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By Robert Rapier on Jul 30, 2010 with 110 responses

Thoughts on an Ethanol Pipeline

Local Production for Local Needs

I currently live in Hawaii, and one thing I hope to help facilitate is for Hawaii to become more sustainable in food and energy. We have the natural resources here to be largely sustainable, but we depend on outside sources for around 90% of our food and energy. Currently, fuel and power in Hawaii are provided by Southeast Asia and from as far away as the Middle East.

Of course we do this for the same reason many countries are dependent on imports for their food and energy: That is cheaper than the alternative of self-sufficiency. But from the perspective of risk, regions with such high dependence on others for their basic needs can quickly find themselves in an uncomfortable position. The U.S. first found out the implications of dependence during the OPEC oil embargo of 1973. Today, the level of dependence in the U.S. is much higher than in 1973, so those risks continue to hang over our heads.

This is why I advocate — to the greatest practical extent — local production and usage of food and energy. As long as production can be done in a relatively efficient and economic manner, there are many potential benefits to communities that produce their own food/energy: Supply disruption risks can be managed, fossil fuel consumption from transporting food and fuel are reduced, and local jobs are created. Further, countries that are self-sufficient in food and energy can’t be held hostage by other countries withholding these things (which has often resulted in war).

In fact, this is a major factor generally given for broad adoption of renewable energy standards (with climate change concerns another major factor). To the extent that renewable energy is truly making a region more self-sufficient, I am highly in favor of incentives and programs to accomplish this goal.

A More Sustainable Midwest

One reason I have often spoken out against ethanol subsidies is that I didn’t see regions actually becoming more self-sufficient as a result. What I saw was a delusion of self-sufficiency. Yes, more ethanol was being produced, but the oil dependence of those producing communities continued to be very high (in some cases growing even as ethanol production soared).

Take the Midwest of the U.S. as an example. The United States is divided into five Petroleum Administration for Defense Districts (PADDs). These districts were created during World War II, and the Energy Information Administration (EIA) currently collects and reports statistics for the different PADDs. PADD 2 is essentially the Midwestern states. The states in PADD 2 are Illinois, Indiana, Iowa, Kansas, Kentucky, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, Oklahoma, South Dakota, Tennessee, and Wisconsin. (See this PADD map for a full breakdown of all five districts).

PADD 2 is responsible for approximately 95% of all ethanol production in the United States (production is actually more concentrated than that, as some PADD 2 states produce little or no ethanol). Ethanol production in PADD 2 has grown from 1.6 billion gallons in 2000 to 3.9 billion gallons in 2005 to almost 12.5 billion gallons in 2010. The region has clearly been successful in rapidly boosting ethanol production.

Despite this success, demand for conventional gasoline has remained strong. In 2000, demand for conventional gasoline in PADD 2 was 2.1 million barrels per day (bpd). Demand increased slightly by 2004-2005 to 2.2 million bpd before declining to the present demand value of 2.14 million bpd. (Source). In other words, even though ethanol production soared in the Midwest by some 700%, demand for conventional gasoline in the Midwest remains within 5% of the all time high set in 2004. (True gasoline demand is somewhat higher, because I am not considering the gasoline contained in approximately 400,000 bbl/day of reformulated gasoline).

Why Export When You Don’t Produce Enough to Sustain Yourself?

With a present conventional gasoline demand of over 2.1 million barrels per day against ethanol production of 0.8 million barrels per day, it is puzzling that an ethanol pipeline is being discussed. If gasoline demand in the Midwest was converted to demand for E85, every drop of ethanol produced in the Midwest could be consumed in the Midwest instead of using fossil fuels to transport it across the country.

Consider the following thought experiment. Let’s suppose that instead of 2.1 million barrels per day of gasoline, we could convert that demand to E85. Given a fuel efficiency penalty of 25%, it would require 2.1/0.75 = 2.8 million barrels per day of E85 to replace conventional gasoline in the Midwest. That breaks down to 2.4 million bpd of ethanol blended with 0.4 million bpd of gasoline (an 80% reduction in gasoline consumption). To put that into perspective, 2.4 million bpd of ethanol would be an annual demand of 37 billion gallons of ethanol versus the current 12.5 billion produced in the Midwest. Or, to put it another way, if E85 could only reach 34% market penetration in the Midwest, all ethanol produced in the Midwest could be used locally in the Midwest and oil imports could be backed out of the region.

But instead of a strategy in which we try to consume ethanol locally, we are trying to supply a little bit of ethanol all over the country, inefficiently transporting it from the Midwest to coastal states. At the same time, oil imports continue to flow into the Midwest. While most oil imports into the Midwest come from Canada, oil from Venezuela and the Middle East also makes its way into Midwestern gasoline. My view is that instead of exporting ethanol from the Midwest to New York (or even out of the country) we should make sure that E85 dominates the local markets and backs out Venezuelan crude, rendering hollow Chavez’s threats to cut off our crude supplies.

I was asked on a recent radio program about my thoughts on the proposed $4 billion pipeline to transport ethanol to the Northeast states. Because of the arguments I have laid out here, I said that I did not favor that. I think it would make far more sense to push the Midwest — also where much of the country’s food is grown — much further along the path to energy independence.

In fact, a Department of Energy study on the pipeline suggested that it may not even be economically viable:

Study casts doubt on ethanol pipeline

The study’s findings indicate that the ethanol pipeline would need to carry 4.1 billion gallons of corn-based ethanol annually to be feasible without major financial incentives.

That volume is nearly 50 percent higher than the volume for the pipeline being proposed by Poet, the world’s largest producer of ethanol, and Tulsa, Okla.-based Magellan Midstream Partners LP.

Poet and Magellan had been courting support in Congress to amend an alternative energy loan guarantee program that would back up 80 percent of the debt the companies plan to spend installing the ethanol pipeline.

I simply fail to see the logic of spending those kinds of dollars — including taxpayer dollars — to send ethanol outside a region that is still heavily dependent upon gasoline. A mere 10% penetration of E85 into the Midwestern gasoline market would consume even the 4.1 billion gallons mentioned above.

The report further notes:

But according to the DOE report, moving ethanol through the pipeline would cost shippers 28 cents per gallon at projected demand levels, well over the 19 cents per gallon average rate for the rail and barge transportation currently used.

So why not save that 19 (or 28) cents per gallon added costs from shipping it out of the Midwest and make E85 the fuel of choice there? If that strategy were successfully executed, there would be no need for ethanol pipelines or mandates for E15 or E20. The Midwest alone could consume three times the ethanol they currently produce, backing out oil imports into the region and eliminating the fossil fuel consumption from currently shipping ethanol around the country.

It would be far more efficient (i.e., fossil fuel savings and greenhouse gas reductions) to maximize local usage before trying to build an export market. Imagine that Hawaii followed the same model: Develop an alternative energy industry that ships the product to California, while continuing to import crude from Saudi for local needs. I think we would agree that this would be silly, and yet that is what is happening right now with ethanol in the Midwest.

  1. By Rufus on July 30, 2010 at 8:58 pm

    In general, I think your argument makes sense. I would point out that before the recession is was costing way more than $0.19/gal to get ethanol from the Midwest to the East Coast.

    Then, of course, there’s the matter of: it would take, basically, 20 years to get (virtually) all of the vehicles in the Midwest converted to Flexfuel if we required all new vehicles to be flexfuel, starting tomorrow.

    Having said all that, I’m about the same with this as I am with the blenders credit. I think the Republic will survive, either way.

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  2. By Kit P on July 31, 2010 at 10:04 am

    I think RR is a little
    confused on cause and effect.

     

    “(which has often resulted
    in war)”

     

    I can not think of a single
    case in modern history and most likely the the history of the world
    where this is true. Germany did not invade France for oil or coal.
    Japan did not invade China for oil or coal. North Korea did not
    invade South Korea for oil or coal.

     

    “What I saw was a delusion
    of self-sufficiency.”

     

    I think RR has spent too
    much time in the EU listening to their propaganda. I read a report
    on sustainability out Switzerland that found countries suddenly
    determined the US was less sustainable than some EU countries. If
    you looked closely the change was based on a change in their model.
    They capped at a factor of 1.06 production of things like food.

     

    If you want to understand
    why people do things, you should find out the criteria they have for
    doing them and not judge them criteria you make up for where you
    live.

     

    For example, there are some
    folks in California who think they can make all the electricity they
    need with PV panels on the roofs of their homes and we should not use
    coal and nuclear. However, solar is just not practical for most of
    North America. It has to do with how the earth rotates the sun.

     

    “This is why I advocate —
    to the greatest practical extent — local production and usage of
    food and energy.”

     

    This is why RR jets around
    the world. RR does a lot of advocating and not very much
    ‘exampling’.

     

    The reason RR is not a
    subsidence farmer in Oklahoma is that he likes the paycheck to
    provide his children more opportunities. Me too! There is also nothing
    wrong with subsidence farming if it is what you want to.

     

    Energy allows us to freedom
    to make choices including how we can use our individual talents to be
    more productive.

     

    The big market for food and
    energy is large cities. Railroads, transmission lines, pipelines,
    and highways have been built to transport those cheap commodities.

     

    So yes, American farmers
    are looking for new markets and efficient way to supply those new
    markets.

     

    And no, American farmers are
    not worried about ‘regional sustainability’ based on only one
    commodity.

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  3. By Kit P on July 31, 2010 at 10:42 am

    “In fact, this is a major
    factor generally given for broad adoption of renewable energy
    standards (with climate change concerns another major factor).”

     

    In reality, the electricity
    supply in the US is not dependent on foreign energy sources. I am
    not saying that RR is wrong about the reason people might give.

     

    “To the extent that
    renewable energy is truly making a region more self-sufficient, I am
    highly in favor of incentives and programs to accomplish this goal.”

     

    Regions are already
    self-sufficient while there is some trading back and forth between
    and summer and winter. The basic problem is large cities require
    lots of electricity but do not want power plants.

     

    If you look at the
    distribution of renewable energy it is mostly in rural area that
    already have surplus power. Creating good jobs and a large property
    tax base is not a hard sell in rural communities. People do not live
    in rural areas to look at wind mills or listen to ICE at biomass
    plants. Siting has to be done carefully to maintain community
    support.

     

    Big city folks want
    renewable energy but not near where they live or go on vacation. The
    carpet bagger issues are a problem. Project developer not being
    sensitive to local concerns and locals not being sensitive big city
    intervenor concerns can muck up a renewable energy project as fast as
    poor engineering.

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  4. By Rufus on July 31, 2010 at 10:57 am

    The anti-ethanol crowd are on the cusp of getting almost all of what they’ve been wanting. But, it doesn’t matter. Too late. The horsie has done boogied.

    Ethanol has been proven to provide more power, and torque by the round-track racers, and, now, the Edison2 Team has shown that, in a proper engine, it’s the superior method of achieving maximum “miles per gallon.”

    At a selling price of $26,000.00 the Buick Regal will have an “ownership/operating” cost, while operating on E85, of less than, just about any car in America.

    Folks like Fiberight, Inbicon, and Genera are on their way to ethanol from wheat straw, MSW, corn cobs, and switch grass for somewhere around $2.00/gal.

    The oil in “floating storage” is just about gone. China, and India are Booming.

    The fight is, basically, over, and I’m glad. I’m worn out.

    From here on out it’s, more or less, nature taking its course – in its own sweet time.

    Viva Nature!

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  5. By russ-finley on July 31, 2010 at 11:50 am

    A little off topic, but I know a guy who visited a defunct biomass power plant on Molokai way back in the seventies. He was there to do research on alternatives to oil during the OPEC embargo. He claims the area had been denuded to feed the plant. They basically ran out of stuff to burn and went bankrupt.

    Burning biomass to make electricity turns far more of the plant energy into work than turning it into a liquid fuel. Seems that the limited range of electric cars would be less of a hindrance in Hawaii.

    I was once surprised to see a large windmill farm on a distant hillside from the beach on Maui. Seems like a better idea than growing plants to burn unless limited to burning waste.

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  6. By Rufus on July 31, 2010 at 12:24 pm

    Biomass probably makes sense when used in conjunction with cellulosic ethanol, and, only, in certain areas.

    The Southeast, for example, is just a huge forest of scrub pine, interspersed with occasional field gone fallow to weeds, and bushes. Fairly fertile soil, and a warm, wet climate. In other words, more or less, perfect.

    The “trick” in dealing with biomass is “Small, and Localized.” Distributive, I think, is the phrase that was all the buzz a few years back.

    We can probably do something with areas like the SW, and Hawaii a few years (20, or 30) down the road, but they will require a lot more planning, and preparation (an example being, planting Agave in Arizona – perhaps by utilizing a little “drip” irrigation, etc.)

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  7. By Rufus on July 31, 2010 at 12:51 pm

    Hawaii probably has a Lot of potential for “Renewable, Sustainable” without getting too heavily into biomass. Examples being “Solar/Salt,” and Wind, Wave, Tidal, etc. Maybe, even that “Frenchie thang” from the prior post.

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  8. By russ-finley on July 31, 2010 at 12:58 pm

    Back on topic.

    1) This is an interesting thought exercise. I wonder if the blender credit has been used to suppress gasoline pump prices in the Midwest, stimulating consumption.

    2) Kit P’s comment, “I can not think of a single case in modern history and most likely the the history of the world where this is true [nations do not go to war to gain control over other's resources] makes me wonder what Hussain was really after when he invaded Kuwait.

    3) The fact that the cars in these ethanol producing states are not compatible with more than a 10 percent blend of ethanol is problematic. You would think our government would have considered this before they mandated use of a fuel that isn’t compatible with our cars or fuel distribution system.

     

     

     

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  9. By HalfEmpty on July 31, 2010 at 1:06 pm

    Kit P. the pseudo-engineer superb, is a real qualified troll.

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  10. By Rufus on July 31, 2010 at 1:33 pm

    The presence of the blenders credit could lower the cost of a gallon of E10 by $0.045 (Four, and a half cents) if it was all “passed along” to the consumer.

    This would Not, however, be limited to the “Midwest.” E10 is the most available blend all over the country, with the possible exception of Alaska.

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  11. By rrapier on July 31, 2010 at 1:40 pm

    Kit P. the pseudo-engineer superb, is a real qualified troll.

    He definitely has his moments, good and bad. For instance, I don’t know how many times I have pointed out that he doesn’t know the first thing about what I actually do, yet he writes stuff like this that he is unqualified to attest to:

    This is why RR jets around the world. RR does a lot of advocating and not very much ‘exampling’.

    He hasn’t the foggiest idea of how much exampling I do, because he knows zero about my personal life. The fact is that I grow some of my own food, I use very little fuel and electricity in my personal life, and when I am jetting around the world it is in support of projects to make regions more sustainable. So Kit likes to claim that others are confused, when he is the most confused of all.

    RR

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  12. By rrapier on July 31, 2010 at 1:49 pm

    2) Kit P’s comment, “I can not think of a single case in modern history and most likely the the history of the world where this is true [nations do not go to war to gain control over other's resources] makes me wonder what Hussain was really after when he invaded Kuwait.

    Or why we have such a strong presence in the Middle East and patrol the shipping lanes, or why Japan attacked Pearl Harbor, or why Hitler went into Russia.

    Then there’s also a higher chance of civil war (sometimes with foreign interference) when one area of a country has something another wants:

    http://monthlyreview.org/0107tabb.htm

    Between 1965 and 1999 if we look at those wars in which more than a thousand people were killed a year, there were seventy-three civil wars, almost all driven by greed to control resources—oil, diamonds, copper, cacao, coca, and even bananas. Collier and Anke Hoeffler find countries with one or two primary export resources have more than a one-in-five chance of civil war in any given year. In countries with no such dominant products there is a one in a hundred chance.

    I think the risk is very high that a modern military dependent upon oil to survive is more than willing to go get that oil if it gets cut off.

    RR

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  13. By rrapier on July 31, 2010 at 1:53 pm

    I think RR has spent too much time in the EU listening to their propaganda.

    No, I actually covered the issue I am talking about in the essay. I don’t need the EU’s help to read the information at the EIA. The Midwest has had rapid growth in ethanol, but remains just as dependent upon foreign oil. That is a delusion of self-sufficiency.

    RR

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  14. By Rufus on July 31, 2010 at 1:59 pm

    Well, no, we use 840,000 Barrels of Ethanol, Daily.

    We might still be dependent on foreign oil, but not to the same extent that we would be if the Midwest didn’t produce this biofuel.

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  15. By Kit P on July 31, 2010 at 3:01 pm

    “Hussain was really after
    when he invaded Kuwait.”

     

    Good point Russ about
    Hussain.

     

    So what are you saying Russ
    about poor Iraq. It was not ‘self-sufficient in food and energy’ and
    was holding Iraq ‘hostage by withholding these things’.

     

    There is a clear difference
    between self defiance and self interest.

     

    “The fact that the cars
    ..”

     

    The fact is that cars and
    the distribution system are actually compatible with the present
    mandate. If you read the 2005 energy bill you would find that the
    government did consider it. We are actually only 5 years into this
    experiment. In 2007 we increased the mandate.

     

    So Russ you need to read
    carefully and be specific with you words. One of the things the
    government is doing.

     

    http://www1.eere.energy.gov/bi…..peline.pdf

     

    “This study was prepared
    by the U.S. Department of Energy (DOE) in response to Section 243 of
    the Energy Independence and Security Act of 2007 (EISA). Section 243
    directs DOE to study the feasibility of constructing and using
    pipelines dedicated to the transportation of ethanol.”

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  16. By rrapier on July 31, 2010 at 3:37 pm

    Rufus said:

    Well, no, we use 840,000 Barrels of Ethanol, Daily.

    We might still be dependent on foreign oil, but not to the same extent that we would be if the Midwest didn’t produce this biofuel.


     

    Yet as shown in the essay, they use about as much gasoline as they ever did – even with the recession.

    RR

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  17. By Rufus on July 31, 2010 at 5:25 pm

    But, jiminey cricket, do you realize how much GDP has increased since 2000? How much more activity? How many more miles driven?

    And, conv. gasoline use, per your graph

    http://www.eia.gov/dnav/pet/hi….._2&f=A

    is only up 5%?

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  18. By Oxymaven on July 31, 2010 at 6:00 pm

    1) An ethanol pipeline would take at least 5 years to build, and I am one who thinks that at a minimum, we’ll have at least one commercially viable non-ethanol biofuel by then (butanol), and probably several ‘green gasolines’ (e.g., Virent, Amyris, etc). Seems like an ethanol pipeline would be a waste of money. Sec’y Chu’s DoE clearly is looking past ethanol as a biofuel. If ethanol is as cheap as advocates indicate, then it should be easy to convince stations to carry E85 and for FFV owners to buy it exclusively. But it usually is more expensive. The blend wall issue was well known back in 2007 when mandates were increases, and ethanol advocates claimed they could increase demand with FFVs and E85 because ethanol would surely be $1 gal by now. . . . . .

    2) I would love for RR to post a bit on Hawaii’s efforts towards energy independence. Given Obama’s familiarity that state from his youth, I think it would be a good example of how easy / difficult it is for an island to make meaningful advances to become self sufficient. Maybe that would be a good lesson for the President to understand a bit more clearly than he currently does? Islands surely have huge incentives to become less dependent on imports, but USDA and the Navy are paying a lot of attention to renewable energy for Hawaii, for example see the April 2010 presentations at a http://tinyurl.com/2etgmf8 It should be an interesting case study to see how quickly progress can be made there. Seems like Hawaii should have numerous natural assets that would greatly facilitate it’s efforts to reduce fossil fuel use (geothermal, climate for sugar cane, tidal, algae, etc.)

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  19. By Rufus on July 31, 2010 at 6:04 pm

    Here’s the Deal:

    Vehicle Miles Traveled seem to be up about 10%

    http://www.fhwa.dot.gov/ohim/t…..maytvt.pdf

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  20. By Peter Sandfort on July 31, 2010 at 6:10 pm

    Dear Robert:

     

    I think your observation on the pipeline project is insightful.

     

    However, if ethanol as an additive to gasoline is mandates to improve emmissions as well as to replace MTBE, some needs to be used in all gasoline. Perhaps your observation will help to limit blending to 10 or 15% while encouraging greater use in the midwest.

     

    The current rage to encourage cellulosic ethanol will fade like “the hydrogen economy” did when government finally realizes that it is not to be. Then the focus can be adjusted to something that can work, “generation 1.5″ which is crop aternatives to corn ethanol. Crops such as triticale (a Rye/wheat hybrid) in the northern wheat belt, barley (see Osage Biofuels), Industrial sweet potatos, sweet sorghum, SunSpuds, and perhaps cassava will come to the fore as practical ethanol feedstocks produced mostly outside the corn belt closer to large fuel consuming areas.

    It would seem to make sense to focus on technology that is already developed and has proven to be practical and economic. Cassava (tapioca) ethanol plants are now well proven in Thailand by American technology providers; this is also true for barley and triticale in Europe. The soon to be commissioned Osage Bioenergy ethanol plant in Virginia will operate on winter barley – a perfect solution for production of ethanol on the East coast which encourages farm production of a valueable winter crop which improves soil and reduces run-off.

     

    Yes, there are always better more practical ways of doing things. Unfortunately, for every technical problem, Washington always has a political solution – often not practical.

     

     

     

     

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  21. By rrapier on July 31, 2010 at 6:11 pm

    Rufus said:

    Here’s the Deal:

    Vehicle Miles Traveled seem to be up about 10%

    http://www.fhwa.dot.gov/ohim/t…..maytvt.pdf


     

    But they are slightly down since 2005. Of course most of the ethanol build-out has happened in the past 5 years. So you have all of this ethanol production, miles slightly down, and yet essentially the same gasoline consumption.

    RR

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  22. By rrapier on July 31, 2010 at 6:19 pm

    I would love for RR to post a bit on Hawaii’s efforts towards energy independence.

    The single biggest issue is land prices. Hawaii’s sugarcane industry is vanishing because it can’t compete with sugar produced on much cheaper land elsewhere. These are the challenges in trying to produce biofuels or food here: It is just so much cheaper to get it elsewhere. We do have ethanol in our gasoline here, but it is all imported.

    RR

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  23. By Rufus on July 31, 2010 at 6:19 pm

    Nationwide, E85 seems to be selling for about 18.5% less than gasoline (E10,) and in the Midwest it can be up to 30% Cheaper.

    http://e85prices.com/

    E85 has been severely wounded by the slow pace at which the auto companies have adopted the available fuel mileage optimization strategies available to it. All of the technology in the X Prize Engine, and the new Buick 2.0L engine has been around for over a decade, at least.

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  24. By Wendell Mercantile on July 31, 2010 at 6:27 pm

    So you have all of this ethanol production, miles slightly down, and yet essentially the same gasoline consumption.

    Which of course is because in the current general purpose engines* that must be capable of using both gasoline and ethanol, blending ethanol into the fuel drives the overall fuel economy down.

    All one has to do is look at the average fuel economy in Minnesota which has mandated E10 and a high percentage of E85, and at Wisconsin which does not have mandated ethanol. The two states are similar, yet average fuel economy in Wisconsin is about three mpg higher.

    ___________
    * Rufus ~ And you know that I know about the engine in the new Buick Regal, so don’t bring that up again. There are no new Buick Regals yet on the road, and it will be years before that engine technology makes a statistically relevant difference.

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  25. By Rufus on July 31, 2010 at 6:29 pm

    No, RR; If you’ll look at your own chart you’ll see conv. gasoline use is down about 5% from its peak in ’04 (4% since ’05.)

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  26. By rrapier on July 31, 2010 at 6:31 pm

    Peter Sandfort said:

    However, if ethanol as an additive to gasoline is mandates to improve emmissions as well as to replace MTBE, some needs to be used in all gasoline. Perhaps your observation will help to limit blending to 10 or 15% while encouraging greater use in the midwest.


     

    Hi Peter,

    Two comments on this. First, refiners are able to meet the emissions requirements without using an oxygenate. Now that the EPA has lifted the oxygenate requirement (different from the ethanol mandate), if refiners had no oxygenates available they should be able to still meet the emissions standards without a problem.

    But, assume for a second that ethanol is still needed in New York. Which makes more sense? Import oil from Venezuela that ultimately makes its way to the Midwest, or use that ethanol locally, back out the Venezuelan crude, and then use ethanol imports instead of oil imports to meet coastal needs? (Presuming the coastal states can’t make their own biofuels cost-effectively).

    Here are some related links:

    EPA officially lifts oxygenate requirement

    The Energy Policy Act required the EPA to remove the reformulated gasoline (RFG) 2 percent oxygen requirement. It took effect with its publication in the Federal Register.

    “Since passage of the Clean Air Act of 1990, gasoline refiners have long sought the removal of the oxygenate requirement, claiming they could make a gasoline that would be just as clean without the added oxygen,” Renewable Fuels Association President Bob Dinneen said. “Beginning today, refiners now have that flexibility. Still, virtually all reformulated gasoline in the United States will contain ethanol because it remains a very valuable component in gasoline.”

    California conducted tests a few years to estimate the impact of waiving the oxygenate requirement:

    http://feinstein.senate.gov/05…..030905.htm

    In September 2004, CARB sponsored a study by the Coordinating Research Council (CRC). The CRC issued a report entitled Fuel Permeation From Automotive Systems. The study was designed to determine the magnitude of the permeation differences between three fuels, containing MTBE, ethanol, or no oxygenate, in the selected test fleet. The study found that emissions increased on all 10 vehicle fuel systems studied when ethanol replaced the MTBE. In fact, the ethanol blended gasoline caused emissions to increase by 65% when compared with MTBE blended gasoline, and by 45% when compared with non-oxygenated gasoline.

    RR

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  27. By Rufus on July 31, 2010 at 6:32 pm

    Oops, your chart:

    http://www.eia.gov/dnav/pet/hi….._2&f=A

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  28. By rrapier on July 31, 2010 at 6:36 pm

    No, RR; If you’ll look at your own chart you’ll see conv. gasoline use is down about 5% from its peak in ‘04 (4% since ‘05.)

    Some of that is undoubtedly recession-related, but I consider a 4% drop in gasoline consumption (in the midst of a recession and considering that miles driven slightly fell) to be about the same usage, especially given that ethanol production tripled during that time.

    RR

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  29. By Rufus on July 31, 2010 at 6:41 pm

    Fuel Permeation? Are you back to that “dead, and buried horse?”

    Okay, did you mention that E85 in a FFV has a lower rate of “fuel permeation” than E0?

    And, Wendell, the 2.0 Regals are arriving “on the docks” as we speak. Don’t be silly. You think GM’s sending them over here, just so they can “send them back?” Yikes.

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  30. By Rufus on July 31, 2010 at 6:45 pm

    If you’ll look, again, Robert. VMT is up about 10% 2000 – 2009, and Conventional Gasoline Consumption is up about 5%.

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  31. By Wendell Mercantile on July 31, 2010 at 6:49 pm

    And, Wendell, the 2.0 Regals are arriving “on the docks” as we speak.

    Rufus~

    Yes, they are arriving (I never said they weren’t), but none are yet on the roads. And I will repeat: It will be years until the number of Regals on the road is statistically significant enough to bend the trajectory of national fuel consumption.

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  32. By rrapier on July 31, 2010 at 8:28 pm

    If you’ll look, again, Robert. VMT is up about 10% 2000 – 2009, and Conventional Gasoline Consumption is up about 5%.

    But the early part of the decade saw slow ethanol growth. The explosive growth is from 2005 on, and VMT was slightly down over that period of time. Gasoline consumption was also slightly down. Part of that undoubtedly is because the ethanol that is being produced in the Midwest isn’t all being consumed in the Midwest, but part of it may be that it just doesn’t have as much impact as you personally believe in reducing conventional gasoline consumption.

    RR

    [link]      
  33. By Rufus on July 31, 2010 at 9:10 pm

    Nope, that ain’t right, Robert. If you’ll go back to this site, you’ll see that VMT is virtually “The Same” from 2005 to 2009, and there’s, Actually, an “Increase” from 2004 to 2009.

    http://www.fhwa.dot.gov/ohim/t…..maytvt.pdf

    and, conventional gasoline use is Down, significantly. According to Your chart.

    [link]      
  34. By Rufus on July 31, 2010 at 9:19 pm

    This is Your Chart.

    http://www.eia.gov/dnav/pet/hi….._2&f=A

    It shows a 4% drop in Conv. gasoline consumed from 2005 to 2009, and a 5% drop from 2004 to 2009.

    SO, you’ve got an “Increase in VMT from 2004 to 2009, along with a 5% “Drop” in gasoline used.

    You’ve got, essentially, “Unchanged” VMT from 2005 to 2009, with a 4%
    “Drop” in gasoline used.

    There ya go. :)

    [link]      
  35. By rrapier on July 31, 2010 at 9:37 pm

    You’ve got, essentially, “Unchanged” VMT from 2005 to 2009, with a 4% “Drop” in gasoline used.

    There ya go. :)

    I think you miss the point. You are arguing over very small numbers here. The increase in miles traveled from 2004 was about 1.5%. The fall from 2005 was 1%. This is against a backdrop of an enormous increase in ethanol production.

    Further, I will bet (although I haven’t found a data source yet) that fuel economy increased across those years as oil prices climbed. There were numerous reports (covered here more than once) that sales of vehicles with higher fuel economy climbed over the past few years and sales of SUVs were down.

    When you consider the 700% increase in ethanol production in the past few years, a 5% decrease in gasoline consumption (in the heart of ethanol country) that could be partially attributed to ethanol just isn’t much to brag about. That’s setting your sights pretty low.

    RR

    [link]      
  36. By rrapier on July 31, 2010 at 10:14 pm

    Here is what I am talking about. Between 2004 and 2009 ethanol production went up by 600,000 bpd. Gasoline consumption only fell by 100,000 bpd over that same time frame, and some of that was likely due to increases in fuel efficiency. This in the heart of ethanol country. So those big declines in petroleum usage (or imports) that some promoters push just as a result of ethanol aren’t supported by the data.

    RR

    [link]      
  37. By Rufus on July 31, 2010 at 10:22 pm

    I think You are missing the point. I imagine the rest of the country had similar figures. eg. slightly increased VMT, with approx. 5% “Decrease” in conv. gasoline consumed.

    [link]      
  38. By Rufus on July 31, 2010 at 10:23 pm

    Or, in rethinking it: About the same VMT, and a Decrease of 4.5 to 5%.

    Somewhere in that range.

    [link]      
  39. By rrapier on July 31, 2010 at 10:27 pm

    Nope, that ain’t right, Robert. If you’ll go back to this site, you’ll see that VMT is virtually “The Same” from 2005 to 2009, and there’s, Actually, an “Increase” from 2004 to 2009.

    Actually, I just realized that you only took a one-month snapshot of VMT across the entire country. Will have to dig a bit more to see what the true numbers are, because you are comparing that single month view across the entire country to annual usages of ethanol and gasoline in PADD 2. Invalid comparison.

    There is also a danger of getting bogged down in the weeds. The important thing is that VMT aren’t much different over the past few years (in the vicinity of 1%), ethanol production increased by 600,000 bpd, and gasoline consumption only fell by 100,000 bpd (and some fraction of that will be attributed to higher fuel efficiency). Like I have said, not much impact and delusions of self-sufficiency.

    RR

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  40. By jcsr on July 31, 2010 at 10:44 pm

    You are absolutely right Mr. Rapier. Keep and use the ethanol in the wide open Midwest where it is needed and electrify mass transportation along the East and West coasts where it is more populated.
    Our State of Connecticut Governor has been trying to boost mass transportation for several years but gets little help from the Federal Government. When I read about this pipeline boondoggle it ticks me off.
    On another subject. There must be a lot of thermal energy on those volcanic islands of Hawaii to help electrify that State also.

    [link]      
  41. By Kit P on July 31, 2010 at 10:59 pm

    Osage Bioenergy

    http://osagebioenergy.com/comp…..ions.shtml

     

    One
    key advantage of barley over winter

    wheat
    is that barley is harvested a few weeks earlier. That allows farmers
    who double crop to plant their

    soybeans
    earlier and thus improve yields.

    “Barley
    fits well within our crop system,” said Dan Brann, a farmer,
    retired Virginia Tech grain crop

    specialist,
    and a long-time advocate of barley production in Virginia.

     

    [link]      
  42. By Rufus on July 31, 2010 at 11:18 pm

    Let’s Recap. Here’s what you’ve “Won.”

    1) The Pipeline, almost certainly, Won’t get built.

    2) The Blenders Credit will, quite likely, go away on Jan 1.

    3) There will be very few Loan Guarantees for Cellulosic Ethanol.

    4) As a result, Ethanol Production in the U.S. will expand very little from here.

    Here’s why it doesn’t matter:

    1) All that is produced will be blended, or exported.

    2) All present refineries will remain profitable.

    3 Gasoline will, within a year, or two, hit $3.50 +, again.

    4) It will, in time, become understood that Ethanol, in the right engine, is as fuel-efficient as gasoline.

    5) Word will start to leak out that the Fiberights, and Generas of the world are producing ethanol from cellulose at well below the price of gasoline.

    6) Gasoline will hit $3.75/Gallon.

    7) Obama will decide he wants to get REELECTED.

    8) Game Over.

    [link]      
  43. By Wendell Mercantile on August 1, 2010 at 12:08 am

    5) Word will start to leak out that the Fiberights, and Generas of the world are producing ethanol from cellulose at well below the price of gasoline.

    Rufus~

    If that indeed becomes a fact, it won’t have to “leak out.” It will become viral and spread like wildfire.

    When they scale up production, and can begin producing a liquid motor fuel at a cost well below that of gasoline, their e-mail “in-box” will become clogged with orders.

    [link]      
  44. By Joseph on August 1, 2010 at 3:13 pm

    Robert, you make too much sense for the political class! How unfortunate that people do not understand the geopolitical & economic threat (or bury their head in the sand) from a lack of self sufficiency.

    [link]      
  45. By carbonbridge on August 1, 2010 at 3:47 pm

    Peter Sandfort said:  The current rage to encourage cellulosic ethanol will fade like “the hydrogen economy” did when government finally realizes that it is not to be.

    I TOTALLY AGREE WITH YOU…

    ….as long as we are talking ‘true’ ligno-cellulosic ethanol made possible by seven-day batch fermentation processes using extra-expensive, extra-acidic enzymes followed by traditional yeast fermentation producing less than one-half the EtOH volumes per batch when compared to four-day cornstarch or sugar cane ethanol.  There have been firms who have basterdized the ‘ligno-cell terminology label’ simply to gain grant funds from unsuspecting dupes at the DOE.  Cellulosic ethanol produced by seven-day batch fermentation has not flown and isn’t gonna fly.  Simply ask Royal Dutch Shell who has invested for years in this true ligno-cellulosic tech with Iogen from Canada.

    Then the focus can be adjusted to something that can work, “generation 1.5″ which is crop aternatives to corn ethanol. Crops such as triticale (a Rye/wheat hybrid) in the northern wheat belt, barley, Industrial sweet potatos, sweet sorghum, SunSpuds, and perhaps cassava will come to the fore as practical ethanol feedstocks.

    THIS IS WHERE YOU ARE DEAD WRONG and simply don’t realize it!

     

    ••••••••••••••••••••••••••••

    Peter, you and Rufus (plus millions of other global citizens) mistakenly visulize that in order to produce an alternative fuel of any kind – that something needs to be planted, fertilized, copiously watered, weeded and harvested via agricultural farming communities.  Not so at all!  This is the most obvious misconception about fuel alternatives to crude oil/petroleum refining beginning with batch fermented corn or sugar cane ethanol.

    Your post on this thread listing all of these new agri-based fuel feedstocks — is simply promoting a false myth that ‘we can grow our way out of the Peak Oil dilemma’ while world population now teters at 7-billion hungry people.  And today, the basics of the oceanic food chain are in oily trouble beginning with a die-off of phytoplankton at the root of this same food chain.

    Carbon is carbon is carbon as a basic fuel building building block.  Ethanol’s molecule is written as C2H5OH.  The 75,500 BTU’s per gallon of EtOH’s combustion strength comes from just two carbon atoms per molecule which were originally plucked from corn starch and inefficiently re-arranged and recombined by utilizing acid enzymes, heat, water and yeasts – then followed by very expensive steam distillation and molecular sieving to purge 90% water quantities from every bio-fermented batch. Then clean, sterilize the tanks and begin another batch.

    These same two carbon atoms per molecule of EtOH could more easily and far more profitably have been plucked from methane, coal, municipal garbage, tires or sewer sludge instead of growing any new annual agri-crop of triticale, barley or industrial-variety of sweet potatoes.  However, enzymes and yeasts won’t function as the process drivers herein when piles of municipal garbage, sludge, ground tires or beetle-killed pine are chosen instead of millions of acres of cultivated crops.  This then takes a complete change of chemistry sets, a paradigm-shift of sorts – which incorporates super-heated steam, a 24×7 continous process and GTL catalysis technologies in world-wide use since 1923.  These process drivers are that which will soon replace batch-fermented biological processing mechanisms.

    Less-expensive carbon can and will soon be globally obtained for alternative fuels synthesis (not biological batch fermentation) from a host of different sources entirely.  These carbon sources will include garbage, sludge, beetle-killed pine, agri-biomass wastes, coal of any rank, ground tires, methane, contaminated methane, stranded methane, offshore flared methane, new shale methane, petroleum coke waste residues from oil refineries and even CO2 greenhouse gas, the problem culprit itself.

    This alternative process driver will become 24×7 thermal super-heated steam, — not inefficient biobugs used in four-day or seven-day ethanol batch processing methods.  And a new ethanol pipeline from the midwest to the east coast (being discussed on this thread) will not be necessary at all – because eastern communities will quickly learn how to convert their own municipal waste streams on a 24×7 non-stop basis into a new and stronger BTU blend of C1-C10 higher mixed alcohols when compared to C2 corn ethanol at a fraction of its production costs.

    The crowded “in box” which Wendell refers to will become an overnight reality with the “me too’s” who will want to participate. 

    These carbonaceous waste feedstocks are everywhere, – nothing new via agriculture needs to be planted, watered or annually harvested.  New equity owners will cover the spectrum from oil companies, electrical utilities and wealthy private investors to municipalities which can immediately decentralize and share project equity ownership dividends with local citizens through a variety of bonding mechanisms.

    Peter, you don’t realize how blind and misleading you actually are when promoting triticale, barley, industrial sweet potatos, sweet sorghum, SunSpuds or Cassava as the “next” agri-alternatives to corn.  If we were to eat these alternative agri-products, I’d be happy to listen.  But to convince farmers to plant and grow thousands or millions of acres of these alternative fuel crops solely as a new (carbon atom) source feedstock to produce greater volumes of alternative biofuels – uh uh.  No way!

    “There are none so blind as those who will not see.”  -The Moody Blues from the late sixties…

    All of these alternative 1.5 next generation agriculturally derived ‘carbon sources’ which you’ve listed still need to be planted, fertilized, watered, weeded and harvested — before inefficiently utilizing biological batch processing mechanisms in order to isolate and inefficiently re-combine and ouput the essential carbon atom building blocks contained within these agricultural products.

    Personally,  I’d prefer to see new organic varieties of agri-based ‘foodstuffs’ grown and marketed worldwide including meat, fish and eggs instead of side-stepping the basic, thermal technological steam-processing methodology by inadvertantly focusing on any annually harvested agri-crop to produce an alternative to petroleum-derived fuels. 

    And I also believe that the next hydrogen hallucination to crash will be the misplaced gaga over green algae (OIL) cultivation.  If intensive green algae production were free, its resulting OIL product output still floats on this planet’s water bodies just like BP’s crude oil does in the Gulf ocean.  Hydrocarbon Oil and Water don’t mix.  Hydrocarbon Coal and Water don’t mix.  The uncombusted OILY Emissions of all Hydrocarbons do NOT MIX with the Water Vapor integral to this blue planet’s fragile atmosphere.

    So just what is the misplaced fascination (or is it dis-information?) with jatropha, palm, soy and other oily plant species?  And in this thread, you add-in another six new agri-plant species to deflect focus and attention towards.  Herein, you and other folks simply miss the first natural and necessary environmental tenent — and this has EVERYTHING to do with natural biodegradability factors.  Corn or sugar cane ethanol as a substance at LEAST fits this biodegradability tenent just fine.  So does methanol and other other water soluble, biodegradable alcohols as the Chinese are quickly ascertaining…

    Any new biofuel as an alternative to petroleum-derived fuel needs a missing Oxygen atom (derived from H2O) and then it immediately becomes magnetically polarized.  THEN this oxycarbon ALCOHOL will dilute in water and biodegrade by feeding bugs, micro-organisms, phytoplankton and all living green plants and trees with a free lunch.  This magnetic polarity per each fuel molecule is simply achieved with a missing Oxygen atom which hydrocarbon OIL and COAL or palm, jatropha, sorghum or algae don’t feature.  Once added, the missing Oxygen atom thus allows for seamless ‘drop-in’ of stronger BTU higher alcohols (or methanol or ethanol) into different flavors of refined petroleum fuels or into coal let alone functioning as neat or substitute fuels unto themselves.

     

    –Mark

    [link]      
  46. By russ-finley on August 1, 2010 at 4:17 pm

    Wendell Mercantile said:

    It will be years until the number of Regals on the road is statistically significant enough to bend the trajectory of national fuel consumption.


     

    Especially when you consider that they only get 18 mpg city.

    [link]      
  47. By Rufus on August 1, 2010 at 4:49 pm

    Mark, there’s no “problem” with CO2, and the Phytoplankton are doing just fine. The Brainiacs that are squawking about this will realize in the next day, or so, that “Median” density is a Meaningless Metric when discussing phytoplankton. Watch.

    (btw, 70% of the world’s oxygen comes from phytoplankton. Have you noticed 35% of the world’s oxygen “go missing?”

    Fiberight is using “enzymes” on MSW, and is projecting $1.65/gal upon achieving full capacity.

    Anything that has the word “coal” in it isn’t sustainable, and anything that has the word “steam” in it is too expensive – at least, so far. We have enough fallow land in our county gone to weeds, and bushes to propel every vehicle IN our county. There are probably 1,000 counties in the SE that can say the same.

    Also, the lignin left over will produce a good chunk of our electricity. Combined with Wind, and Solar it would probably provide all of it. You’re behind the curve.

    [link]      
  48. By Rufus on August 1, 2010 at 4:52 pm

    But, 28 hwy, Wendell. That ain’t no itty bitty car. I’m not sure of the “weight,” but it’s got to be getting “up there.”

    It’s the same technology that took the Edison2 car 120 Miles on a gallon of E85.

    [link]      
  49. By carbonbridge on August 1, 2010 at 5:54 pm

    Rufus said:   Mark, there’s no “problem” with CO2 …

     

    Rufus:  I beg to disagree with you.  Yet I’m not going to debate all of the topics which you’ve just listed on a public blog.  May I suggest that you finally sign up on this RR blogsite as a bona-fide MEMBER, then list your real name, real email addy and a working contact phone number – THEN other Members can contact you offline by telephone and enjoin you in serious technical discussions and debates.  I for one would enjoy learning how you as a retired insurance peddler from Mississippi know so much about batch fermented corn ethanol.

    Thanks.

     

    Mark C. Radosevich

    Co-Founder, Scientist, Inventor

    Standard Alcohol Company of America, Inc.

     

     

    [link]      
  50. By Rufus on August 1, 2010 at 6:39 pm

    I got a lot of time on my hands, Mark. :)

    I believe we’re at, or near, peak oil. I think ethanol is, by far, our best chance of, within a reasonable time period, mitigating its very negative consequences. I decided this several years ago, and have “casually” studied the industry since. It’s Not my only interest, but it Is a key interest.

    Not one chance in a thousand that I would publish my name, and phone number on a blog. Not in a thousand, million. I enjoy the “give, and take” of blogs, and while sometimes I get edjeecated, every now and then, I get to do the edjeecatin (or, at least, share a nugget of knowledge that I’ve picked up somewhere along the way.)

    In the meantime, if you have any information about your process to which you would like to post a link I would love to read about it.

    All the best,

    Rufus

    [link]      
  51. By Kit P on August 1, 2010 at 6:43 pm

    “false
    myth”

     

    Is
    there such a thing as a true myth?

     

    “7-billion hungry people”

     

    No discussion about biofuels
    would be complete without talk of hungry people. I guess that is
    true. I get hungry every day mostly before I eat.

     

    “THEN other Members can
    contact you offline by telephone”

     

    Rufus should sell tickets.

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  52. By Wendell Mercantile on August 1, 2010 at 7:07 pm

    Rufus~

    There are about 246 million passengers cars on the road in the U.S. How many Buick Regals do you think GM expects to sell per year? Of the Regals they do sell, how many will have the 2.0-liter turbo-charged direct injection (TDI) engine that allows mileage burning E85 close to the mileage burning gasoline instead of the less expensive 2.4 liter engine without TDI?

    Buick’s current bestseller is the La Crosse, and they sold 5,000+ of those in May 2010. Even if the Regal is an instant hit, it is unlikely GM would sell as many as 100,000 units per year.

    Let’s assume the Regal is a hit, and sells 500,000 cars in the next five years, and that half of those are the 2.0 liter TDI. The Buicks with the TDI engine would be only 00.0002% of the entire U.S. vehicle fleet.

    Do you really think that would have any significant effect on U.S. fuel consumption?

    [link]      
  53. By Rufus on August 1, 2010 at 7:18 pm

    It’s NOT the Car, Wendell; it’s the Technology.

    All those 2.0L Turbo Engines you’ve been seeing coming, or about to come, onto the market are designed to do, with a couple of minor tweaks, the same thing this engine does. This engine is the first trickle of the “Flood.”

    [link]      
  54. By Takchess on August 1, 2010 at 10:05 pm

    Carbonbridge>

    Your rock lyric got me thinking and I had to google this old song.

    Regarding old rock lyrics (1970)

    http://www.lyricsbay.com/every…..evens.html
    There is none so blind as he who will not see.
    We must not close our minds; we must let our thoughts be free.

    predating it still is

    http://www.funtrivia.com/askft…..41522.html

    [link]      
  55. By Benny BND Cole on August 1, 2010 at 10:18 pm

    Have to say I agree with Russ Finley. While I deeply admire the intellectual, commercial and governmental skills of those researching and promoting biofuels, if you burn biomass to turn turbines (in a power plant) you get a better result, and moreover pollution is concentrated for easier treatment. 

    Hawaii could try this, growing biomass for burning in power plant turbines, and start importing the GM Volt and Nissan Leaf. I mean, how far can you drive on Hawaii or Maui anyway?  It seems a nuke plant or two, or several mini-nuke plants, could give Hawaii energy independence. 

    [link]      
  56. By takchess on August 1, 2010 at 10:21 pm

    Sorry about that 70′s Flashback Mark.

    So your technology, how is the heat generated?  NG?

    How does it differ from TDP?

     

    Thanks,

    Jim

     

     

     

    [link]      
  57. By Wendell Mercantile on August 1, 2010 at 11:12 pm

    It’s NOT the Car; it’s the Technology. This engine is the first trickle of the “Flood.”

    Rufus~

    I understand and admire the technology in the Regal’s 2.0 l TDI engine. In fact, I drive a VW with a TDI engine that can burn either petro-diesel or bio-diesel and gets 45+ mpg.

    But get real, there are now roughly 246 million passenger cars on the road in the United States. Do you comprehend what a large number that is and how long it would take any new engine technology (no matter how good) to build up enough numbers to make a significant difference? With the average turnover of the nation’s car fleet, it’s going to take about seven years before that “flood” starts to make a dent.

    [link]      
  58. By carbonbridge on August 2, 2010 at 12:17 am

    takchess said:    Sorry about that 70′s Flashback Mark.

    Jim:  I only remember those lyrics as sung by the Moody Blues.  I really enjoyed these musicians in their heyday in the late 60′s and early 70′s.  By the time they performed live at Red Rocks 3-4 dacades later with a Denver symphony in-tow, I was content to re-watch the video and purchase the CD.  Some of us gray-haired old fogies don’t attend the crowded concerts any more.

    I’d be happy to more thoroughly discuss methanization GTL techno with you privately.  This is RR’s ‘ethanol pipeline and is it a good idea(?)’ thread and I’d be going way off topic.

    Suffice to say methanization-GTL, something which takes 56,000 BTU C1 MeOH and converts it into 90,400 BTU C1-C10 internally via catalytic synthesis.  This GTL process produces twice the exotherm as methanol synthesis commonly does.  Light up some of the solid or gaseous carbon feedstock to first generate super-heated steam and some co-gen elect and then it kinda takes care of itself by producing continous high heat via catalysis of mid-stream syngas into biodegradable liquid alcohols.  Ten of em’.  GTL reactions run hot and must continously be cooled.  This is where the principle source of exotherm comes from.  In fact this natural exotherm accomplishes multiple tasks, all leading to greater mechanization efficiencies thus greater profits.  Suffice to say some integrated plumbing/pressure/heat exchanger kinds of tasks including 24×7 co-gen elect and municipal quantities of distilled water production while continously producing a 20% stronger BTU and 30 more Octane points of blended higher alcohols in comparison to C2 EtOH alone.  About 2x the direct efficiency gains when compared to C1 MeOH GTL production.  Simple stuff for Chem e’s – confusing to certain bankers who can only count six or eight zeros in the quarterlies. 

    Don’t worry, be happy!  Talk to me offline.  :-)

     

    -Mark

    [link]      
  59. By Rufus on August 2, 2010 at 12:36 am

    Gotta start somewhere, Wendell.

    [link]      
  60. By paul-n on August 2, 2010 at 1:53 am

    But, 28 hwy, Wendell. That ain’t no itty bitty car. I’m not sure of the “weight,” but it’s got to be getting “up there.”

    It’s the same technology that took the Edison2 car 120 Miles on a gallon of E85.

    Rufus, this just shows that excessive weight, will defeat the technology.  Surely, somewhere between the 120mpg 700 lb Edison, and the 3600lbs and 30mpg for the Regal, is a happy medium.  Like a 2000lb car that can seat four and get 50mpg.  New model Corollas, Civics, etc are getting in the 40′s and weigh 2600lbs, so we are getting closer.

    The problem is not just the fuel, it;s the oversize, overweight, under occupied vehicles using it, and mostly in congested city traffic.  Running wasteful vehicles, in wasteful ways, on renewable fuel is still wasteful.  

    GM could have achieved equally good fuel savings with the Regal by putting it on a diet.

    [link]      
  61. By tennie davis on August 2, 2010 at 4:37 am

    Mr. Rapier
    Mabye i’m missing somthing here, but do you regularly obtain your information from the Monthly Review?
    Does it influence your opinions?
    If so, your credibility, (at least with me) is suspect.

    [link]      
  62. By rrapier on August 2, 2010 at 5:11 am

    Mabye i’m missing somthing here, but do you regularly obtain your information from the Monthly Review?

    Sorry, you lost me. Monthly Review?

    RR

    [link]      
  63. By tennie davis on August 2, 2010 at 6:47 am

    RR
    in a earlier comment, in reply to kit p’s comment you said.
    Than there’s also a higher chance of civil war (somtimes with foreign interference) when one area of a country has somthing another wants.
    Than a link to monthlyreview.org

    [link]      
  64. By Rufus on August 2, 2010 at 8:29 am

    I agree, Paul, but in this country we have the Freedom to buy what we can afford (within reason, of course.)

    Evidently, there are still a lot of people that can afford larger cars, and wish to buy them. As long as they’re not overly “polluting,” that is their right.

    [link]      
  65. By Stephanie Dreyer on August 2, 2010 at 9:10 am

    RR – One of the reasons why demand for oil has stayed steady over the years is because we have a fuels market that is completely controlled by oil companies. The oil companies either own or control the entire infrastructure to dispense fuel in this country – from the point of drilling the well to the point where that fuel nozzle goes into your car. Today, there are about 8 million flex fuel vehicles on the road today but only about 2,000 fueling stations equipped with blender pumps to service those vehicles. If we build out the ethanol fueling infrastructure, we can provide consumers with a choice at the pump that includes renewable ethanol. Growth Energy introduced their Fueling Freedom Plan to do just that. The plan would redirect and eventually phase out current government supports for ethanol in exchange for investments in infrastructure. With ethanol infrastructure in place, we can start decreasing our dependence on oil through the expanded use of cleaner, greener ethanol. To learn more go to http://www.growthenergy.org/fu…..ingfreedom

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  66. By Wendell Mercantile on August 2, 2010 at 10:11 am

    Gotta start somewhere

    Rufus~

    Understood, and I concur. But don’t let your enthusiasm jump ahead of what is realistically possible.

    [link]      
  67. By takchess on August 2, 2010 at 10:32 am

    Carbonbridge/Mark

    re:I’d be happy to more thoroughly discuss methanization GTL techno with you privately. This is RR’s ‘ethanol pipeline and is it a good idea(?)’ thread and I’d be going way off topic.

    Thanks for the offer. Perhaps a guest column would be in order ….

    [link]      
  68. By Rufus on August 2, 2010 at 10:35 am

    Enthusiasm don’t cost nothing, Wendell. :)

    [link]      
  69. By doggydogworld on August 2, 2010 at 11:06 am

    I can’t follow your argument. You say PADD2 gasoline usage has not fallen despite a huge increase in local ethanol production. But the EIA’s Finished Motor Gasoline numbers include ethanol. If PADD2 somehow switched entirely to E-85 the amount of oil-based gasoline they consume would plummet from 2.5m bpd to only 0.375m bpd, but the total Finished Motor Gasoline reported by the EIA would still be 2.5m bpd (this assumes everyone drive’s Rufus’s Miracle Regals, otherwise the numbers would actually go up).

    I agree with your conclusion: the Midwest should switch to E-85 before exporting significant quanties of ethanol. To speed the process along we should require all cars sold in the Midwest and neighboring areas to be FFVs. We should also require all gas stations in PADD2 to carry E-85. The rest of the country, who will benefit from the Midwest’s lower oil consumption, should of course pay for these programs.

    E-85 in the Midwest, CNG instead of diesel in trucks and electric-drive cars in cities is the ticket. But even if the Midwest goes E-85, don’t look for a drop in the EIA’s PADD2 Finished Motor Gasoline data.

    [link]      
  70. By Wendell Mercantile on August 2, 2010 at 11:25 am

    The oil companies either own or control the entire infrastructure to dispense fuel in this country.

    Stephanie~

    There is nothing to prevent the ethanol industry from building their own chain of ethanol fuel stations. That’s what companies such as Texaco, Phillips 66, Conoco, Sinclair, et al. did to expand their network of retail gas stations in the 1930s, 40s, and 50s.

    Why don’t major players in the ethanol industry such as POET build their own E85 refueling stations along the major Interstate highways through the Corn Belt states such as I-70, I-80, I-90, I-29, I-35, I-39, I-55, I-57, and I-65 ?

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  71. By Stephanie Dreyer on August 2, 2010 at 11:54 am

    Wendell, Growth Energy is working to install blender pumps and E85 stations across the country through our E85 and blender pump grant program but we also need more flex fuel vehicle owners on the road to consume that fuel. Higher demand for ethanol will effectively help increase production of blender pumps and E85 stations. A commitment from automakers to manufacture flex fuel capable vehicles and an investment in the ethanol blender pumps and E85 will make ethanol available on all the Interstate Highways that you mention above.

    To learn more about E85 pumps and blender pumps. go to http://www.ethanolretailer.com

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  72. By paul-n on August 2, 2010 at 12:05 pm

    Rufus,

     

    Agreed that buying large cars is still a right, and I would not for a minute change that.  Though I would tax either the car or fuel accordingly.  

    However, neither of those things are going to happen, so we must find other ways.   I still maintain that GM could put the Regal (and all their cars) on a diet.  You can still have family sized cars with less weight, without compromising safety or comfort.

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  73. By Wendell Mercantile on August 2, 2010 at 12:56 pm

    blender pump grant program

    Stephanie~

    Can’t say positively, but I’m fairly confident that Texaco, Phillips 66, Sinclair and the others weren’t waiting for a “pump grant program” in the 30s, 40s, and 50s when they were expanding their network of retail gas stations across the country. I suspect they either sold stock or borrowed to raise the capital they needed to expand their retail infrastructure. Why can’t GE and RFA do the same?

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  74. By rrapier on August 2, 2010 at 1:22 pm

    in a earlier comment, in reply to kit p’s comment you said.

    Than there’s also a higher chance of civil war (somtimes with foreign interference) when one area of a country has somthing another wants.

    Than a link to monthlyreview.org

    OK, thanks. Mystery solved. When you first posed the question, I thought 1). What is Monthly Review? 2). I wonder if they wrote something about an ethanol pipeline?

    The answer is “No, I don’t rely on Monthly Review (or any source, for that matter) to form my opinions.” In fact, when you asked the question I had to Google “Monthly Review” and I found no references to it on this site. So I wasn’t sure what you were getting at.

    On the other hand, I have written over a thousand essays and posted many thousands of comments. I have linked to very diverse sources of information. They are sometimes polar opposites, like the New York Times or Wall Street Journal. This will generally be because they have summarized a primary source or they have a quote of interest. I frequently draw on the Renewable Fuels Association as a source, but that by no means indicates that they are helping me to form my opinions.

    In the particular case above, the source had condensed a primary source. I don’t believe the particular point is controversial; we have many cases where civil wars are fought over resources (and cases like Japan who were cut off from oil then going out and getting oil).

    So that’s the long answer. The short answer is that if you read much of what I write, it should be clear that no particular source other than my life’s experiences is influencing me to write what I do.

    RR

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  75. By rrapier on August 2, 2010 at 1:31 pm

    doggydogworld said:

    I can’t follow your argument. You say PADD2 gasoline usage has not fallen despite a huge increase in local ethanol production. But the EIA’s Finished Motor Gasoline numbers include ethanol.


    But I didn’t use Finished Motor Gasoline. I split out conventional gasoline, which is defined as “Finished motor gasoline not included in the oxygenated or reformulated gasoline categories. Excludes reformulated gasoline blendstock for oxygenate blending (RBOB) as well as other blendstock.”
     

    RR

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  76. By rrapier on August 2, 2010 at 1:33 pm

    Stephanie Dreyer said:

    RR – One of the reasons why demand for oil has stayed steady over the years is because we have a fuels market that is completely controlled by oil companies.


     

    Not exactly. They don’t control how much ethanol they get to blend. That is imposed on them.

    As fas as Growth Energy’s plan, if you do a bit of digging here you will see that I have been proposing a similar redirect of those funds for quite some time. My argument goes “We don’t need a redundant subsidy, but if we are going to spend the money, we should spend it to build out E85 infrastructure in the Midwest.”

    RR

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  77. By Wendell Mercantile on August 2, 2010 at 1:34 pm

    I still maintain that GM could put the Regal (and all their cars) on a diet. You can still have family sized cars with less weight, without compromising safety or comfort.

    Well said Paul N. When you stop to think it about it, it makes little sense to burn energy pushing 3-4,000 lbs (or more) of steel, glass, rubber, and plastic in order to move (in most cases) a single human body that might weigh 200 lbs or so. (Although I have seen tiny 100 lb women driving three-ton Escalades and Tahoes.)

    Most of our transportation fuel budget goes to moving the heavy steel cocoons we feel we must surround ourselves with, and not the actual payload.

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  78. By doggydogworld on August 2, 2010 at 3:05 pm

    Robert Rapier said:

    But I didn’t use Finished Motor Gasoline. I split out conventional gasoline, which is defined as “Finished motor gasoline not included in the oxygenated or reformulated gasoline categories. Excludes reformulated gasoline blendstock for oxygenate blending (RBOB) as well as other blendstock.”

     


     

    Well, if you look at page 142 of the EIA’s latest Petroleum Supply Monthly, the definition for “Oxygenated Gasoline (Including Gasohol)” says:

    Beginning with monthly data for January 2004, oxygenated
    gasoline is included in conventional gasoline.

    According to the definition E-5.7 and above is included in oxygenated gasoline and thus also in conventional gasoline.

    But it doesn’t matter. If ethanol is included in reformulated instead of conventional then reformulated has seen a large drop in product supplied coming from oil and an offsetting increase in ethanol. Either way, Midwest ethanol has displaced more petroleum than you say.

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  79. By rrapier on August 2, 2010 at 4:30 pm

    Beginning with monthly data for January 2004, oxygenated gasoline is included in conventional gasoline.

    EIA definitions are nothing if not confusing. I have had to exchange multiple e-mails with them in the past to clear up a similar matter. The definitions appear to me to be contradictory, since the other definition says that conventional gasoline contains gasoline NOT included in the oxygenated category. I think I will write to them about this, because I am really curious that if ethanol is included in conventional gasoline whether there is a place that they separate out petroleum-derived gasoline and blendstocks. It would also be helpful to find current data on E85 usage, but it doesn’t appear that the EIA regularly reports that.

    If ethanol is included in reformulated instead of conventional then

    reformulated has seen a large drop in product supplied coming from oil

    and an offsetting increase in ethanol.

    But the reformulated category hasn’t changed all that much. To begin with, it only makes up 15-20% of all gasoline in PADD 2, but then it has also only risen 10% or so since 2004. Remember that I am talking specifically about PADD 2 here. I think the discrepancy may be that a large portion of the ethanol produced in PADD 2 isn’t consumed in PADD 2 – which is why we don’t see more gasoline being backed out of that region.

    RR

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  80. By doggydogworld on August 3, 2010 at 9:46 am

    EIA definitions are nothing if not confusing.

    Amen to that. Ethanol is now big enough they should break it out.

    But the reformulated category hasn’t changed all that much.

    The total is still around 400k bpd but the mix has changed to 200k bpd from oil and 200k bpd from ethanol. Or thereabouts. Table 12 of Petroleum Supply Monthly seems to show 207k bpd of Fuel Ethanol going into PADD2 Finished Motor Gasoline:
    http://www.eia.gov/pub/oil_gas…..psmall.pdf
    Note -546k bpd is “Net Receipts”, which I take to be exports to other PADDs. Tables 8, 16, 20 and 24 show PADD1 gets about 300k bpd of this, PADD3 about 100k, PADD4 nothing and PADD5 about 140k. At 207k bpd PADD2 isn’t even saturated at E-10, much less E-85. Furthermore, PADD2 imports 1500+ bpd of crude oil and motor gasoline blend at the same time it exports 546 bpd of ethanol. You are right, this seems insane. Some exports may be needed as oxygenate. Also, the Midwest today probably doesn’t have enough E-85 pumps and FFVs to burn the whole 781k bpd, but that’s easily fixable with federal subsidies. Seems like an opportunity to reduce transport costs for both ethanol and petroleum.

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  81. By rrapier on August 3, 2010 at 1:46 pm

    I have a response from the EIA, but questions remain. I need to send a follow-up before this is all clear, and then I will share what they said.

    RR

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  82. By rrapier on August 3, 2010 at 2:18 pm

    OK, here is the exchange with John Duff at EIA. I had asked about separating out the petroleum components from the ethanol components, and here was his reply:

    You can find the data on PAD District 2 ethanol consumption relative to total PADD 2 gasoline consumption here:

    http://www.eia.gov/dnav/pet/pe….._m_cur.htm  (May 2010)

    PADD 2 Fuel Ethanol consumption can be found in the “Refinery and Blender Net Inputs” column under “Fuel Ethanol.”  PADD 2 gasoline consumption can be found on the same table under the column “Product Supplied” under “Finished Motor Gasoline.”  Monthly historical data for each item can be found by clicking on the value posted for each on the table linked above.

    You can find the same information for PADD 2 for the 2010 “Year to date” (January-May 2010) time period here:  http://www.eia.gov/pub/oil_gas…..able10.pdf

    As for tracking E-85 on a weekly basis, EIA does that, though not directly for sales. We publish data for production, which, because of the nature of ethanol blended gasolines, likely reflects a number reflecting deliveries to retail outlets or consumers, which would be very close to the volume of sales.

    We currently survey production of conventional gasoline blended with ethanol in two subcategories: (1) Ed55 and Lower, and (2) Greater than Ed55. These two categories distinguish between ethanol blended gasolines that are either 55% ethanol or less, or greater than 55%ethanol (respectively).

    We did it this way because we wanted to distinguish between the currently used 8-10% ethanol blends (“Ed55 and lower”) and E-85 (“Greater than Ed55”), while keeping in mind that as ethanol blending ratios may change, we did not want to have to keep changing our product definitions. This way we have two categories that distinguish between ethanol blended gasolines that are mostly gasoline (Ed55 or lower) and ethanol blended gasoline that is mostly ethanol (“Greater than Ed55”).  We assume virtually most, if not all of the “Greater than Ed55” being blended currently is, in fact, E-85.

    You can find our weekly production of “Greater than Ed55” in *pdf format on our Weekly Petroleum Status Report page here: http://www.eia.gov/pub/oil_gas…..table3.pdf

    In html format you can find Blender production of “Greater than Ed55” here:

    http://www.eia.gov/dnav/pet/pe…..b_s1_w.htm

    . . .and Refinery production of “Greater than Ed55” here: http://www.eia.gov/dnav/pet/pe…..r_s1_w.htm

    I hope this has been helpful and answers your questions. If not, or if I can be of any further assistance, please let me know.

    John Duff

    Energy Information Administration

    Petroleum Supply Division

    Office of Oil and Gas

    U.S. Department of Energy

     

    I then followed up with:

    Just to make sure I am clear. “Finished Motor Gasoline” includes ethanol, right? So if I want just the petroleum inputs, I would need to subtract out “Fuel Ethanol” from the finished gasoline category?

    He replied that this was correct. So now I need to crunch some numbers.

    RR

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  83. By paul-n on August 3, 2010 at 5:19 pm

    So now I need to crunch some numbers.

    I have done some number crunching of my own, though on a slightly different aspect of this issue.

    It takes energy to move a fluid through a pipeline, and the exact amount depends on fluid density, viscosity, temperature, pipe roughness etc.

    Fortunately, some numbers are available, from this report on the Alaskan pipeline, the ORNL quotes the average energy to move oil (crude and products) through a pipeline is 252 btu per ton-mile. 

    The energy required is proportional the viscosity of the fluid;

    • 40deg API crude has a viscosity 3.5 centistokes at 130degF
    • Gasoline is 0.6 cSt
    • Ethanol is 1.2 cSt

    So we can assume that it takes 1/3 the energy to move a gallon of ethanol by pipeline than crude, but ethanol has only 2/3 the energy per gallon, so for every gallon of crude (or gasoline) we displace, we need to move 1.5 gallons of ethanol, so it takes half the energy, or about 125 btu/ton-mile.

    The distance from the GOm to Iowa is about 1000 miles, and the distance to the east coast is about 1200.

    So, for every ton of ethanol (335gal) piped to the east coast, it takes 1200×125=150,000 btu of energy.

    Because this fuel was not used in the midwest, they had to import and then refine crude oil to make motor gasoline.  Each ton of ethanol requires 2/3 of ton of gasoline to replace it, so we need to pipe that in from the Gulf coast (where most oil imports arrive).  piping gasoline is quite efficient, but it the crude is actually piped to the midwest and refined there.

    So to get our 2/3 ton gasoline we’ll assume we need 1.5 tons of crude (the other half is refined to other products), so we need to transport 1.5 tonsx1000miles*252btu/ton-mile = 378,000btu.

    Adding these two amounts together we have 528,000 btu per ton of ethanol piped, or 1576btu per gallon of ethanol.

    Ethanol has an energy content of 84,600btu/gal, so for every gallon that is shipped to the east coast, that could have been used in the midwest, 1.9% of it’s equivalent energy value has been used in transporting it.

    So, if the pipeline is shipping 4bn gpy, the system is consuming the equivalent of 74 million litres of ethanol in transport energy!

    IF we assume that the energy to run the pipeline is baseload electricity, from coal, then this system would use 6.3 trillion btu’s per year, for the transport energy.  That is 252,000 tons of coal, per year, that will be consumed, because this ethanol is being used on the east coast instead of the midwest.  There is also the not inconsiderable amount of coal used to make the steel for the pipeline itself.

     

    So, while this pipeline may help the profitability of the ethanol industry, it is clearly NOT doing anything to reduce the energy usage of the country, it is actually increasing it.

     

     

     

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  84. By Wendell Mercantile on August 3, 2010 at 5:39 pm

    So, while this pipeline may help the profitability of the ethanol industry, it is clearly NOT doing anything to reduce the energy usage of the country, it is actually increasing it.

    Primo! Well done Paul N.

    Only critique I have is that the energy content of ethanol is closer to 76,100 Btu/gal, but that only strengthens your case study.

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  85. By paul-n on August 3, 2010 at 5:55 pm

    I am working in HHV, if we use LHV then ethanol is indeed 76,000, and gasoline is only 114,000 – overall ratios remain the same, as does the conclusion, of course.

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  86. By carbonbridge on August 3, 2010 at 6:54 pm

    Paul N said:   I am working in HHV, if we use LHV…


     

    Paul:  When I read your excellent post, I had the exact same ‘concern’ as did Wendell.  The BTU numbers for alcohols are all over the chart when you start searching for accurate answers.  Even chemical glossaries used by refiners in their labs who mix different components into finished gasoline have been found to be wrong.  Ie:  The consumer has a feeling for pump octane.  Same consumer has no clue what research octane and motor octane added together and divided by 2 to average these high and low octane values into published ‘pump octane’ actually means.  So will be safer using the LHV number than HHV because the average reader doesn’t understand the differences here.

    After considerable work in this area, I’m more comfortable in stating 75,500 BTU’s / gal for C2 EtOH.  These last few years I’ve raised my earlier quotes (taken from chemists in the labs circa 1986) from 50,000 BTU’s for C1 MeOH up to 56,000 BTU’s.  And while most gasoline is supposed to deliver around 115,000 BTU’s (and the charts which people continually use cite 125,000 BTU’s) when you start spending your own hard-earned dollars to have street gasoline analyzed for BTU, octane, RVP ratings, hydrocarbon component contents, etc., – THEN you will very quickly ascertain that most gasoline being sold in North America comes in pretty close to 112,000 BTU’s.

    All this for whatever it is worth.  Great post in coming to some unexpected conclusions concerning a new, dedicated ethanol pipeline from the midwest to the east coast area.

    Furthermore, I too believe that greater E-85 volumes should be marketed very close to the point where ethanol has been inefficiently fermented from regional agri-feedstocks.  FFV computer chips under the hood work very well to allow full use of the E-85 fuel blend and we’ve already discussed the fact that motorists who can locate an E-85 pump should be encouraged to tap into it and begin experimenting with 20% to 40% volume ethanol blends into their own gasoline to see just how well that their own car or pickup may perform.  I’m guessing that lot of people would be surprised to learn that they gain noticably better performance from alcohols when combusted in greater volume proportions when mixed with gasoline and then combusted in unadjusted engines.

    In yesterday’s BioFuel Daily news, I read more disheartening DISINFORMATION from a wide-spread group of unlikely foes who oppose raising the blend wall of ethanol from 10% to 15%.  I have not yet located this new advertisement being discussed at the url below, but from the published comments it is sure to scare most motorists – especially when illustrating engine stalls in the desert country.  This is all a bunch of bunk.  Those backing this attack are even claiming that ethanol burns hotter and may seize-up your engine, etc.  It is outright lies like these which will come back to haunt those supporting these scare tactics.  Ethanol combusts slower and cooler, not hotter and faster.  This is why the spark advance ignition timing can be advanced so far as the oxycarbon alcohol gets greater volumes behind it in respect to volumes of hydrocarbon gasoline.  Think of this important Oxygen atom converting hydrocarbons (devoid of oxygen) into oxycarbon ALCOHOLS as being one-half of H2O water.  Would this help people to possibly ascertain “cooler combusting” while also interpreting “more thorough combustion” as well?  The combination of these events provides more power (with properly adjusted air/fuel ratios and spark advance timing ie: FFV Chip) and then as a net result, emitting far less unburned oil compounds out the tailpipe.  Keeping it simple here, it is unburned oils which immediately phase separate into water-laden air which we see and breathe as brown urban smog.

    –Mark

     

    From BioFuel Daily 8-2-10

    Campaign Advocating More Scientific Testing

    For Ethanol Launched

    http://www.biofueldaily.com/re…..d_999.html

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  87. By paul-n on August 3, 2010 at 9:02 pm

    Mark,

    Agreed, I probably should have worked on LHV, since that is what everyone else seems to use.

    That story is interesting, qhen you look at the list of people opposed to higher ethanol blends, it includes numerous food industry groups, including those representing meat and snack foods – both major corn consumers.  Clearly, they don’t like having the ethanol industry bidding up the price for corn!

    Seems to me the solution is to set up the E85 pumps with a “dial a mixture” setting, for anything from E10 to E 85.

    Unmixed (normal gasoline) can remain at 10% max, but change the law to allow customers, at their discretion, to mix higher blends for themselves.  Simple, really.

    A further note about the pipeline and energy use.  The picture gets dramatically worse the moment the ethanol starts to get exported. You have more energy use then for shipping of ethanol out and oil in (80 btu per ton-mile for each), so if 2/3 ton of oil comes from 5000miles away and the ton of ethanol goes the same distance, you have another 640,000btu (of heavy fuel oil) used for transport, doubling the embodied energy. 

    But it gets better still, as you also have the additional energy use to refine the extra crude oil, which runs to about 10% of the finished product.  So every ton of ethanol exported, needs 0.67 of a ton of gasoline/crude to replace it, plus an extra  0.067 ton equivalent energy for refining.  This works out to 2.98 million btu’s of input energy (mostly nat gas).

    Adding these up we now have a total, marginal energy use of 4 million btu’s per ton of ethanol exported, or 11,900 btu/gal – which is 14% of it’s energy content (HHV basis).

    So if 1 of the 4billion gpy is exported, it would increase total US energy use by 11.9 trillion btu/year!

    The government should ban ethanol exports outright, or at the very least, refuse to subsidise them in any way, as they truly make the country more dependent on imported oil, and needlessly waste domestic coal and natural gas.

     

     

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  88. By Rufus on August 3, 2010 at 11:12 pm

    Paul, inasmuch as “exported” ethanol hasn’t been blended, there have been no “blenders” credits applied. A small percentage of it would be eligible for the “small producers credit.” Taken as a whole, this would come out to less than a penny/gal. There would probably be in the range of $0.05/gal “corn” subsidies. Probably wouldn’t “break the bank.”

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  89. By carbonbridge on August 4, 2010 at 1:32 am

    Rufus said:

    Paul, inasmuch as “exported” ethanol hasn’t been blended, there have been no “blenders” credits applied. A small percentage of it would be eligible for the “small producers credit.” Taken as a whole, this would come out to less than a penny/gal. There would probably be in the range of $0.05/gal “corn” subsidies. Probably wouldn’t “break the bank.”


     

    Rufus,

    Who are you working for?  Who pays your salary to defend the corn ethanol industry?  Would you consider taking a 5-day break and therin reviewing where other comments might come from IF you were not loading these discussion threads with insider opinions?

     

    Paul N.:  I hope that Stephanie Dreyer and Growth Energy folks read your posts and decifer, agree OR challange your energy balances of operating a new EtOH pipeline idea.  When in doubt, follow the money.

    For everyone that opens their minds herein just a bit and even states a typewritten opinion, — there are 100 other readers perusing comments from far and wide who do not.  Who else might like to voice their opinions about using more E-85 where it is produced instead of exporting it eastward in a new pipeline?

    –Mark

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  90. By Rufus on August 4, 2010 at 9:47 am

    Carbonbridge, I’m a retired insurance salesman. I get neither a nickle, nor a dime from anyone other than commissions on policies. I think the corn ethanol industry has done a good job.

    As a result of corn ethanol, approx. $25 Billion/Yr is Not going overseas, and Gasoline is selling for considerably less than it otherwise would be.

    Now, I see an opportunity for our country to “take the next step” with cellulosic ethanol. If you will notice, my opinions don’t necessarily all mirror Any organizations. I think “Global Warming” is a Crock. I’m agnostic about extending blenders credits. I Am in favor of “producers” credits for cellulosic ethanol. I don’t care much, one way or the other, about the pipeline.

    I’m, big-time, against fighting Wars for Oil, and I think the “peak oilers” are right. I think, between more fuel efficient engines, batteries, and cellulosic ethanol we can become a heck of a lot more “energy independent” than many people realize.

    I believe the very best thing we could do for our economy, right now, is to start building small cellulosic ethanol refineries in every county. The jobs would be a welcome jumpstart, and the end result would be lower cost fuel, and a much-improved balance of payments.

    No, CB; I am neither paid to render my opinion, nor do I charge for it. For whatever its worth, it’s Free.

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  91. By Wendell Mercantile on August 4, 2010 at 10:30 am

    One of the reasons why demand for oil has stayed steady over the years
    is because we have a fuels market that is completely controlled by oil
    companies.

     

    Stephanie~

    I’d say the auto companies have more control over the demand for oil than do the oil companies. Probably something on the order of 99.8% of the cars they build are designed to burn gasoline.

    The demand for petroleum-based motor fuels comes from those who own cars and trucks.  The oil companies only supply the demand — they didn’t create it. The reason oil-based fuels became dominate is because it was by far the cheapest and most efficient source — afterall, Mother Nature left us huge pools of oil to tap into that had accumulated underground over hundreds of millions of years. 

    That will certainly change as those pools of oil run dry or become too expensive to find and drill into, but we haven’t yet reached the point where it is cheaper or more efficient to make fuel from corn than it is to make fuel from ancient, dead organic matter that Mothe Nature turned into oil free of charge.

     

     

     

     

     

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  92. By Rufus on August 4, 2010 at 11:09 am

    Wendell, you can buy E85 all over the Midwest for $1.83.

    If you add in the blenders credit it still only comes out to $2.28/gal.

    I would say that’s considerably cheaper than any oil-based product.

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  93. By Wendell Mercantile on August 4, 2010 at 11:27 am

    I would say that’s considerably cheaper than any oil-based product.

    Not when adjusted for energy content. The current nationwide average for regular gasoline is $2.747 per gallon. The nationwide average for E85 is $2.172 per gallon. AAA Fuel Gauge Report

    Adjusted for energy content, buying E85 is like paying for gasoline at $2.858 per gallon. Consumers still get more bang for their bucks buying regular gasoline.

    I agree that will slowly change as oil becomes more difficult to find, drill into, extract, transport, refine and its EROEI drops. But we haven’t yet reached the point where the EROEI of gasoline is equal to or less than the EROEI of corn ethanol.

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  94. By Walt on August 4, 2010 at 11:33 am

    I’ve read through all the comments and noticed they all do not specifically address the blog story…so I’m going to shift the subject.

    After several years of fighting with EPA and Methanol Institute to look at new technologies to convert methane to methanol here in America, and getting zero support for any new sources of methanol in America (that would disrupt our 80% imports of methanol from Methanex, etal), I found this in my inbox in last couple days.  I’ve now cooled down a bit after venting my spleen again.

    http://www.epa.gov/cmop/docs/c…..uction.pdf

     

    Here is the rub.

    Feed gas:  7-8 mmscfd of coal mine methane

    Feed price of gas:  $5.00/mcf

    Production costs:  $1-1.30/gal @ $5.00/mcf

    Methanol Sales Price:  $1.05/gal

    CAPEX: $200 million

     

    Now, what is the problem with a technology in America that can do basically the same thing and costs $50 million in CAPEX at same scale?

    After several years…does anyone know why I want to start a competing Methanol Lobby in America that is not controlled by the major importer?

    I know it is off topic, but methanol does not have to be exclusive to China even if Ethanol and Methanex/Methanol Institute see it that way.

     

    Frustrating…if people only understand the value of lower capex from technology and innovation.

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  95. By Rufus on August 4, 2010 at 11:47 am

    The new Buick Regal:

    29 mpg (highway) at $2.73, or

    28 mpg (highway) at $2.28

    Your call.

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  96. By Wendell Mercantile on August 4, 2010 at 11:54 am

    Rufus~

    Why keep rehashing this Buick Regal thing? So far there are none on the road, and it will be years until there are enough on the road to make any significant statistical difference.

    I have said several times the Opel Insignia/Buick Regal 2.0 liter TDI engine is great technology; but right now, it has no statistical relevance.

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  97. By Rufus on August 4, 2010 at 12:30 pm

    There is no ethanol pipeline, either; but that’s the subject of the blog post.

    Everyone is discussing how “stations should be built over here,” and “E85 should be sold over there,” but when I point out something positive that starts happening in a couple of months, it’s, suddenly, “off the table” for discussion because we have to wait 7, or 8 weeks.

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  98. By Rufus on August 4, 2010 at 12:53 pm

    And, the reason I brought up the Buick is you made reference to ethanol’s btu content without acknowledging that its higher octane rating, and burn characteristics more than makes up for it in a proper engine.

    You can’t have it both ways.

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  99. By Wendell Mercantile on August 4, 2010 at 1:09 pm

    its higher octane rating, and burn characteristics more than makes up for it in a proper engine.

    True, but the number of “proper engines” on the road that can take advantage of E85′s higher octane is statistically irrelevant ~ and will be for years to come.

    Methanol has a similar octane to ethanol, and would have the same advantage in “proper engines.” We could even produce methanol from our own domestic natural gas and coal at a better EROEI than that of corn or cellulosic ethanol. But you’re not an advocate for methanol, why not?

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  100. By Thomas on August 4, 2010 at 1:12 pm

    It should be noted that everyone who buys this new Regal will not use E85.  More than half would be highly optimistic.  The problem with flex fuel is just that–people buy the cheapest/most convient fuel available.  Consumers that want to buy a new car AND burn less gasoline buy hybrids or electrics.  They definitely don’t go get a Buick anything.  Buick’s demographics are retirees commuting between the grocery store and the golf course who could care less about “our energy future”.

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  101. By paul-n on August 4, 2010 at 1:23 pm

    @Walt -Interesting piece from the EPA – looks like they didn’t consult you before writing it!

    Let’s shift that to another thread and carry on that discussion.

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  102. By carbonbridge on August 4, 2010 at 1:56 pm

    Paul N said:  @Walt -Interesting piece from the EPA – looks like they didn’t consult you before writing it!

    Let’s shift that to another thread and carry on that discussion.


     

    I agree here or let’s have an offline roundtable conference call.  The new EPA flyer on MeOH production from coal mine gas is a hoot.  The numbers do not add up nor will they pencil.  The image that the EPA used as an example of what a small MeOH plant looks like was the smallest and newest commercial methanol plant constructed on the North American continent in the past twenty years.  Too bad they didn’t say that this very small Sand Creek facility situated in north-Denver’s refinery row only operated for 7 years and then went bankrupt and closed in 1999.  It produced about 2,000 barrels per day using $2 Henry Hub methane as feedstocks.  When $2 methane shot up in the late 1990′s, the basic feedstock economics didn’t pencil and the plant closed.  The EPA’s new flyer is talking about $5 methane gas prices siphoned from leaky coal mines.  The same small MeOH facility in Denver was finally bulldozed about five years ago to clear this same space for Rentech to build a brand new 10 bpd Fischer-Tropsch float-on-water synthetic diesel OIL pilot plant.  I could say a whole lot more as I’m quite familiar with some of this – but I won’t — except to repeat what I’ve already stated on this blog and ‘that is to constantly read between the lines’ and therein strive to interpret a wider story.

    -Mark

     

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  103. By paul-n on August 4, 2010 at 2:09 pm

    OK, let’s review a few ethanol related things here;

    • The industry wants the pipeline to support a greater market on the east coast.
    • This market will likely only grow by either raising the blend mandate, or exporting ethanol
    • From a national energy use point of view, it is much better to have the ethanol being used near to where it is produced (midwest)
    • Presently, this is only happening to the extent required by the blend mandate – there is relatively little E85 usage
    • Other than raising the blend mandate, the only real way to grow ethanol use is by E85.
    • Many/most flex fuel drivers (today) do not run on E85 because it is either hard to find and/or there is little financial benefit to doing so.
    • Some new flex fuel vehicles are optimised for E85, and their drivers will get a financial benefit, but they will only be a small portion of the market.

    So, given all of that, how about this for a plan;

    1. Scrap the VEETC (since there is mandate already)
    2. Maintain a producers credit for cellulosic ethanol, until 2015
    3. Double the VEETC credit for E85 sales only, 
    4. Pay this credit to the retailer, not the fuel blender (if it is a different party)
    5. Place an export tax on ethanol equal to all the producer credits (including corn growers credit)
    6. Do not give any gov’t subsidy for the pipeline – let the industry decide if they want to spend that money, or develop the market in their own backyard.  
    7. Relax law allowing drivers (not retailers) to blend any amount of ethanol they like into their fuel.  I.e. mix E85 with regular gasoline in any proportion they want.

    So, with a $0.90 tax credit on E85, drivers will have a real, immediate, and obvious monetary incentive to use it. Retailers, faced with making good margin on E85, will have good incentive to install pumps.  The ethanol industry might even choose to partner with them to help pay for said pumps.  The ethanol producers might even set up their own E85 stations at the distillery gate, just like wineries sell at the cellar door.

    Fueling stations selling E85 and nothing else, supplied directly by the distilleries, will begin to appear, and would be VERY easy and cheap to set up, and would, of course, be within easy trucking range of said distilleries.

    Drivers are legal to use higher mixes, but are not being forced to, and no one is selling higher mixes. The responsibility is purely with the drivers who decide to use higher mixes, or not, so the retailers/oil companies and ethanol industry are not liable for any engine problems (unless, of course, if the ethanol industry claims there won’t be problems).

     

    Now, doubling the credit on E85 to $0.90 is a huge subsidy to the E85 users, but there are not that many of them (presently) so the total amount spent on this subsidy will be far smaller than the $4bn/yr presently.  

     

    This plan leaves the oil refiners out of the ethanol subsidy business, but that is OK as they are mandated to blend x amount of ethanol, this is not destroying their business in any way – it is merely promoting an alternative fuel that they (to date) have refused to promote.

     

    If the retailers and drivers “follow the money”, we would see a rapid increase in E85 usage, and I’ll bet it gets used more in corn country first, which is as it should be.

     

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  104. By savro on August 4, 2010 at 2:40 pm

    @Mark, Paul, Walt,

    Perhaps it’s time we set up an IRC client for members of the boards to hold in-depth conferences on various subjects from time to time.

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  105. By Walt on August 4, 2010 at 2:54 pm

    Paul N said:

    @Walt -Interesting piece from the EPA – looks like they didn’t consult you before writing it!

    Let’s shift that to another thread and carry on that discussion.


     

    Paul,

    Actually, I sit on the World Bank GGFR workgroup panel and am the only technology company invited to participate besides the NOCs and IOCs.  I have had detailed discussions with EPA who also sit on the panel, and they know all about our technology for methane conversion.  Methane emissions and fugative emissions is what they monitor and gather data for reporting to the public, and you might be surprised how much information they have on our company and technology.  Fair enough!  You would not want to know the data I’ve supplied to the Methanol Institute on our technology over the past 3 years, but I have a detailed record of all our discussions.  Let’s say I was disappointed to see that document, but it was just like rubbing salt in a wound for me…as you have no idea how much I’ve contributed to this debate in certain circles.

    Obviously, I’m not saying anything else publicly, as it is now water under the bridge, but one day our “industry experts” will wake up to what methanol can do to help aide the ethanol marketplace, and not compete.  The biggest competition comes (in my view) not from ethanol lobby, but from the former American Methanol Institute which is not the international methanol institute run by a few producers.  If methanol did not have such a bad reputation in America, I would go much more actively vocal, but it is a waste of time and money.

    Congress is not going to underwrite any legislation that does not fit into a nicely designed box…and usually it is a safety deposit box.  We have a small handful of companies that have interest in low cost methanol, but only if we do not impact the control Methanex and a few others have over the USA market.  If I really want to get going…like you see in the EPA marketing piece…go to China where there are dozen of plants producing methanol and they have developed an import/export business.  It is not going to happen here…this is an import only market, and ethanol could be our new export fuel…just going to take more time and more money.  I know this sounds like I’m upset, but if you only knew.

    I’m speaking again this year at the SMI GTL conference and hope to deliver a totally different presentation…which excludes the US market.  I’ll let the boys in Washington play their games with this market.  Like last year when we introduced methanol as an intermediary to other fuels, I will do the same thing except just outside America to avoid (heaven forbid) introducing anything new and innovative in methanol technology in America!

    http://www.smi-online.co.uk/ev…..p;ref=3456

    This is my last post on the subject.  That was the last straw after seeing that EPA piece for China.

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  106. By Rufus on August 4, 2010 at 3:22 pm

    Paul, that looks like a pretty good plan to me. Unfortunately, this administration is not the least bit interested (at present) in anything that will advance ethanol (or “any” biofuel) in any way. Notice, they even let the tax credit for biodiesel, something they were, ostensibly, very much in favor of, expire.

    However, such a plan, lobbied in 2012, Might have a chance of getting somewhere. We can only hope. :)

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  107. By paul-n on August 4, 2010 at 3:34 pm

    Rufus, 

     

    Glad you like that plan, I wonder what Growth Energy or Poet would think?

    Keep in mind the main reason they scrapped the biodiesel credit was because most of it was getting exported. They should have closed that loophole with an export tax.  Bigger problem with biodiesel is that it is not really cost competitive, except for using waste oils, and there are no potential fuel economy advantages, like you can get with higher octane alcohol.

    Anyway, I think my plan is a better way to go than forcing higher blends down people’s throats – I just can’t see the administration taking on such political risk for the benefit of the ethanol industry.

    BUt apply that double credit to E85, and then people will start to look for ways to use it.  Right now, most flex fuel drivers just can’t be bothered.

    Of course, I forgot to mention that any such credit for E85 should also apply to M85 or A85 (mixed alcohol), should anyone want to start making and selling that.  With a 90c credit, someone will find a way.

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  108. By paul-n on August 4, 2010 at 3:38 pm

    Mark/Walt

     

    One thing is clear to me when it comes to methanol – if you are relying on any real policy reform from the government you will die waiting!  They have used all their political capital on ethanol, and that is now running out.  The only way methanol will make it as a fuel is if it is demand pulled, not government pushed.  

    Of course, how to make that demand happen is a whole different question…

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  109. By rrapier on August 4, 2010 at 7:25 pm

    So, given all of that, how about this for a plan;

    There is enough good information here to warrant a standalone post. I am going to make this the subject of my next Forbes piece, then will also soon put up a followup here based on a lot of these comments.

    RR

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  110. By Walt on August 4, 2010 at 7:35 pm

    As I mentioned I am not going to touch the EPA issue again, I had a distributor send this to me today…so let’s see what these planned shut-downs due to the price of methanol next quarter in America.  I have the price history on methanol during the last shut downs by Methanex, and prices went from about $400 to $800/ton and a lot of producers made money from their storage (I wonder who?…that is a no brainer).  It brought chemical processors to their knees in America and sent many out of business who could not pay the bills…not to mention the hit biodiesel companies took.  Let’s see what happens in 4th quarter…maybe with low demand everything will be stable with these planned shut-downs…or China will now start exporting their Methanol to America…since we are forbidden to produce here for some silly reason.

    Methanol:
    The
    Methanex Non-Discounted Reference Price for August will remain at
    US$1.05/ gallon. Spot barge offers are currently in the $.90- $.92/
    gallon range and stable. / 

    Notes:

      Unplanned outages and improved demand have been responsible for keeping global methanol prices stable. 

    Numerous planned, extended outages are expected for Q4 of this year. 

    The new Metor 2 plant in Venezuela is producing commercial quantities of on-spec methanol. 

    Demand
    in China continues to grow as does its own production. Imports are
    behind last year but will improve if global methanol values decline. 

    European demand is good while North America demand is seen as flat. 

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