of harvesting and processing the algae. But that is going to require new technology, and unfortunately the invention of new technology isn’t a given.

The second way that I think algae can work is if there is a valuable co-product that offsets the production costs. This is PetroAlgae’s claim. The problem I see with this approach is that it isn’t scalable. You are going to be limited by the ability to put co-product in the marketplace. If the co-product is sufficiently valuable (let’s say you engineer algae that can produce insulin), then you could indeed offset the expense of algae production. But as it scales, you start to flood the market with this valuable co-product, and it is no longer so valuable. Or, if the co-product is already a commodity, it isn’t going to command a high enough price to offset production costs. Thus, I think this approach will be limited to niches. The approach described in the previous paragraph is the only one I think can be scalable.

Specifically on PetroAlgae, let’s look at one of the claims made in the video hosted on their site. Executive VP Bill Haskell makes the claim that a commercial licensee of a PetroAlgae system can produce 1.5 million barrels of transportation fuel a year. Krassen Dimitrov has made a case (PDF warning) that I have yet to see seriously challenged that based on the solar insolation falling on the earth at best one might produce 1 gallon of algae-based fuel per square meter of area.

If we look at the 1.5 million barrel claim above, that ultimately translates into a land requirement of 15,560 acres for just growing the algae. That is a 24.3 square mile plot of land. To put that in perspective, this is a plot of land 4.5 times the size of the largest refinery in the U.S. (which also has a capacity of 140 times greater than that claimed for the algae production facility that occupies 4.5 times the amount of land). And we haven’t even begun to consider processing all that algae.

Bottom line? I think their claims are exaggerated. I suspect that if you asked them to produce data justifying that 1.5 million barrel claim, one would find that they are making projections from small experiments and don’t actually have data to back that up.

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Let me try to answer these questions all together, because they are driving at the same theme. This isn’t really about creation of energy. Both fossil fuels and biofuels are about harnessing solar energy. In the case of fossil fuels, that is solar energy that was gathered over millions of years and cooked at high pressures and temperatures by the earth. Discovery of this ancient solar energy provided a windfall of energy that most of us take for granted.

We know this windfall is going to run out some day, and we already don’t like the fact that we have to rely on other countries to sell us part of their windfall. So we try to come up with schemes for capturing that solar energy and processing it immediately. This can of course be done in many ways, from direct solar capture, through the growing and conversion of biomass into energy. Generally the attempts to use solar power in real time suffer from various shortcomings (as do fossil fuels). However, some of those shortcomings are masked by the fact that the solar power that is being capture in real time is supplemented to a large extent by that same fossil energy we are seeking to replace.

The core of the problem is that many people – and I would say that most of our political leaders – don’t really appreciate the huge differences in the net energy from fossil fuels and the net energy from most renewable fuels. I have seen schemes floated in which our fossil fuels are displaced by cellulosic ethanol. You know what’s missing from those scenarios? The energy to produce the cellulosic ethanol. When that is taken into account, the primary energy production required to run a world on renewable energy is far greater than the primary energy production required to run a world on fossil fuel. So we have to do one of two things. We have to get used to the idea of eventually using a lot less energy, or we have to find better schemes for converting sunlight. (Or we will have to devote huge amounts of manpower to energy production – diverting productivity from the rest of the economy). In the short term, we will continue to draw heavily upon our fossil fuel reserves, but that can’t last forever.

In closing, let me offer up an example of how primary energy would need to increase if we switched from the high energy returns offered by fossil fuels to the much lower energy returns of most fossil fuels. Here are some numbers I have put together in the past. In a fossil fuel-based society, the energy return is currently somewhere around 10/1. Of 85 million barrels per day, 8.5 million of those barrel equivalents were used to produce the oil. For the sake of this exercise, let’s assume that oil was used to make oil. That leaves us with a net of 76.5 million barrels with which to power the world.

[Note: Thanks to Engineer-Poet for pointing out a math error here.] Now, drop the energy return of that same society to a biofuel range of 1.3 to 1. We have to solve two equations here: Net Energy = Energy out – Energy in, and Energy return = Energy out/Energy in. Solving these two equations for a net of 76.5 million barrels of oil means we have to produce a total of 255 million barrels of oil equivalent. In the fossil fuel society, it takes 85 million barrels of total production to sustain it. In the low energy return society that approximates today’s biofuels, it takes 255 million barrels per day to sustain it. That means that if we tried to run the world on low energy return biofuels, we would need to triple the overall energy output over what we produce today.

People who say energy return doesn’t matter fail to grasp this point. Unless biofuels are able to substantially improve their energy return – or we have a huge reduction in consumption – a lot more resources are going to have to be devoted to the energy sector.

Of course caveats abound when using an energy return to evaluate a biofuel. As I pointed out in one of my essays on Coskata, it is also possible to have a very good energy return and not net out much energy. Consider an example in which you start with 100 BTUs of biomass, consume 99 BTUs of the biomass to convert it to 1 BTU of liquid fuel, and input 0.1 BTUs of fossil fuel in the process. You could argue that your fossil fuel energy return was 10/1, but your conversion efficiency was terrible. You started with 100 BTUs of biomass and ended up with 1 BTU of liquid fuel.

These are some of the considerations we have to undertake as we try to ramp up biofuels to displace fossil fuels.

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You probably knew this – which is why I imagine you asked the question – but I was interviewed for that article. The interview took place way back in January, and I had forgotten about it until someone sent me the link.

I thought the article captured the gist of the interview in a concise manner. The key points I make to people about Accoya are generally around the modification of the hydroxyl groups in the wood, and how that impacts the properties of the wood.

I do want to reiterate that despite the career change I am in the process of making, I still feel like Accoya is a fantastic product with a bright future. I will maintain an advisory relationship to Accsys/Titan Wood after I leave, so you will probably see me writing about it on occasion in the future.

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There are several lawyers who read this blog, and almost every time I make a negative comment about their profession, one or more of them sends me a note. And I will probably get one after this.

In my opinion, litigation is attracted to big piles of money. Even if 99% of lawyers only go after cases with strong merit, there are always going to be some lawyers ready to file a suit at the slightest whiff of cash. My feeling is that we have too many lawyers, and the marginal lawyer has to find a way to make a living. So we get more lawsuits than we should have.

There is a lot of money flowing into the clean tech sector, and there are many people jumping in who may not have a clear picture of who owns various IP. That is a prescription for lawsuits. So, yes, I do expect more lawsuits as clean tech goes mainstream. That is the society we live in. Will it be a disincentive to invest? I don’t know. I do know that the money that flows out of the sector and into lawyers pockets won’t necessarily be invested back into the sector. So there will be a drain in my opinion. It could be that it is a tiny fraction in relation to the overall investments. Let’s hope so.

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OK, as far as I know I got the ones that hadn’t been addressed already (either in previous essays or by someone else in the comments). If someone feels like they didn’t get a question answered, ask in the comments following this essay and I will try to address it.